Acacia CEO quits two weeks after Barrick compact with Tanzania

Brad Gordon, CEO, Acacia Mining

ACACIA Mining, the Tanzanian gold miner in which Barrick Gold has a 64.9% stake, has been dealt a serious blow after two of its most senior executive directors – its CEO, Brad Gordon, and Andrew Wray, CFO – announced their resignations.

The UK-listed company said today Gordon was returning to Australia “for family reasons” while Wray was “pursuing an opportunity elsewhere”. The executive departures is less than a fortnight after Barrick agreed a framework agreement with the Tanzanian government which included a $300m payment by Acacia in order to resolve a tax dispute.

The tax dispute involves the value of gold concentrate exports from Acacia’s Bulyanhulu and Buzwagi mines which the Tanzanian government said had been under-estimated for about 17 years. Barrick also agreed to part with a 16% stake in Acacia Mining in order to comply with new legislation passed by President John Magafuli’s government in June which positions the state to take up equity positions in firms operating within its borders.

Final acceptance of the Framework Agreement lies with Acacia Mining minority shareholders who cannot be heartened by the timing of the resignations of Gordon and Way. The two executives will remain with the company until the calendar year-end whereafter they will be replaced by Peter Geleta who will be interim CEO and Jaco Maritz, currently Acacia’s GM who will be appointed CFO. Geleta is currently Acacia’s head of organisational effectiveness.

Kelvin Dushnisky, chairman of Acacia Mining, sought to put a optimistic spin on events whilst acknowledging the work that Wray and Gordon had done. The role of Gordon, who was appointed Acacia CEO when it was still African Barrick, in August 2013, cannot be under-estimated. Apart from the company’s rebranding, he led it to production last year of 829,705 ounces at an all-in sustaining cost (AISC) of $958/oz. This compares to the 641,931 oz produced at AISC of $1,362/oz when he joined in 2013.

In April, the Tanzanian government said it would block exports of concentrates after presidential reviews said the country was owed ‘tens of billions of dollars’ in unpaid tax, penalties and interest. It has also declined to return VAT owed to Acacia – a development that put the skids under the firm’s share price which fell two-thirds. Shares in the company were nearly 6% down in London trade today.

The blockade on exports resulted in Acacia putting its flagship Bulyanhulu mine on care and maintenance in an effort to stem cash losses. At the end of 2016, Gordon spoke of improving the dividend to shareholders amid a $114m increase in net cash to $218m. As of this year’s third quarter end, Acacia had net cash of only $24m which was forecast by Investec Securities to deteriorate to $8m by the year-end, before improving again.

“The board will continue to provide the management team with our full support as the Company focuses on delivering against our operational targets, which remain unchanged from the third quarter results, while seeking a resolution to the situation in Tanzania,” said Dushnisky in a statement.

Geleta was previously at AngloGold Ashanti and Barrick Gold and joined Acacia in 2012. Maritz was initially employed by Placer Dome before it was bought by Barrick.


  1. Dear Fellow Readers,

    Barrick has a very nice/progressive, BUT DANGEROUS, attitude of not offending its Landlords wherever it operates. I will site the following examples :

    1. When Dominican Republic government demanded better terms for Puelo Viejo after sending $3,7Bn on it with Goldcorp, they caved-in on the tax demands of the government despite the exploitation agreement indicating otherwise.
    2. With Pascua Lama, when the issues of environmental incidents and other abuses of courts were being used to coerce it which resulted in a major CapEx blowout of that project. They surrendered there again, and delayed the project greatly.
    3. At Veladero, the same tactics were used to derail that operation, and Barrick just kept quiet about the impact , only to bring in a chinese partner at rockbottom price.
    4. Lumwana, when the tax code changes were being effected in Zambia , poor First Quantum were left to defend the fort with Barrick AWOL in the discussions.
    5. Now Acacia, with its hard to fathom tax bill. So when the Barrick COO ( during analyst Q&A at Q3 FY17 results) , after taking a tune from his Goldman Sachs Chairman (Thornton), made a commitment to pay $300M to Government of Tanzania from Acacia coffers despite him NOT being a member of Board or management , one could sense that the management of Acacia were being cast aside by the Yankees. That is poor corporate governance and abuse of minority shareholders by Barrick.

    Beware of investing in companies were the major shareholder can do as they please. I hope shareholders of Kumba ,AngloPlats , Firestone , Sedibelo Platinum, Royal Bafokeng Plat , ASSMANG, Pallinghurst etc, are watching and looking into the Governance memorandums of these companies and will soon demand amendments to ensure that their rights are protected.

  2. Obtaining the trust of the host country for mining is absolutely the first priority for any management team and this lot failed. Just look at in contrast. Share prices don’t lie, this lot failed miserably.

    • Dear Make that boat go faster,

      There is no substitute for obtaining “social license to Operate”. That is why the CoM in South Africa is going to pay an extreme price for its continued anti-transformation stance. Social License to Operate is critical for sustainable operations ,which includes paying fair taxes to host country. Just by way of audited numbers over period FY12- FY17 (YTD) :
      Net OCF = $1371M
      CapEx = $1524M
      Divi = $176M
      EBITDA = $1482M
      Tax = $186M , thus effective tax rate = 13%…..

      Wealth begets Envy…. GoT has reason to feel aggrieved. But the Acacia management were arrogant in addressing the issues raised, and that was the chief mistake. So the GoT banned exports, and their economy, and treasury, never felt the pain because the benefits were absent all along, hence Acacia suffered whilst Tanzanian economy shrugged-off the fall-out.

      The share price responded only after the ban on exports.

      Bell Pottinger has been their media consultants all along….

  3. Again, minorities are just that, minorities. And they must live with that natural limitation. So grow up, guys…you don’t have the money and you don’t have the votes. For very good reasons, I’m sure… 🙂

    • Yes, yes, you are right… Minorities should shut up and get out of Africa… Africa is reserved for dictators and thieves, there is no place for sissies like us…

  4. Unfortunately minorities do not know the facts that came up during the negotiations. The Tanzanian Government has a lot of facts and information on these operations that made it very difficult for the Barrick Gold negotiations team to counter. if it weren’t so I’m sure the TZ government would have long been dragged to the international courts. Read between the lines. Barrick would not just bow down.

    The new management should embrace the deal reached and move on to avoid further losses, at this point the Government has an upper hand.

  5. I gave up on miners and am stacking physical or buying ETFs like GLD and SGLD instead of paying miner management to screw up again and again. To he11 with the Tanzanian govt. and their molestation of Acacia. Don’t blame Barrick for making being handed of a sh1tpie by the low IQ Tanzanians.

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