ACACIA Mining was granted a temporary respite following the resumption of gold exports from the company’s North Mara mine in Tanzania, but the government has forced it to stop processing recently mined gold ore.
The UK-listed firm, in which 63.9% shareholder Barrick Gold is buying for £347m shares in the firm it doesn’t yet own, said an export ban had been lifted by the Government of Tanzanian (GoT), but a directive to cease use of a tailings storage facility means processing of gold after it has been mined from underground has to stop.
The order on the tailings facility followed a ‘prohibition notice’ issued by the Tanzanian National Environment Management Council which alleges waste ore is leaching contaminants into nearby water sources.
The matter recently entered the mainstream following a report in the UK’s Guardian claimed end-users of gold such as Canon and Apple were checking to see if they had sourced metal from the mining company’s North Mara mine.
The upshot is that Acacia will be able to generate revenue by supplying market with finished gold from stockpiles – which crucially it said would enable it to meet its financial obligations for “an extended period of time” – but it will not be able to process newly mined gold ore until the tailings ban is lifted.
The imposition of the tailings ban should be seen in the context of a now protracted dispute with the GoT which started following allegations Acacia had underpaid tax for about 20 years. The GoT said it was owed $190bn in unpaid tax, interest and penalties. Acacia has disputed the findings, which have not been made public, but the die appears to be cast.
In the end, the GoT refused to negotiate with Acacia preferring to liaise through Barrick. Barrick proposed a settlement payment for unpaid tax of $300m, to be paid by Acacia, and a new ownership dispensation which necessitates the takeover of Acacia. That means the new ownership pattern will be between the GoT and Barrick.
Barrick CEO, Mark Bristow, has yet to see his takeover offer accepted by minorities which kicked up a fuss with an initial bid they said was too low. The new offer, which takes into account savings that come about from Acacia’s takeover and the value of its exploration properties, is likely to pass muster.
In the meantime, Barrick was pressing ahead with plans for the takeover. Bristow told Miningmx last week that regular meetings between Barrick and Acacia were underway ahead of the takeover. There was “a great deal of work to be done,” he said.