Acacia Mining opens talks for stake sale in Tanzanian operations

20 February 2018 (Last Updated February 20th, 2018 12:33)

Acacia Mining is contemplating the sale of a stake in some or all of its Tanzanian operations after receiving expressions of potential interest from Chinese firms.

Acacia Mining is contemplating the sale of a stake in some or all of its Tanzanian operations after receiving expressions of potential interest from Chinese firms.

The company is currently engaged in negotiations with potential investors.

However, the company noted that the process might not lead to a concrete agreement.

Last week, Acacia posted a net loss of $707m for last year in the wake of reduced production in Tanzania warranted by an ongoing tax dispute with the country’s government.

Last year, the government prohibited exports of metal concentrate, forcing the company to scale-down production at its Bulyanhulu mine.

"The company’s production for the last year fell by 7% to 767,883oz when compared with 2016."

Acacia’s majority shareholder Barrick Gold has been engaged in negotiations with the government of Tanzania to resolve the issue.

In a statement, Acacia said: “Acacia remains committed to shareholder value and evaluates all opportunities against strict strategic and financial criteria and any transaction will be pursued only if it is determined by Acacia’s Board to be in the best interests of all shareholders.”

The company’s production for the last year fell by 7% to 767,883oz when compared with 2016.

In July last year, the government slapped a tax demand notice of $190bn after accusing the company of illegal mining operations in the country.

For this year, the company expects reduced production to 435,000oz-475,000oz as Buzwagi transitions to processing stockpiles and Bulyanhulu solely re-processes tailings.