Tanzanian gold mining company Acacia Mining Plc recorded a 13.3
per cent drop in gold production in the first quarter of this year in
the wake of an unresolved tax dispute with the government.
“We
achieved gold production of 104,899 ounces for the first quarter of the
year," said Peter Geleta, Acacia’s interim chief executive officer.
"While
historically our production is typically stronger in the second half of
the year, production this quarter was impacted by unanticipated
production issues at our North Mara mine,” added Mr Geleta.
Acacia blamed the drop on the performance of the North Mara and Buzwagi mines.
In the same quarter last year, North Mara’s production stood at 76,769 ounces.
This year, it produced 66,324 ounces during the same period, a 13.6 per cent drop.
According to the firm, the fall in gold production was mainly
driven by the fall of the Gokona underground mine in December 2018 and
an excavator breakdown in the Nyabirama open pit mine.
Buzwagi’s
production was 28,577 ounces, 20 per cent lower than the 35,685 ounces
produced in the same period last year, blamed on the lower grade
stockpile processing at the mine.
Bulyanhulu produced 9,999 ounces for the quarter, 17.3 per cent above 2018’s 8,527 ounces and in line with expectations.
This was attributed to the higher grades recovered from the treatment of tailings, and improvements in the plant’s throughput.
Acacia
said it now targets between 500,000 and 550,000 ounces against 2018’s
target of between 435,000 and 475,000 ounces at an all-in sustaining
cost (AISC) of $935-$985 per ounce.
“We have taken
immediate steps to address these, introducing a revised mining plan in
mid-March for both the underground and open pit mines, and we remain
confident of delivering against our full-year production guidance,” said
Mr Geleta
In February, Tanzanian authorities and
Canadian miner Barrick Gold announced that they had worked out a plan to
settle the dispute with Acacia Mining Plc.
Prof
Palamagamba Kabudi, The Legal Affairs Minister, promised progress before
end of March, but the London-listed mining firm is yet to receive the
proposal.
“Acacia is looking forward to receiving a
detailed proposal for a comprehensive resolution of Acacia’s disputes
with the Government, once Barrick’s negotiations have been successfully
concluded,” said Acacia in a statement.
Dispute
Acacia
has been engaged in a long-standing dispute with Tanzania over tax
evasion, breach of environmental regulations and other issues for two
years now.
Although locked out of the talks between the
government and Barrick, Acacia now says it is banking on Barrick Gold
to secure its interest in its operations and its existence in the
country.
“We continue to provide support to Barrick in
its discussions with the government of Tanzania and believe that a
negotiated resolution is in the best interests of all stakeholders,”
said Mr Geleta.
Under the agreed October 2017
framework, which has yet to be implemented, Barrick executive chairman
John Thornton and Tanzania’s President John Magufuli agreed that Acacia
Mining would give the government $300 million as an act of good faith, a
16 per cent stake and a 50/50 split of revenue from its mines.
Acacia
did not announce dividend for its shareholders last year, citing a
two-year export ban on gold and copper concentrates and criminal charges
against former and current employees.
“As a result of
the challenging operating environment, and delays in reaching a
negotiated solution with the government of Tanzania with the current
liquidity requirements, the board of directors has not made a final
recommended dividend yet for the year 2018,” said Mr Geleta.
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