Acacia Mining is contemplating the sale of a stake in its Tanzanian operations after receiving expressions of potential interest from Chinese firms, according to a press statement released yesterday.
The company is involved in negotiations with potential investors. The process is an early stage and there is no certainty that an agreement will be reached soon.
As reported by Nasdaq, the transaction under discussion is similar to deals Barrick has struck in recent years with Shandong and Zijin, where Chinese groups have become partners in mines owned by the Canadian gold miner.
Last year, Tanzania government banned the exportation of metal concentrate, forcing the company to scale-down production at its Bulyanhulu mine.
The company also stated that it continued to support the ongoing negotiations between the Government of Tanzania and Barrick Gold Corporation, Acacia’s majority shareholder, in seeking to identify a detailed proposal to present to Acacia for review.
Last year, the government of Tanzania accused Acacia, the country’s biggest gold miner, of under-declaring mineral exports and slapped it with a massive $190 billion tax bill. Acacia denies the charges. In addition, the government banned miners from exporting minerals that are not processed in the country as it aims for a bigger slice of the revenues from its natural resources.
As a result of the ban, Acacia’s gold sales fell nearly 30 percent last year, pushing it to a financial loss. Its chief executive and head of finance quit in November last year.
With relations strained between Acacia and Tanzania, Barrick, which owns 63.9 percent of Acacia, has taken the lead in negotiations with the government. It reached a framework agreement with Tanzania in October and is optimistic of finalising a deal in the first half of 2018.
Financials released last week indicate that Acacia posted a net loss of $707m for last year, in the wake of reduced production in the country.