Acacia Mining parent agrees deal with Tanzania government

Acacia Mining parent Barrick Gold has agreed for the Tanzanian government to take a 16% stake in the London-listed company's three mines in the country and to share revenues, which looks like resolving a months-long dispute.

Barrick, which owns 63.9% of Acacia, has agreed for the company to pay Tanzania a one-off $300m as a show of good faith.

Palamagamba Kabudi, Tanzania's minister for justice and constitutional affairs, said: "We have also agreed to have a 50:50 share of revenues between the government and Acacia Mining from all the mines."

Canadian-listed Barrick began talks with President John Magufuli's government in the summer after Acacia was accused of under-declaring its gold shipments and "mining illegally", leading to an export ban being placed on its gold/copper concentrate exports in March, followed by new laws to take a greater royalties and up to 50% share in the mines and then an astonishing $190bn tax bill for alleged unpaid tax.

Speaking at a press conference in capital Dar Es Salaam on Thursday, Barrick chairman John Thornton said the deal would have to be approved by Acacia's independent shareholders and directors.

Acacia had referred the dispute to international arbitration, but had always stated its hope that “a negotiated resolution is the preferable outcome”.

A trading statement from Acacia was expected on Friday, though the company revealed last week that it produced 191,203 ounces of gold and sold 132,787 ounces of gold during the third quarter.

In the first half of the year gold production was 428,203 ounces, up 4% year on year, with the second quarter contributing 208,533 ounces, down 6% on the same period last year.

In its own statement later on Thursday, Acacia said it had "just received a copy of the framework agreement" and was "seeking further clarification".

"No formal proposal has been put to Acacia for consideration at this point in time. As stated at the press conference, any proposal agreed in principle between Barrick and the [government of Tanzania] will require Acacia’s approval."