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This handout photo from Africa Barrick Gold shows the Tulawaka mine in northwest Tanzania.Brookes

Barrick Gold Corp. has struck a tentative deal with the government of Tanzania, which should resolve a messy dispute that had halted a key source of its gold production through its London-based subsidiary, Acacia Mining PLC.

But the provisional agreement comes with hefty concessions, including handing over a minority equity stake in Acacia's Tanzanian operations to Tanzania, and giving the East African government significant sway over decision making and future investments.

In March, in a move tied to economic nationalism, Tanzania suddenly halted the export of gold concentrate that directly impacted the operations of Acacia. At the time, Tanzania said it wanted more of its gold to be processed domestically. Acacia was also accused of massive tax fraud, and in July Tanzania slapped the company with a gargantuan $190-billion (U.S.) tax bill.

In two separate press releases on Thursday, Barrick outlined plans to grant Tanzania a 16-per-cent stake in Acacia's three Tanzanian mines, and split "economic benefits" from those assets, including royalties, 50/50 with the country.

The proposal is subject to the approval of Acacia's board and its shareholders.

Meantime, the Toronto-based international mining company said it has set up a working group with Tanzania to try to resolve the tax spat.

Acacia intends to pay the East African country $300-million as a "gesture of good faith" as part of that process, Barrick said.

Barrick currently owns 63.9 per cent of Acacia, and the company's Tanzanian mines account for about 10 per cent of Barrick's global gold production.

Under the proposal, a new Tanzanian operating company would be created to manage Acacia's operations in the country.

"The government of Tanzania will participate in decisions related to operations, investment, planning, procurement, and marketing," the release said.

"Progress towards a resolution should lift an overhang on the shares," wrote Stephen Walker, analyst with RBC Dominion Securities in a note to clients on Thursday, calling the news " a slight positive" for Barrick's stock price.

While shares in Acacia surged on the London Stock Exchange on Thursday, closing up 16 per cent, Barrick's stock was virtually flat, closing down 0.25 per cent on the Toronto Stock Exchange.

In a note to clients, on Wednesday, before full details of the proposal were made available, Scotia Capital Inc. analyst Tanya Jakusconek wrote that at first blush this doesn't appear to be a particularly favourable outcome for Barrick. She estimates that prior to the export ban, Barrick's stake in Acacia was worth about $1.1-billion but the value of the payments to be made to Tanzania, including the equity stake, is about half that, or $500-million.

"It appears that [Barrick] is paying a significant cost, without receiving any kind of formal concessions from the government in return," she wrote.

Also muddying matters is ongoing uncertainty over when Tanzania's might lift the export ban on concentrates. Earlier this year, Acacia said the ban was costing it more than $1-million in daily revenue.

In the release, Barrick said it was "reviewing conditions" for the lifting of the ban with Tanzania but gave no details on when that might take effect.

Andrew Kaip, analyst with BMO Nesbitt Burns Inc. also wrote in a note to clients, that there is still some uncertainty over the tax dispute, which continues for the time being at least.