Barrick Gold Corporation (NYSE:ABX)(TSX:ABX), the main shareholder (63.9%) of Acacia Mining (LSE:ACA) (DSE:ACA) – Tanzania’s largest gold mining company – has just published an update on ongoing discussions with the Government of Tanzania (GoT) concerning the proposed framework for Acacia Mining’s operations in Tanzania.
In its statement, the corporation indicates that progress has been made on the drafting of definitive agreements necessary for the implementation of the proposed framework.
However, in order to allow the process to continue in an orderly manner and without an arbitrary deadline, Barrick is not providing a timetable for the completion of the discussions at this time.
Meanwhile, Acacia noted in its own update related to this matter that it has been supporting Barrick in its discussions with GoT, but has not been directly involved in those discussions to date and stressed that any proposal that might be agreed in principle between Barrick and GoT will be subject to review by the Independent Committee of the Acacia Board of Directors.
Acacia is currently on a raw with the Tanzanian government after a presidential committee found in May 2017 that the company allegedly under-declared its exports and eventually presented it with a demand for USD 190 billion in unpaid taxes.
The gold producer has always refuted the accusation and has been since in talks with GoT for a resolution.
In October 2017, Barrick Gold announced has reached an agreement with GoT in relation to the ongoing tax dispute.
According to the deal, Acacia will make a payment of USD 300 million to GoT and the Government’s share of economic benefits would be delivered in the form of royalties, taxes, and a 16% free carry interest in the Tanzanian operations.
However, to date, the proposed deal has not been approved by Acacia.
Meanwhile, the company declared a reduction of gold production for Q1 2018 of -55% compared to Q1 2017 and commenced a process to explore the value to the company of the sale of a stake in some or all of its Tanzanian operations.