The Globe and Mail reports in its Thursday edition that Barrick Gold has reached a new agreement with Tanzania that may finally end a punishing multiyear gold-export ban at its subsidiary Acacia Mining PLC that has weighed heavily on the share prices of both companies.
The Globe's Niall McGee writes that the development comes six weeks after skilled African miner Mark Bristow took over as the new chief executive officer of Barrick.
The latest proposal would see Acacia split "economic benefits," including taxes and royalties from its Tanzanian mines, 50:50 with the East African country. Acacia would also pay Tanzania $300-million (U.S.) to resolve a long-running tax dispute. While the agreement is similar to one announced in late 2017, the tax penalty can be paid over time, instead upfront.
In a statement on Wednesday, Acacia said that an independent committee of its board must review any proposal. A shareholder vote at Acacia must also take place before the agreement could take effect and the Tanzanian government would have to give its stamp of approval.
"If it allows operations to return to normal it could be a net positive for Acacia," RBC Dominion Securities analyst James Bell wrote in a note to clients.
© 2019 Canjex Publishing Ltd. All rights reserved.