Acacia Mining is set to bounce back after being on the back foot for the better part of the year coming under scrutiny by the Tanzania Government after scandalous activities seem to drift it into another direction. The company has underperformed struggling to abide by the laws when it was pushed against the wall.
The company is yet to open another chapter after it decided to reduce its mining activities in Tanzania. Buzwagi mine has been the only surviving location that is anticipated to generate cash after upbeat results from a trial to increase the proportion of sellable gold bars.
It was a survival by a whisker as the gold bars are not affected by the export ban that was imposed by the government of Tanzania in March. This is Acacia’s beacon of hope as it gets back to its feet financially.
Following the positive results after the trial at Buzwagi, Acacia decided to keep the mine but producing just the gold bars. As it was not affected by the export ban, it was necessary to keep the mine alive with prospects that it will hold up the company’s financial docket.
Of Buzwagi’s total production this year, around two-thirds has been made up of concentrate but since the ban was introduced in early March, Acacia has only been able to sell around 35 percent of the operation’s output, while incurring 100 percent of the cost.
Acacia has only sold 35 per cent of its operation’s output due to the saga, incurring 100 percent of the cost. Before the ban was introduced in March, two-thirds of Buzwagi’s total production in 2017 has been made up of concentrate.
“There are no changes to group production or cost guidance resulting from this processing change, however it will result in Buzwagi being able to sell an additional 8,000-10,000 ounces per month for the remainder of the year,” Acacia said in the statement.
President John Magufuli imposed gold concentrate ban on March 2017, and has cost Acacia a fortune. The company has been under pressure trying to resolve issues with the government that has used close to a third of the miner’s output.
The mining company was accused of carrying out illegal operations and evading taxes four months later with the understanding of the amount of metal concentrate in exports from the gold and copper mines in the country.
The conflict pushed Barrick to intervene as Acacia called for arbitration on behalf of its Bulyanhulu and Buzwagi mines. The world’s largest gold producer, which has a 64% stake in Acacia, is currently in talks with authorities in hopes of reaching a settlement over the claims against its subsidiary and the country’s current ban on mineral concentrate exports.