Barrick Gold aims to seal a deal with Tanzania over Acacia in the first half of 2018

Courtney Goldsmith
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(FILES) Gold bullion is displayed at Shi
Acacia Mining has been locked in a row with the government of Tanzania since March (Source: Getty)

Shares in Acacia Mining jumped this morning after its parent company confirmed it expected to finalise a deal with the Tanzanian government to lift a gold export ban in the first half of 2018.

Acacia's share price rose 7.37 per cent to 198.2p in afternoon trading.

Barrick Gold, which owns 63.9 per cent of Acacia, made the announcement in its third quarter results.

It also reported weaker than expected third-quarter earnings, in part due to Acacia, which last week said it had taken a $90m revenue hit in the third quarter due to the ongoing ban on gold and copper concentrate exports.

Acacia has been locked in a row with the government over the export ban as well as allegations it understated gold shipments, which Acacia denies.

Barrick said:

Barrick and the government of Tanzania will now work to complete detailed documentation and final agreements for review and approval by Acacia. We expect this work to be completed in the first half of 2018. Barrick has engaged with independent directors of Acacia during this process, and will continue to do so.

Acacia has been left out of the discussions, which Investec analysts noted was an "odd situation".

"It’s a bit like parents in consultation with the headmaster over a wayward child. The parents are directly responsible for the position the child is in and the headmaster has an agenda only he can know, but it is the child that is in detention and facing the cane," Investec said.

Barrick's earnings were also hit by a $172m tax provision for outstanding claims against Acacia.

Acacia also noted the tax provision today, and said it did not intent to make any changes to its own provision of $128m.

"Once Acacia has received and had the opportunity to assess a detailed proposal, Acacia will also be able to assess the potential impact on Acacia’s historical uncertain tax positions," the company said.

Read more: Shares in Acacia Mining surge after Barrick Gold and Tanzania strike a deal

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