Barrick in talks to sell stake in Tanzania’s Acacia Mines — report

acacia mining tanzania gold

The publicly traded African firm is Tanzania’s biggest mining company and operates three major gold mines there.

Canada’s Barrick Gold (TSX, NYSE:ABX), the world’s No.1 miner of the precious metal, may soon sell its majority stake in its African subsidiary Acacia Mining (LON:ACA) and it has already begun preliminary talks with several South African companies.

The potential sale of the publicly traded African operation, according to sources familiar with the matter quoted by Reuters, is part of the company’s plan to become debt-free within a decade.

Barrick’s London-based subsidiary, formerly known as African Barrick Gold (ABG), is Tanzania’s biggest mining company and operates three major gold mines there — Bulyanhulu, Buzwagi and North Mara.

In an interview with Bloomberg TV earlier this month, President Kelvin Dushnisky said Barrick could, at some point, divest more non-core assets to reduce debt, including its 64% interest in Acacia Mining, its 50% stake in its Chilean copper mine, Zaldivar, and its Zambian Lumwana copper mine.

The publicly traded African firm is Tanzania’s biggest mining company and operates three major gold mines there.
The publicly traded African firm is Tanzania’s biggest mining company and operates three major gold mines there.

It’s estimated that Barrick could get around $1.9 billion for Acacia, which also has exploration projects in Tanzania and other African countries.

The potential buyers named by Reuters sources are Harmony Gold Mining Co Ltd, Sibanye Gold Ltd, AngloGold Ashanti Ltd, Randgold & Exploration Co and Gold Fields Ltd, all of them based in South Africa. It is said that some unnamed Australian and North American miners could also be interested in the African company.

Barrick has set a target of paying down $2 billion in debt this year after exceeding its $3 billion debt-reduction goal in 2015.

Earlier this year, Acacia was caught in a tax evasion scandal with a Tanzanian tribunal ruling the company had dodged more than $40 million in corporate taxes from 2010 to 2013.

The tribunal, headed by a High Court judge, ordered Acacia Mining to pay $41.25-million in taxes to the Tanzanian government. The company said at the time it was victim of a flawed taxing system, IPP Media reported. It said that it had invested about $3 billion in Tanzania and that the government had agreed that such amount could be deducted from its corporate taxes.

Source: Mining.com