TANZANIA – The African subsidiary of Barrick Gold, Acacia Mining, is reducing its operations and workforce at the Bulyanhulu gold mine as the country’s government continues its ban on export of copper-gold concentrate. The decision will cut 1,200 employee and 800 contractor jobs at the mine.
Acacia is cutting 1,200 employees at Bulyanhulu. (Credit: Acacia Mining)
The Tanzanian government claims that Acacia owes it US$195 billion in unpaid taxes, alleging that the company grossly underestimated the amount of metals in the concentrates it sold. Acacia says the export ban has resulted in a US$15 million negative cash flow monthly.
The company has reduced its 2017 guidance by 100,000 oz. to approximately 750,000 oz. of gold due to reduced operations at Bulyanhulu.
Bulyanhulu is one of three mines that Acacia operates in Tanzania. The Buzwagi gold mine is also affected by the export ban, but operations there will continue unchanged because it has a relatively short mine life and produces a much smaller percentage of the company’s output than does Bulyanhulu. At the North Mara mine, production will also be reduced due to underground development delays.
“Once the changes at Bulyanhulu are completed, Acacia believes the group will be able to return to positive cash generation in early 2018,” the company said in a release. It continues to evaluate “further steps to reduce cash outflows and protect its balance sheet, with the cash balance at the end of August 2017 amounting to US$107 million, with US$71 million of debt. These steps may include a reduction in corporate overheads, expansionary drilling at North Mara, greenfield exploration activity and a gold hedging program.”
More about Acacia’s dispute with the Tanzanian government can be found at www.AcaciaMining.com.