Acacia Mining CEO and CFO resign following tax dispute (Tanzania)

Acacia Mining chief executive officer Brad Gordon has resigned barely two weeks after its parent company Barrick Gold Plc struck an initial $300 million tax settlement deal with the Tanzanian government without involving him.

The firm’s chief financial officer Andrew Wray also resigned in moves that point to differences in the boardroom on how to resolve the dispute in Tanzania. Acacia said the two would leave at the end of the year.

“Mr Gordon will be returning to Australia for family reasons, while Mr Wray is pursuing an opportunity elsewhere,” the firm said in a statement.

Mr Gordon will be replaced by Peter Geleta, the head of organisational effectiveness, as the acting CEO, while Jaco Maritz, the finance general manager, replaces Mr Wray.

“Both appointments will be effective from 1 January 2018,” the firm said.

Acacia’s chairman Kelvin Dushnisky said the exiting executives were instrumental in the operational and financial turnaround of Acacia over the past four years.

Barrick, which holds a 63.9 per cent stake in Acacia, last month agreed with Tanzania that Acacia would cede 16 per cent stake to the government, pay $300 million in tax arrears, split economic benefits from the business halfway as well as infrastructure development.

But Mr Wray said in a call with analysts that Acacia had no capacity to pay the $300 million as President John Magufuli had agreed with Barrick executives.

Last week, Barrick Gold said it was counting on Tanzania’s government lifting the gold export ban to help Acacia raise the money from cash flows over a period of time.

“Payment would be conditional on Acacia’s ability to sell concentrate. Barrick will also be working with the Government of Tanzania to establish the basis upon which the concentrate export ban can be lifted as expediently as possible, including protocols for joint oversight and verification of concentrate shipments,” the firm said in a statement.

Tanzania placed the mineral concentrates export ban in March and in July slapped Acacia with a $190 billion tax bill accusing it of understating.

The Tanzania’s largest miner reported that gold production for the third quarter fell to 191,203 ounces, down 8.3 per cent quarter-on-quarter.

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