| LONDON/BENGALURU, June 2
LONDON/BENGALURU, June 2 Acacia Mining
said on Friday it would cost about $30 million to put its
Bulyanhulu mine in Tanzania under care and maintenance as an
export ban on the miner's metals weighed.
Shares in the unit of Barrick Gold rose 4.7 percent
after the company stuck to its full-year production guidance
despite the ban.
Acacia is losing $15 million per month after Tanzania banned
the export of all unprocessed ore in March, forcing the company
to make contingency plans in case a resolution is not found.
Chief Executive Brad Gordon told a conference call on Friday
it would cost $30 million to shut Bulyanhulu mine for layoffs
and breaking contracts and between $2-$3 million per month in
care and maintenance charges.
Tanzanian President John Magufuli fired his mining minister
and the chief of the state-run mineral audit agency last week
after an investigation into possible undeclared exports by
mining companies, including Acacia, to evade tax.
A second audit of Acacia is now under way after the first
audit committee last week said it found Acacia had 10 times more
gold in its containers than the company had declared, as well as
undeclared minerals such as iron and sulphur.
Acacia has denied any wrongdoing and said it still has not
seen the report.
"If we get to a point following the release of the second
report where we see an impasse in dialogue with the government
then we would put Bulyanhulu on care and maintenance," Gordon
said, adding that the burn on cash could also be a trigger.
The ban mainly affects the Bulyanhulu mine which is a
larger, newer mine that has higher running costs. Buzwagi mine
is nearing the end of its life.
It said production for the year would still fall between
Acacia, which is also listed in Tanzania, said its cash at
the end of May was $165 million.
Gordon said he was accompanied this week by Acacia Chairman
and Barrick President Kelvin Dushnisky on a trip to Tanzania in
an effort to resolve the ban.
(Editing by Adrian Croft)