Barrick Gold stock down despite deal to settle long-running Tanzania dispute

Barrick Gold Corp. announced a deal with the government of Tanzania that will see the gold miner pay US$300 million to settle all outstanding tax and other disputes over its mines in the African country.

The company and Tanzania are also to share the future economic benefits from the mines on an equal basis and create a dispute resolution framework.

On the Toronto Stock Exchange on Monday, Barrick fell as low as $21.95, down 63 cents or 2.8 per cent from a close of $22.58 on Friday.

The slide came despite the deal announced on Sunday matching the company’s key expectations as revealed in an announcement in July, analysts pointed out.

“The announcement … by Barrick is not too dissimilar to the prior release and provides incremental details on the path forward,” said Andrew Kaip of BMO Capital Markets in a report.

“Though we see the transaction as slightly dilutive to Barrick, it brings with it clarity and the potential to add value over time. We expect Barrick will undertake a number of reviews and studies to maximize asset value.”

Under the agreement, a new operating company called Twiga Minerals Corp. has been formed to manage the Bulyanhulu, North Mara and Buzwagi mines in Tanzania. Twiga is the Swahili word for giraffe, Tanzania’s national symbol.

The government is to acquire a 16 per cent stake in each of the mines and will receive its half of the economic benefits from taxes, royalties, clearing fees and participation in all cash distributions made by the mines and Twiga.

“Rebuilding these operations after three years of value destruction will require a lot of work, but the progress we’ve already made will be greatly accelerated by this agreement,” said Barrick CEO Mark Bristow in a news release.

“Twiga, which will give the government full visibility of and participation in operating decisions made for and by the mines, represents our new partnership not only in spirit but also in practice.”

Barrick took over the management of the mines after buying the stake in Acacia Mining that it did not already own earlier this year.

Acacia and Tanzania had been embroiled in a dispute that started in 2017 when the country handed the African gold miner a US$190-billion tax bill.

Bristow said the agreement marks the end of the long impasse between the government and Acacia which had led, among other things, to the closure of North Mara and the freezing of export concentrate from the two other operations.

Since then it has negotiated the reopening of North Mara, although last week it blamed lower output there in part for third-quarter production that fell short of analyst expectations.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

UPDATE: Seven-year-old dies and her mother and two brothers are injured in trailer fire

Fire started shortly after 1 a.m. and took four hours to put out

Racist videos targeting Maskwacis are under investigation

Video images of what appears to be teenagers issuing racist and sexist… Continue reading

Red Deer County residents decry lack of public consultation over ‘enormous’ river water withdrawals

Noise, light, diesel emission complaints were made to the Alberta Energy Regulator

Woman no longer co-accused in 2019 Red Deer murder

Preliminary hearing of co-accused in murder began on Friday and resumes next month

Red Deer Mayor says city council’s advocacy isn’t over with shelter and hospital funding gains

Additional Crown prosecutors are still at the top of Tara Veer’s list

Fashion Fridays: Tammy’s big makeover

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

Your community calendar

Feb. 19 A Liberation of Holland event is being held at the… Continue reading

Canadian-Indians worry for their families as riots break out in India

Naila Saeed could do nothing but worry from afar when rioters descended… Continue reading

Public health agency weighs stronger COVID-19 protection for front-line workers

OTTAWA — The Public Health Agency of Canada says it will consult… Continue reading

Ukraine pledges help for airline compensation for Iran plane crash victims

OTTAWA — Ukraine’s ambassador to Canada says his government will help Foreign… Continue reading

Saskatchewan premier won’t commit to fall election; cites national unrest

ESTEVAN, Sask. — Saskatchewan Premier Scott Moe says rail blockades and the… Continue reading

Suspect charged with first-degree murder in death of 13-year-old Quebec girl

ST-JEROME, Que. — Friends and family of a teenage girl whose body… Continue reading

Tories call on government to compensate dairy farmers ‘left behind’ in new NAFTA

OTTAWA — The Conservative opposition says the government must compensate dairy farmers… Continue reading

Red Deer Construction Association honours local builders

5th annual Commercial Construction Awards took place on Thursday evening

Most Read