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Acacia Mining shares rose after it said fourth quarter production was better than expected and added that negotiations are continuing with the Tanzania government to end a long-running dispute.

Fourth quarter gold production was “slightly ahead” of expectations at 148,477 ounces but 30% lower than the same period a year ago after reducing operations at the Bulyanhulu mine in Tanzania.

Last year,the company decided to scale back activity at Bulyanhulu to mitigate lost revenue resulting from an export ban by the Tanzania government.

The government claims Acacia owes royalties on undeclared exports of gold and copper concentrates from the Bulyanhulu and Buzwagi mines.

The miner’s Canadian parent Barrick Gold Corporation has struck a tentative deal to settle the row and plans to present a detailed proposal for review in the first half of 2018.

In its fourth quarter statement, Acacia said it was “continuing to support efforts towards achieving a negotiated resolution with the Tanzanian government”.

“We are pleased to report fourth quarter production of 148 477 ounces driven by strong operational performance at Buzwagi, whilst we successfully transitioned Bulyanhulu into a reduced operational state,” said Peter Geleta, interim chief executive, Acacia.

“Disciplined cost management, combined with the operational performance, led to fourth quarter all-in sustaining costs (AISC) of US$779 per ounce (US$952 per ounce in 2016), which helped to significantly reduce the cash outflow in the quarter despite the cost of transitioning Bulyanhulu to reduced operations.”

At the end of the period, the group agreed to sell a 2% net smelter royalty in the Hounde gold mine in West Africa to Sandstorm Gold for US$45miln to shore up its balance sheet. Proceeds from the sale of the non-core royalty will be received in January.

 

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