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LONDON, Feb 12 (Reuters) - Acacia Mining has scrapped its 2017 dividend after full-year core earnings fell by more than a third because of a ban on unprocessed mineral exports in Tanzania, it said on Monday.
The company, which is majority owned by Barrick Gold , said full-year earnings before interest, tax, depreciation and amortisation (EBITDA) fell 38 percent to $257 million after taking a $644 million impairment charge.
Acacia, Tanzania’s largest gold miner, is grappling with a ban on concentrates introduced in March 2017 that in September forced it to reduce operations at its flagship Bulyanhulu mine
Tanzania is making sweeping changes to its mining industry to reap greater rewards from the east African country’s resources. In July, Acacia was served with a $190 billion bill for unpaid taxes, penalties and interest.
Acacia expects its 2018 all-in sustaining cost of producing an ounce of gold, an industry benchmark, to rise to between $935 and $985, while production should be broadly flat on the previous year.
“Whilst we were impacted by events beyond our control, we took decisive action to stabilise our business and believe our operations are now well placed to deliver in 2018,” interim chief executive Peter Geleta said in a statement.
The company sold its 2 percent royalty asset in Burkina Faso for $45 million and spent a combined $5.2 million hedging its gold production at $1,300 per ounce and $1,320 per ounce.
The export ban resulted in about $264 million in lost revenue and a cash burn of $237 million in 2017, Acacia said, but it expects to return to cash-flow generation this year.
Negotiations between Barrick and the Tanzanian government are ongoing, Acacia said. (Reporting by Zandi Shabalala; Editing by David Goodman and David Holmes)