Acacia Mining Plc reported a slump in underlying core earnings on Thursday as it struggled with production issues at its North Mara gold mine in Tanzania, where it said pressure was building for a settlement of its row with the government.
Acacia, majority-owned by Barrick Gold, is embroiled in a long-running tax dispute with Tanzania. It has cut output by a third since the government banned the export of mineral concentrates in 2017.
London-listed shares of the mid-cap company were down 4 percent by 1020 GMT, deepening a 12 percent drop year to date.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) slipped to $24 million for the three months ending March 31, from $44 a year earlier.
Gold output dropped 13 percent to 104,899 ounces during the quarter, due to problems preventing access to higher-grade ore at the North Mara Gokona underground mine, the company said.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) slipped to $24 million for the three months ending March 31However, it stood by its production target for the rest of the year and said it believed it was nearing a settlement with the Tanzanian government that could transform its fortunes.
"We think the pressure is building on all parties to get a settlement," Interim Chief Executive Peter Geleta said in an interview. Among the factors increasing the pressure was an international arbitration hearing in the third quarter, he said.
The company also said new board members with long experience in the mining sector would bring fresh ideas as Alan Ashworth, Deborah Gudgeon and Adrian Reynolds were appointed independent non-executive directors with immediate effect.
Mike Kenyon and Andr?(C) Falzon will step down at the end of July after around nine years at Acacia.
The company is focused on addressing its challenges in Tanzania, but also has exploration projects, including in Kenya, where Geleta said Acacia could seek to bring in a strategic partner depending on further research into the prospect.
(By Muvija M and Barbara Lewis; Editing by Gopakumar Warrier and David Evans)