Barrick to give Tanzania stake in mines, $300 million to end dispute

“A partnership requires trust between the parties, and transparency is the currency of trust,” Thornton said in the statement. “Through our discussions over the last three months we have established both and this will form the basis of our relationship in the future.”

Barrick said a new Tanzanian operating company will be created to manage Acacia’s current and future mines in the country, it noted in a separate statement issued later Thursday. Such firm is expected to maximize employment of locals, building local capacity at all levels of the business, from board membership to operations.

The deal doesn’t mean Tanzania will immediately lift the demand for Acacia, in which Barrick has a 64% stake, to pay $190 billion in allegedly unpaid taxes. But the parties agreed to form a working group that will focus on the resolution of the outstanding tax claims, Barrick said.

The agreement doesn’t cover either whether an export ban on gold and copper concentrates affecting Acacia will be lifted.

Still, investors reacted positively to the news, with Acacia’s shares soaring more than 20% to 227.8p. Barrick’s stock, however, was trading slightly down in Toronto (-0.15%) to Cdn$20.13, and also in New York (-0.37%) to $16.11.

The world’s largest gold producer and the Tanzanian government have been in talks for months trying to reach a deal on the issues affecting Acacia’s operations, which in turn have hit Barrick’s production.

The parties first locked horns in March, when the government banned exports of concentrates, which represents about a third of Acacia’s output.

Less than four months later, Tanzania accused Acacia, the country’s No.1 gold producer, of operating illegally and evading tens of billions of dollars in taxes by understating the amount of metal concentrate in exports from the three gold and copper mines it operates in the country.

Acacia Mining, which owns and operates Tanzania’s three major mines — Bulyanhulu, Buzwagi and North Mara, said it was still studying the deal reached by Barrick and would issue a statement later on Thursday.

The African nation is the continent’s third-largest gold producer.