ABX Barrick Gold Corporation

By Jacquie McNish 

Barrick Gold Corp. is poised to restart gold mining in Tanzania after the company agreed to pay $300 million to the African country and share ownership and other benefits at its three local mines.

Barrick's gold exports from Tanzania have been halted since early 2017 over tax and other disputes with the government. Barrick CEO Mark Bristow said that the agreement marks a new era of partnership with a host country that ends "three years of value destruction."

The deal, which is subject to approval of Tanzania's attorney general, requires Barrick to form a new company, Twiga Minerals Corp., to manage the company's three gold mines. Barrick has agreed to give Tanzania a 16% stake in each of its three mines and share half of the mines' royalties, cash distributions and other economic benefits with the country.

Mr. Bristow has promised a resolution to the complex legal and political dispute since he took the helm at the Toronto-based gold miner in January. The South-African-born executive joined Barrick after its $6 billion all-share merger with Randgold Resources Ltd., which he helped found in 1995.

Barrick's gold exports from Tanzania were stopped after the country's President John Magufuli launched what he called an "economic war" against foreign miners that he alleged weren't paying sufficient taxes and royalties.

Barrick was served in 2017 with a $190 billion bill for what Tanzanian authorities said were unpaid taxes, penalties and interest accumulated in previous years.

At the time of the shutdown, Barrick's majority-owned African subsidiary Acacia Mining PLC was the country's largest gold miner with $1 billion in annual revenue.

Barrick's executive chairman John Thornton sought to lift the export ban in late 2017 with a surprise offer to pay Tanzania $300 million and other benefits. The overture hadn't been approved by Barrick's board or by directors at its subsidiary Acacia, triggering a governance tug of war that delayed a settlement in Tanzania.

Barrick overcame the impasse by acquiring full control of Acacia earlier this year.

Write to Jacquie McNish at Jacquie.McNish@wsj.com

(END) Dow Jones Newswires

October 20, 2019 13:30 ET (17:30 GMT)

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