TORONTO – Barrick Gold Corp has reached an agreement with the Tanzanian government on a $300-million payment, a milestone toward resolving a dispute that has crippled the miner’s subsidiary in the African country, according to people familiar with the situation.

Executives from the Toronto-based producer and Randgold Resources, which is being bought by Barrick, met with Tanzanian negotiators on December 7, said the people, who declined to be identified as the talks are private. During that meeting, the two sides made significant progress on a deal that includes Acacia Mining paying $300-million in installments. The terms are now being handed off to a tax working group in Tanzania for review, the people said.

Once that group is satisfied with the numbers, the deal would have to be reviewed by Acacia’s board and the UK listing authority, and then voted on by shareholders, which could delay a resolution. Tanzania’s President, John Magufuli, would also need to review the findings of the group to be certain it’s in the best interests of the country, one of the people said.

Barrick, Acacia and Randgold declined to comment, as did Idris Kikula, chairperson of the State-run Tanzania Mining Commission.

TANZANIA-ACACIA DISPUTE
Acacia shares jumped as much as 6.5% in London, before closing up 5.4% at 198.9 pence, the highest since January. Barrick rose 3.1% at the close in Toronto.

In 2017, Tanzania banned exports of unprocessed metal and slapped Acacia with a $190-billion tax bill equal to almost two centuries of revenue, leading to a collapse in the stock. A preliminary framework agreement struck between Barrick executive chairperson John Thornton and Magufuli cut Acacia management out of the negotiating process. The deal involved Acacia and Tanzania splitting the economic benefits of operations going forward, which was less contentious than a $300-million payment, according to people familiar with the talks.

The relationship between Barrick and Acacia has been strained and progress moving the deal forward has been slow. Corruption charges have been levied against Acacia and some of its employees, further complicating sensitive talks.

The appointment of Randgold CEO Mark Bristow to head the company after the merger was widely seen as offering fresh hope for stalled talks. Randgold’s Willem Jacobs, who will head Barrick’s Africa and Middle East division, was present at the meeting, as was Barrick senior executive Kevin Thomson, the people said.

A deal would be a major victory for Bristow as he prepares to take the helm of Barrick in January. It’s also seen as an important first step should Barrick decide to buy up the shares in Acacia it doesn’t already own. That’s something Bristow has said he personally sees as an option, although talks haven’t been held on the matter.