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Acacia market capitalisation slips by Sh700 billion in April

Acacia market capitalisation at the Dar es Salaam Stock Exchange (DSE) slipped by Sh700 billion to Sh1.7 trillion as at April 30 this year from Sh2.4 trillion recorded during the first day of the same month.

The drop, which is nearly one third, was a result of decreased share price.

The DSE market reports have shown that the company share price closed at Sh4,200 during the last day of April, lower than Sh5,950 recorded on April 1, this year.

This is being experienced when the company posted worse-than-expected drop in gold production due to a ground fall at the North Mara Gokona underground mine, an excavator breakdown in the Nyabirama open pit and weaker output at Buzwagi.

The Tanzanian miner, who has been banned from exporting gold and copper concentrates from the country since 2017 in a bitter row with the government, said gold production fell by 13 percent to 104,899 ounces during the first quarter of this year.

Despite the hit on production, Acacia continues to expect output of 500,000 to 550,000 ounces for the year.

In its quarterly financial statement for the first quarter of this year, Acacia Mining slumped to an adjusted net loss of $7 million.

Underlying earnings before interest, tax, depreciation and amortization (EBITDA) slipped to $24 million for the three months ending March 31, from $44 a year earlier.

The firm’s biggest shareholder Barrick Gold has said that it was still in negotiation deal with the Tanzanian government, with a deal expected shortly to resolve the tax dispute and ban of concentrates.

A new deal could lift a major burden from Acacia, and is likely to boost share prices, analysts at Barclays Group said.

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