Acacia Mining plc (lon:aca)
Acacia Mining Too Risky For Me

Acacia Mining plc Financials

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Acacia Mining plc Share Price
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Title: Acacia Mining Too Risky For Me
Company: ACA - Acacia Mining plc
Share Price Then: 175p
Author: Ian Smith
Date: Thu 03 Aug 2017
Comments: Acacia have two big issues.

Tanzania has banned the export of metallic mineral concentrates as they want them to be processed locally. Acacia are mining and having to stockpile them as they can neither export them or smelt them locally!

They is also an accusation of not declaring their exports of gold/copper concentrates from Tanzania correctly.

As Acacia denies this and disputes the credibility of the report that lead to the accusations it leaves outsiders in the dark as to what is really going on.

If you believe that this is all just a genuine foul up then you could easily see 200% growth if you buy shares today.

If you believe that this is some sort of play to increase taxes then what happens next is totally unpredictable, all of their exports could be banned effectively closing the company down.

The president of Tanzania John Magufuli is usually regarded as an anti-corruption politician so for him to issue a presidential order banning the export does suggest that there may be a genuine issue.

It is worth noting that President Magufuli was elected in 2015 so now would be about the right time for action if an honest and informed investigation had been started soon after he took office.

It could easily be that the view in Tanzania is that Acacia is acting in accordance with their contract but that the contract was so unfairly drawn up to the benefit of the Mining Company that the job of the President is to step in.

This would be consistent with a new law just past which will impose a 1% fee and three new Acts including one named Review and Re-Negotiation of Unconscionable Terms.

In other words it is all too complex for the private investor to make an informed decision on. There may be a question of back taxes that may be morally owed but not contractually plus partial nationalisation has been mentioned as a solution.
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