Political row hammers gold miner for £200m

AN ONGOING dispute with Tanzania forced Acacia Mining to post a gloomy set of results yesterday, wiping nearly £200m off its market value.

As a result of Tanzania’s ban on exporting gold concentrate in a bid to develop a domestic smelting industry, Acacia said it is now targeting the lower end of gold production for the year in its half year results.

The miner, which has separately been accused by the Tanzanian government of undervaluing its gold concentrate by as much as ten times, said the ban – introduced in March – has so far cost it around £134.8m.

As a whole, revenues came in at around £310.7m, 22pc lower than the first half of 2016, while earnings came in at £124.3m, down by 13pc.

Matters were made worse yesterday when Tanzania’s president John Magufuli – nicknamed ‘the Bulldozer’ – threatened to close all the country’s gold mines if firms avoided talks to resolve tax evasion allegations. What’s more, Acacia was forced to issue a statement in morning trading denying reports that some of its employees have been asked to leave Tanzania as a result of the ongoing government dispute.

‘We have been cooperating fully with the government’s ongoing investigations and a number of our colleagues have been interviewed as part of this, but none have been arrested,’ a spokesman said.

Regardless, analysts at RBC said Acacia’s results were better than expected.

‘We continue to expect share price volatility through any negotiations and highlight a lack of resolution in the near term or a further breakdown in relations could see a significant downside,’ they said.

‘We continue to recommend investors take a cautious approach although shares are trading in line with our 285p target price.

Shares fell 17.2pc, or 48.4p, to 232.4p, making it the worst performer in the FTSE 350.

The FTSE 100 was back in the black after a week of strong trading, falling 0.47pc, or 34.96 points, to 7452.91. Betting firm Paddy Power Bet

fair hit its lowest value in more than a year following a double downgrade by analysts at Investec. The broker cut Paddy Power to ‘sell’ from ‘buy’ and lowered its price target by 30pc to 6970p, extending its losing streak to five days.

It said Paddy Power is likely to be hit by punter-friendly sports competitions over the summer and a tough regulatory environment. It predicts profits will slide 10pc in the firm’s second quarter. ‘We expect the market to be surprised by what we expect will be a disappointing second-quarter and first-half,’ the broker said.

Shares in the bookie fell 2.1pc, or 165p, to 7540p. In the FTSE 250, lender OneSav

ings Bank was among the biggest losers as analysts at Peel Hunt cut the firm’s target price following a number of recent acquisitions. With prices in the lending market increasing due to competitive pressure, Peel Hunt said the number of opportunities are reducing, which could moderate the outlook for OneSavings’ purchases.

Shares in the lender fell 3.5pc, or 14p, to 383.6p. London landlord Capital &

Counties saw shares fall after announcing it will step up spending in Covent Garden. The business raised £225m from eight US institutional investors. Capco also announced that it has returned to profit in the first half of the year, making £25.3m compared with a £198m loss a year ago. Shares fell 3.2pc, or 10p, to 301.2p.