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Highveld - In my view Acacia was innocent and there is evidence to show it. A Tz court ruled that they had paid all the tax due so then the gov't carried out its attack. They said that ACA had produced 10 times more gold than the company had declared. Think about the capacity of the processing plant - when they built it, if they had spent money on a plant that had ten times more capacity than needed, wouldn't major shareholders have asked why they wasted the money? The energy bills give a clue as to how much mining was done. If they had produce ten times the amount of ROM, the bills would have shown it. The only other way they coudl have produced 10 times as much gold would be if the grades in the veins were 10 0times richer - do you think the samples were out by that much?
ACA gave away a fortune in CSR. At one time when the region hit by drought, ACA bought 400 tons of food and distributed it to the locals.
ACA was innocent and the victim of a politically motivated raid.
All IMHO.
Here-here CD, Acacia got into trouble in Tz because their employees were bribing local officials to rip the country off: Worse than that, they didn't have the management strategies in place to prevent this from happening. They represented a paradigm of Western exploitation of African resources which has hopefully now been countered by progressive companies like SHA with strong and sincere ESG.
@ 16:18 - Agreed. And all of us should again read the following. SHG is not a tinpot operation and it carries clout in the mines' department:
So four of the management team will quietly be using their considerable weight. Posters on the fringes would do well to avoid disinformation before sounding off. It's almost as if retail investors think they know more than the funds and IIs who have gone very much further before taking the plunge.
https://www.shantagold.com/corporate/management/
https://miningconstruction-sadc.com/tanzania-singida-gold-investors-urged-to-prioritise-residents-near-mines/
[Philbert R is chairman of the Tanz chamber of mines]
Government regulations won't be to everyone's liking. They are in fact not dissimilar to S African post-Verwoerdian/Strydom/Botha local content rules which were targeted at 60%. That policy initially drove business colleagues nuts. Shanta is doing a lot more on the matter. The country, however, has no capacity and experience in manufacturing mining equipment and Magufuli knows it.
I suggest those who are short-termism look elsewhere. The earliest proper surge in fortunes is most likely around mid-2022. In the meantime SHG is going to do OK. And in Kenya the government mining wallahs are already licking their chops.
As an incidental I have revised my views on Zambia, i.e. NW copper belt extension. The government know they screwed up big time with Kaunda and his successors.
Artrader - informative.
Is that a Shanta tax investigation or a personal tax investigation?
Are you thinking we may be in danger of upsetting the Tanzanians?
MrBond
Eric is taking legal action to recover the VAT owed but meanwhile is being subjected to a Tax Investigation I would think that it would be odd if the Govt bought a 16% share whilst there was a tax investigation.
When Eric cancelled the proposed IPO on the Dar es salaam stock exchange to fund Singida I doubt if that went down well, he offered Tanzania a chance to become involved and then cancelled.
I think if he wants to continue in Tanz then he has to employ a Diplomat like Charles Santos of Aminex or borrow him after all Aminex got their licence after years of waiting.
The fact that Barrick has returned to Tanzania after their Tax Investigations and fines says a lot, there must be a fortune to be made even if one has to share a bit.
Like Leslie said on the analysts call the other day he was confident that VAT would get repaid and mentioned that when it was the effect on the SP would be significant
Interesting Tornadotony - if that is the case then the ‘selloff’ would seem rather overdone.
If the government were to take 50%, the VAT bill would need to be paid back and the cost of building the Singuida mine has to offset the 50% rate otherwise there is no incentive to grow assets. It also would have to allow $8-$10M Luika exploration. Other taxes that are currently paid are removed and they are quite substantial. It is therefore unlikely to have a material effect in the current year and next year as well.
If they opt for just 16% ownership and retain existing taxes that are far more than just Royalties the difference is not that great. Again the Government owes a lot of monies in kind from VAT repayments. The 16% is about the same bill as the VAT currently owed to the company.
The above is how I saw it and maybe I am wrong but I was not unduly concerned as it was similar to the status quo.
Thanks for that depressing read artrader! So does superstar Eric really have such a great relationship with the government?
The Tanz government want to own 16% of mining companies and increase royalties.
This is from 2017
https://www.reuters.com/article/us-tanzania-mining-idUSKBN19V23P
Guess if we knew that then we wouldn’t all be on tenterhooks and the share price would be 10p or back at 19p ?¿
Presumably Luke Leslie has modelled the options so I think a shame the bod couldn’t give clarity on the balance sheet for say, a Barrick type arrangement. Maybe they can’t show their hand atm.
Time will tell.
Hi all, I’ve seen 2 posts in past week on here. 1 says government is likely to take MORE of the revenue of SHG hence the SP decline (combined with IG effect) and 1 post says even if they did it would not take much difference as we nearly pay the required amount in royalties already....which is it?