Acacia Mining slumps as it denies SFO investigation

(Sharecast News) - Acacia Mining kicked the week off on the back foot after saying on Friday that it was not aware that the Serious Fraud Office was investigating the company.In response to a Wall Street Journal article claiming that the gold miner was being investigated, Acacia said it "has been in contact with the SFO about allegations of corrupt activities in Tanzania which are the subject of proceedings in Tanzania".Acacia is currently embroiled in a row with the Tanzanian government, which banned the company from exporting gold back in March 2017 due to unpaid taxes.RBC Capital Markets analyst James Bell said: "Whilst potentially a negative for shares today, we think Acacia's immediate denial of a Serious Fraud Office investigation indicates that media speculation may not be correct."We understand that Acacia has been in contact with the SFO back in 2014 in relation to accusations in Tanzania of corruption. Similarly, the group gave an update to the SFO post the arrests of Acacia employees in October this year where the Government of Tanzania (GoT) levied charges of tax evasion, conspiracy, a charge under organised crime legislation, forgery, money laundering and corruption against an employee."It is potentially this most recent contact that has caused the story despite it being normal practice in our view for a UK company to notify the SFO in a scenario such as this. We note that relations between ACA and the GoT are already strained by ongoing negotiations around a settlement with parent Barrick. It is also worth remembering that ACA are continuing with an international arbitration claim against Tanzania."Bell said that while we await an update from the SFO, there is no reason currently to doubt the company's strong denial of the media article."However, with shares up more than 100% in the last three months we do acknowledge potential for some profit-taking today."At 1000 GMT, the shares were down 4% to 185.05p.