Acacia to sell Kakamega gold mine

UK-based gold firm Acacia Mining has put its Kakamega gold mine on sale.

The company has also scaled down its operations in the area, substantially reducing its workforce in the mines as it prepares to exit in the course of this year.

The firm came to limelight locally in 2017 when it announced a major gold discovery in Kakamega.

At the time, it described the find as that of high-grade gold and estimated that the mines at the Liranda Corridor in Kakamega had a resource of 1.31 million ounces of gold, whose grade, it said, was one of the highest in Africa.

The resource could be valued at $1.65 billion (Sh171 billion). Acacia has, however, not been able to move the mines to production and now says it is planning to sell all or part of the licences it had been granted to explore for gold in the area.

It said it was weighing different options, including bringing in a partner with conventional mining expertise to take the project forward.

“In late 2018, Acacia commenced a review of its exploration portfolio and took the decision to divest or explore the possibility of bringing in a partner for its licences in western Kenya,” the company said on Monday when it published in its financials for the year to December 2018.

“Because of the potential divestment or joint venture process, a minimum expenditure budget has been put in place for 2019. The number of staff members was reduced to 15.”

The possible exit of Acacia from Kenya follows turbulent years in Tanzania. The company, the biggest producer of gold in the country, was in 2017 slapped with a Sh19 trillion tax bill by the Tanzanian Government.

The Government claimed the firm had not paid taxes amounting to Sh4 trillion since 1998 while Sh15 trillion is in interest and penalties, a demand that shocked the global mining industry. This issue is currently under international arbitration.

Three of its employees were last year arrested and charged with money laundering and tax evasion, with the cases still ongoing. Other than Acacia, Goldplat, also headquartered in the UK, has recently announced plans to sell a stake in its gold mine in Narok County.