[ad_1]
Acacia Mining is a small-cap mining company listed in the UK with interests in Tanzania. It is 64% owned by international mining giant Barrick Gold, who is buying Randgold Resources.
Acacia shares have attracted interest since their fall below 100 percentage points in September. Two years ago, they were worth more than 600p! They have almost doubled in recent months and the company is now capitalized at around 743 million pounds sterling. This should guarantee the promotion of the FTSE 250 index next month.
However, Acacia is currently facing a fierce conflict over mining rights and taxes on Tanzanian assets. The Tanzanian authorities have banned exports of mineral concentrates and imposed on Acacia a tax bill of $ 190 billion!
Recently, it was suggested that Barrick Gold, which sold Acacia's assets in 2010, could assume full control, but only after resolving issues with the Tanzanian government. This seems like a long way to go since last week again, Acacia has seen new charges. These included money laundering and bribery, while yesterday a senior leader was arrested and the company wants direct talks with Tanzanians and has threatened legal action.
Elsewhere, this morning, Acacia announced the signing of a binding conditional agreement with its partner, Sarama Resources, to terminate the South Houndé project price supplement agreement in the south of western Burkina Faso.
Acacia will receive milestone payments of $ 2 million when Sarama will become 100% owner of the project and an additional $ 2 million once commercial production begins. It will also receive 5 million warrants of common shares of Sarama that can be exercised for five years.
Acacia Mining chart analysis
Looking at the weekly price chart, there has been a good recovery in recent months. This is correlated with a recovery in the price of gold. However, perhaps Barrick's perspective of helping to solve problems with the Tanzanian government is also an indispensable contribution.
The risk to investors is the threat of additional legal problems due to the erratic behavior of the Tanzanian government.
According to the chart, there is a clear disparity between the volume of stock purchases and sales pressure, as shown by the Balance Sheet Balance Sheet (OBV) indicator at the bottom of the chart.
This indicator tells us that there were many more sellers down than up buyers; that the buyers did not come with the same vigor. Since the OBV measures the movement of stock prices relative to the number of contracts traded, the indicator would be almost at the top if an upward movement was supported by large purchases.
Currently, the price has risen but a low indicator on the chart suggests that buyers have not come back in numbers. We will know that the market supports this reversal of trend only if the recovery continues and the OBV indicator increases.
Source link
