London-listed Acacia's share price plunged 8% at close on Friday after saying it could not make the $300m good faith payment agreed with the Tanzania government according to the FT.
Acacia's chief financial officer, John Wray, was reported to have said to analysts, "We don't have the ability to make an upfront $300m payment."
The mining company has been in an ongoing dispute with the Tanzanian government and has been under a ban on the export on concentrates since 3 March effectively preventing Acacia from exporting gold from the country. The ban and the loss of value added tax refunds have hurt the company's third quarter results.
Third quarter revenue fell to $170.6m compared to $284.7m over the same period the previous year. Gold production dropped to 191,203 ounces from 204,726. The amount of gold sold also decreased to 132,787 from 206,488 over the same quarter the previous year.
Deal, no deal
Majority shareholders, Barrick Gold Corp, which holds a 64% stake in Acacia, has been negotiating with the government on its behalf. On Thursday, Barrick Gold appeared to have reached a deal with the Tanzanian government and released details of the framework reached.
Among the key terms reached between the two parties was to review conditions for lifting the ban. It also said a "new Tanzanian operating company will be created to manage Bulyanhulu, Buzwagi and North Mara mines and all future operations in the country", which would operate under "total transparency" between partners.
The operating company would maximise employment of Tanzanians and split the economic benefits 50/50 between the company and the government. It also agreed Acacia will make a payment of $300m to the Government of Tanzania, on terms to be settled by the working group to resolve outstanding tax claims.
However, Acacia put out a press release on Friday saying that as yet there was no formal proposal put forward to the company for consideration.