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Acacia Mining rating cut, target slashed by UBS as it deems a near-term resolution to Tanzanian export ban less likely

Published: 10:23 01 Jun 2017 BST

Gold pour
Acacia was accused of not fully declaring all of the minerals contained in gold/copper concentrate

UBS has downgraded Acacia Mining PLC (LON:ACA) to ‘neutral’ on increased risks for the miner’s Tanzanian operations.

The Swiss bank had previously held firm on its ‘buy’ recommendation for Acacia after the shares had declined in the wake of a ban, announced on 2 March, on gold and copper exports from Tanzania.

UBS now thinks a near-term resolution of the export ban is less likely and has slashed its price target for Acacia from 500p to 300p.

“On 24-May a report was published suggesting ACA [Acacia] had not fully declared all of the minerals contained in gold/copper concentrate and the export ban would remain in place. We now have limited visibility on when the ban might be lifted, or conviction on the potential implications of any compromise between ACA and the Tanzanian government (tax assets, local ownership etc.). We believe the risk vs reward is now balanced and downgrade to Neutral,” UBS said.

Shares in Acacia currently trade at around 286p.

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