Tanzania – Tanzania-based gold miner Acacia Mining said on Tuesday that if the current exchange rate of the Tanzanian shilling (TSH) against the US dollar prevails until 30 June 2015, it is expected to impact the end of quarter revaluation of TSH denominated indirect tax balances owed to it, which are converted to USD for reporting purposes.
The exchange rate of 1 788 TSH to 2 094 USD are based on the Bank of Tanzania’s official published rate between 31 March 2015 and 22 June 2015.
Acacia said in an announcement that the total outstanding TSH denominated indirect tax balance, both long term and short term, was approximately US$124 million at the beginning of the second quarter and, excluding the impact of currency, has not materially moved during the quarter.
Acacia explains that any accounting loss from the revaluation will be allocated to “other costs” on the company’s profit and loss statement for the period and may therefore impact its earnings, although has no corresponding impact on cash flow for the period.
Acacia expects between 15-20% of its cost base to be denominated in TSH in 2015. Should the exchange rate remain at the current level the company anticipates a marginal ongoing benefit to reported costs going forward.
Acacia said that it would announce its second quarter and half year earnings on 27 July 2015.