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UPDATE 2-Acacia says can't pay $300 million upfront that deal with Tanzania calls for

Acacia Mining said it could not immediately pay the $300 million that its majority shareholder agreed to hand the government of Tanzania to settle a dispute that has crippled the company’s operations in the east African country. Acacia's majority owner, Barrick Gold , said on Thursday it had agreed with Tanzania for Acacia to hand over the money and a 16 percent stake in three of its mines and to split the "economic benefits" from those operations ]. The agreement appeared to be the first step towards a resolution of a months-long stand-off that began in March, when the government banned exports of unprocessed minerals. In July, Acacia was served with a $190 billion bill for unpaid taxes, penalties and interest. But Acacia's executives managers said on Friday that they had not been presented with any formal proposal and were seeking more clarity on the agreement. "... The first comment I would make is that Barrick is equally aware of our balance sheet as we are," said Acacia's chief financial officer, Andrew Wray, on a call with analysts. "We don't have the ability to make an upfront $300 million payment," he said, adding that a Barrick and government working group would need to come up with a solution. Acacia shares traded in London tumbled 7 percent to 198 pence by 1218 GMT, partly erasing a 16 percent gain on Thursday after the agreement was announced. The shares have fallen over 60 percent since the disputes broke out. Tanzania's largest gold miner, Acacia has been hurt by the country's sweeping changes in the industry. Those range from a ban on exports of unprocessed gold and copper to laws that increase state ownership of mines, based on the government's belief that it is not getting a fair share of Tanzania' mineral wealth. As a result of the March export ban, Acacia reported on Friday that its core earnings, or EBITDA, fell 60 percent to $50 million in the third quarter. The company also cut spending by 33 percent and hopes to return to cash generation in early 2018. Net cash in the third quarter slid 88 percent to $24 million from a year ago and its cash balance at the end of September was $95 million, down nearly 70 percent from a year earlier. In an effort to stanch the flow of cash, Acacia shut underground operations at its Bulyanhulu mine, changed the mine plan at Buzwagi mine to produce more processed ore and bought put options on its gold . Acacia, which was not directly involved in the talks with the government, said it would need to approve the deal with Barrick. Acacia Chief Executive Brad Gordon said it was also agreed that a Tanzanian operating company would be formed and that a working group would start work to resolve Acacia's $190 billion tax bill, the export ban and flesh out how the $300 million would be paid. "It is still very early in the process. There is a long way to go before any proposal is made to Acacia," Gordon said. Acacia said gold production for the third quarter fell to 191,203 ounces, down 8.3 percent quarter on quarter, as it had reported on Oct. 12 . Full-year production was maintained at 750,000 ounces, at a cost of $880 to 920 ounces. Jefferies analysts said in a note that EBITDA came in below its estimates and consensus expectations, but investors would "focus on gaining more clarity following yesterday's announcements regarding a potential solution to the Tanzanian export ban". (Reporting by Zandi Shabalala in London and Sanjeeban Sarkar in Bengaluru; editing by Larry King)

PRECIOUS-Gold falls as hopes of U.S. tax reform boost riskier assets

Gold prices fell on Friday after the U.S. Senate approved a budget blueprint that paves the way for tax cuts, causing European stocks, the dollar and bond yields to rise as investors betting on faster economic growth bought riskier assets. The Republican-controlled Senate voted by 51-to-49 late on Thursday for the measure, which clears a hurdle to President Donald Trump's plans to reduce taxes by up to $6 trillion. Higher bond yields increase pressure on bullion because gold does not offer a yield, while a stronger dollar makes it more expensive for holders of other currencies. Investors may also see tax cuts as a cause for higher U.S. interest rates, said INTL FCStone analyst Edward Meir. Higher rates would push up bond yields and the dollar. Spot gold was down 0.5 percent at $1,282.90 an ounce at 1033 GMT, taking losses this week to 1.6 percent. U.S. gold futures for December delivery were 0.4 percent lower at $1,285 an ounce. "We seem to once again be ready to test technical support around $1,275-$1,270," said Mitsubishi analyst Jonathan Butler. "If we look at the chart, it's a classic head and shoulders pattern here and the danger is we'll break lower to a level at $1,250 or even below." Analysts at Commerzbank said gold's failure to remain above $1,300 could prompt speculative investors betting on higher prices to exit their positions, pushing prices lower. The net long position of money managers in Comex gold has fallen from a peak in early September but is still at an elevated level. Meanwhile, Trump could announce his choice for the next chair of the U.S. Federal Reserve as early as next week after he interviewed five candidates including current chief Janet Yellen. A report on Thursday suggested Trump was leaning towards Fed Governor Jerome Powell, perceived as a less hawkish candidate. The European Central Bank is expected to say on Oct. 26 it will start trimming its monthly asset purchases to 40 billion euros from 60 billion euros in January, a Reuters poll showed. In other precious metals, silver was down 0.1 percent at $17.19 an ounce, taking its fall this week to around 1 percent. Platinum was 0.1 percent lower at $920.99 an ounce and palladium was up 1.3 percent at $971.40. Both metals were down on the week. (Additional reporting by Apeksha Nair in Bengaluru, editing by David Evans)