(Reuters) - Gold miner Acacia, which is locked in a dispute with the Tanzanian government, said it has bought put options covering 210,000 ounces of gold at $1,300 per ounce.
The options, worth $3.2 million, provide a minimum price for the majority of the group’s expected doré bar production for the next six months above its budgeted gold price of $1,200 per ounce, the miner said on Wednesday.
Doré bars are rough gold, an alloy of gold and silver.
Options will expire in equal installments of 35,000 ounces per month.
Put options will give the company the right to sell gold at the strike price when it is struggling with negative cash flow due to its conflict with the government in Tanzania.
Acacia is majority-owned by Canada’s Barrick Gold.
Reporting by Rahul B in Bengaluru; editing by Jason Neely