Tanzania-focused gold miner Acacia warned that a weaker shilling could hit its second quarter earnings by reducing the U.S. dollar value of the taxes it is owed, the company, formerly known as African Barrick, said.

The outstanding Tanzanian shilling-denominated tax balance owed to the company was worth approximately $124 million at the beginning of the second quarter.

Since then the shilling has weakened against the U.S. dollar and the tax balance has to be converted into dollars for reporting purposes.

“Any accounting loss from the revaluation… may therefore impact earnings, although has no corresponding impact on cash flow for the period,” the company said in a statement on Tuesday.

Acacia said also expected a small reduction in its cost base due to the weaker shilling.

About 15-20 percent of the company’s costs are denominated in shillings while the bulk of gold sales are in U.S. dollar or dollar equivalents.

Acacia will report its half-year results on July 27.

Reuters