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Canada’s Barrick Gold bids for rest of Acacia as Tanzania refuses direct settlement

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Toronto-headquartered Barrick Gold has presented a proposal to its London-listed subsidiary Acacia Mining to buy the rest of the shares in the miner that it does not already own for $285-million.

The share-for-share exchange of 0.153 Barrick shares for each ordinary share of Acacia implies a value of $787-million for the Tanzania-focused miner.

In a statement late on Tuesday, Barrick explained that the government of Tanzania, which it had been negotiating for two years to seek a basis for a settlement of Acacia’s disputes, had refused to enter into an agreement directly with Acacia.

The mining company is embroiled in a long-running tax dispute with Tanzania. The miner was forced to cut output by a third after the government banned the export of mineral concentrates from the Buyanhulu and Buzwagi mines, in 2017. On Monday, the government fined Acacia $2.4-million for alleged pollution at its North Mara mine.

Barrick CEO Mark Bristow recently said that Acacia was not cooperating in solving the disputes in Tanzania, a notion that Acacia interim CEO Peter Geleta rejected.

“As a consequence of the negotiations with the government of Tanzania, Barrick has had the opportunity to undertake detailed due diligence on the Acacia assets and on the basis of this work has concluded that the proposal on the terms set out reflects the fair value of the company,” the gold major said in its statement on Tuesday.

Acacia closed 5.60% up on the London exchange on Tuesday at 159.50p a share, giving it a market capitalisation of £654.09-million, or about $830-million. The company listed on the main market of London in 2010, at the time still known as African Barrick Gold.

Barrick closed relatively unchanged at $12.12 a share on the NYSE and at down 1.22% at C$16.25 a share on the TSX.

—— AUTO – GENERATED; Published (Halifax Canada Time AST) on: May 21, 2019 at 10:43PM

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