Acacia Mining Shares Jump

Galtero Lara
Julio 21, 2019

Shares in Acacia soared 19% to 222p as Barrick, the world's second biggest gold miner, struck a deal to buy the 36% of Acacia it doesn't already own in a deal that values the overall business at £951m.

On Friday, Barrick announced plans to acquire the 36.1 per cent of Acacia it doesn't already own for US$428-million by paying 0.168 of its own stock for each Acacia share.

Acacia said on Friday that the new offer was not only considered fair, but would also allow Barrick to finalise the terms of a settlement agreement with the government of Tanzania.

Based on the closing price for Barrick shares in NY on 18 July, the deal values Acacia shares at about 232p each.

The firm has done well to get Barrick to up its offer, according to AJ Bell investment director Russ Mould, who said Barrick was in a "strong bargaining position" given it already owns nearly two thirds of the business.

Acacia was handed a $190-billion tax bill in Tanzania, which had been reduced to $300-million under a 2017 agreement.

Barrick's earlier proposal to take full control of its African unit to resolve a long-standing tax dispute with Tanzania has drawn the ire of Acacia's minority shareholders, who may have the ultimate vote on a deal.

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The deal comes as Barrick continues talks with the government Tanzania to settle a dispute that had halted Acacia's exports of gold and copper concentrates since 2017.

Geleta said he hoped a swift resolution to the lingering threat could be agreed.

Another pressing issue is that two Acacia employees and one former employee have been in jail in Tanzania since October.

The joint statement pointed out that an independent technical value of the Acacia exploration properties reflects an attributable value range of $37 million at the lower end and $87 million at the upper, and a preferred value of $57 million.

"We commend the two parties for the mutual agreement thus far".

Barrick chief executive Mark Bristow has previously criticised others in the mining industry for offering large premiums in company takeovers.

"We will eagerly wait for official communication from Barrick to chart the way forward".

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