Barrick Gold reaches deal for Acacia Mining after raising offer for company
TORONTO – Barrick Gold Corp. has reached a deal to buy the stake in Acacia Mining that it does not already own, after raising its offer for the African gold miner.
Under the deal, the Toronto-based mining giant will swap 0.168 of a Barrick share for each share of Acacia in a transaction that values the company at about $1.56 billion (951 million pounds).
Acacia shareholders will also be entitled to receive special dividends related to Acacia exploration properties. As well, shareholders will be entitled to deferred cash consideration dividends paid as a result of the sale of certain Acacia exploration properties.
Barrick, which owns about a 63.9 per cent stake in Acacia, had previously offered 0.153 of a Barrick share for each Acacia share in May.
The deal could help clear the way for Barrick to resolve a major dispute between Acacia and the government in Tanzania that started in 2017 when the country handed the African gold miner a US$190 billion tax bill.
Since then, Acacia has faced export restrictions, reduced production, and accusations of environmental and financial violations as negotiations dragged on.
Just this week Tanzania ordered the company to stop using a tailings storage facility at its North Mara mine due to seepage from the facility.
Barrick has been negotiating with the government since the dispute began, and in late 2017 reached a proposed settlement that would include a US$300 million payout as well as future 50-50 profit sharing from Acacia’s three mines in the country.
London-based Acacia didn’t endorse the settlement and has asked for more direct involvement in the negotiations.
Shares in Barrick have risen from about $16 at the end of May to $22.46 on the Toronto Stock Exchange on Thursday.
Barrick spun out its African gold assets into a separate listing called African Barrick Gold in 2010, later renamed Acacia.
Mark Bristow, who came on as CEO of Barrick at the start of the year, brought with him extensive experience working in Africa after previously leading Randgold Resources.