Barrick Gold reaches deal for Acacia Mining after raising offer for company

Andrew Cummings
July 21, 2019

Barrick spun off Acacia in 2010, but still owns a 64 per cent stake and said earlier this year it wanted to take back full control as it sought to resolve a protracted dispute between Acacia and Tanzania over valuable mining assets.

"Depending on what they look like after they are in a reasonable form, we will again look to see if there is a better home for some of the assets that might not fit the Barrick investment filter", he said.

However, a few months ago, Barrick said that Tanzania wouldn't consider any deal if Acacia remained as a counterparty.

Under the terms of the deal, each Acacia shareholder will receive 0.168 new Barrick shares plus any special dividend related to Acacia's exploration properties as well as any deferred cash consideration dividend paid from the sale of any of those exploration properties, according to a joint statement.

Barrick's final offer represents a 24.3 per cent premium to Acacia's closing price on Thursday.

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. With these new terms, Barrick will pay US$428 million for the over 410 million remaining Acacia shares, for a total company value of US$1.19 billion.

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.

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

The deal with Barrick will be "a good opportunity to rebuild relationships", Geleta said.

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

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

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