Barrick Gold Corp. recently presented a proposal to the directors and senior management of Acacia Mining to acquire all of the shares it does not already own. The proposal assumed that no further dividends will be paid by Acacia. This implies a value for Acacia of US$787 million and total consideration to the minority shareholders of Acacia of US$285 million. Barrick currently owns a 63.9% interest in Acacia.
Barrick has been negotiating with the government of Tanzania for the last two years to reach a settlement regarding Acacia’s ongoing disputes with the government and to establish a viable framework under which Acacia could resume its full operations in Tanzania and rebuild its relationships.
Barrick said a basis for a settlement has been developed, but not finalized. It added that the government wasn’t prepared to enter into a settlement directly with Acacia. Acacia has been kept out of discussions between Barrick and the government.
The proposal is subject to the satisfaction of a number of customary conditions, including recommendation from the Acacia Board.
“Since the proposal is in Barrick shares, the Acacia minority shareholders will be able to benefit from any future potential upside in both the Acacia assets and Barrick’s broader portfolio of assets,” Barrick said in the statement.
In related news, Acacia confirmed it is working with Tanzanian government officials to rectify alleged discharges with its North Mara tailings storage facility (TSF). The company has been fined $2.4 million for the alleged pollution. In the meantime, operations at the mine remain unaffected.