Barrick Gold Corporation, the largest gold mining company in the world, has announced that the scheme to acquire the shares it did not already own in Acacia Mining, Tanzania’s largest gold producer, has today become effective.
Under the scheme, Acacia’s shareholder will receive 0.168 New Barrick shares and any Acacia Exploration Properties Special Dividends and any Deferred Cash Consideration Dividends.
The listing of Acacia shares on the London Stock Exchange was suspended with effect from 7.30 a.m. (London time) on 17 September 2019.
The reasons for the acquisition of Acacia by Barrick are found in Acacia’s ongoing disputes with the Government of Tanzania (GoT) that affected the company’s operations in the country.
In March 2017, the GoT announced a ban on the export of metallic mineral concentrates and, as a consequence, Acacia took the decision to place the Bulyanhulu gold mine on reduced operations.
In addition, there are numerous ongoing unresolved disputes between the GoT and Acacia Group companies, including disputes in relation to tax, environmental and criminal matters.
In particular, a presidential committee found in May 2017 that Acacia allegedly under-declared its exports and eventually presented it with a demand for USD 190 billion in unpaid taxes.
The company has always refuted the accusation and has been since in talks with the Government of Tanzania for a resolution, without success.
Barrick, which had 63.9% shareholding in Acacia, signed on October 2017 a set of framework documents with the GoT which envisaged a USD 300 million settlement payment and subsequent 50/50 sharing of economic benefits between Acacia and the GoT.
The GoT will receive its share of economic benefits through taxes, royalties, fees, and other fiscal levies and through the GoT’s 16% free carried interest in all distributions (including shareholder loan repayments).
As Acacia was not permitted to participate in the discussion, Acacia was not a party to the framework documents and was not involved in negotiating the terms included therein.
There followed a lengthy period of time during which Barrick and the GoT were discussing a set of agreements to implement the framework documents.
Mark Bristow, CEO of Barrick Gold, commented “We recognize that Acacia was previously not managed optimally. We firmly believe that we can manage the assets better as part of the group and together with the GoT as a 16% shareholder.”