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Acacia dismisses Barrick's view on miner's value

Published 2019-06-24, 08:52 a/m
© Reuters.  Acacia dismisses Barrick's view on miner's value
ACAA
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GOLD
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June 24 (Reuters) - Acacia Mining ACAA.L said on Monday it strongly disagreed with majority shareholder Barrick Gold Corp 's ABX.TO valuation of the company, saying it rejected Barrick's view of its life of mine plans.

However a fair value buyout offer from the world's No. 2 gold miner would be attractive, it added.

Barrick's 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. Barrick's May 21 share-for-share proposal valued Acacia at $787 million. It said its proposed offer is "more than fair" and has said it will engage with Acacia's board and minority shareholders to win them over.

The company valued Acacia's assets at $1.3 billion in its 2018 annual report but said last week that following a review it had concluded that some of Acacia's assumptions about its assets were not supportable.

Acacia said Barrick's proposal appears to have ignored the value of its portfolio of exploration and development assets.

It said its life of mine plans have been formulated in line with "industry standard methodology", adding that it hosted Barrick representatives for brief site visits during the first quarter of 2019 and gave Barrick its draft life of mine plans.

Barrick spun off Acacia into a separate company in 2010, in which it owns a 63.9% stake, according to Refinitiv Eikon data.

The offer followed two years of wrangling over a $190 billion Tanzanian tax bill, which has since been reduced to $300 million.

"The length of time Barrick's negotiations with the Government of Tanzania have taken and the way they have managed their direct negotiations have had the effect of undermining Acacia in Tanzania," Acacia said in a statement.

"The perception that Acacia has been the roadblock to the settlement has led to a material deterioration of Acacia's operating position in Tanzania," the company said, clarifying that it did not invite Barrick's intervention into the negotiations.

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