19th Jun 2019 08:54
(Alliance News) - Acacia Mining PLC on Wednesday said it "strongly" disagrees with statements made by parent Barrick Gold Corp on the situation in Tanzania.
On Tuesday, Barrick said it is "no longer possible" for Acacia to continue to act as an independent public company, with essentially all assets in Tanzania.
Barrick, which owns 64% of Acacia and is mulling offering for the rest, has been leading talks with the Tanzanian government to resolve Acacia's problems in the country, which date back two years.
"The government of Tanzania has, however, now made it clear it is not prepared to enter into settlement agreements directly with Acacia," said Barrick on Tuesday.
"In Barrick's view, it is now clear the relationship of Acacia with the government has been so damaged by the events that led to the concentrate ban being imposed by the government in March 2017 and by the subsequent arbitration proceedings initiated by Acacia against the government, that it is no longer possible for Acacia to continue to function as an independent public company, with substantially all of its value represented by assets in Tanzania."
Barrick identified some risks in Acacia's plans, including resource uncertainty at the Bulyanhulu mine, which is currently on care and maintenance.
Barrick also questioned Acacia's grade assumptions at the Deep West orebody at Bulyanhulu, as well as throughput targets, and the Canadian giant believes upfront capital cost assumptions by Acacia are lowered than the reality.
On Wednesday, Acacia responded: "The company strongly disagrees with a number of statements made in the announcement. The company is also surprised with the circumstances and timing of the announcement, which immediately followed earlier announcements regarding Acacia's agreement to Barrick's request for an extension to the deadline.
"The company will provide a detailed response to the relevant aspects of the announcement, as appropriate, in due course."
Barrick now has until July 9 to make a firm offer for the rest of Acacia's shares, with the prior deadline being Tuesday. It has offered 0.153 new Barrick shares per Acacia share, valuing Acacia at USD787 million, with the stake under offer worth USD285 million.
Acacia shares were 1.3% higher on Wednesday morning at a price of 175.30 pence each.
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