10th Jul 2019 07:45
(Alliance News) - Barrick Gold Corp is to meet with Acacia Mining PLC next week, it said Wednesday, following the publication of a report which valued Acacia far above Barrick's offer.
On Tuesday, Acacia said SRK Consulting UK Ltd has been carrying out a review of the company's assets, including resource and reserve statements and life-of-mine plans, for the past eight months.
Barrick has previously criticised these plans, questioning their validity. SRK, a "highly reputed" industry body, has given a value for Acacia based on the review of 271 pence to 281 pence per share, Acacia said Tuesday.
Barrick owns 64% of Acacia and has offered USD285 million for the rest, though the two have not yet come to an agreement.
Barrick is offering 0.153 new Barrick share per Acacia share, giving Acacia shares an implied value of 146p, far below the SRK valuation.
Barrick has been granted a deadline extension to July 19 to make a firm offer for the company, or decide against one.
"Barrick intends to meet early next week with representatives of Acacia and SRK to discuss the SRK report and related matters. Shareholders will be provided with an update not later than the end of next week," said Barrick on Wednesday.
Barrick said the SRK report has highlighted some of the issues it has previously flagged up, saying: "Barrick notes the risk factors listed in the SRK report corroborate the importance of the issues as set forth in Barrick's June 18 press release, not least since the valuations of Bulyanhulu assume the successful conversion of a large portion of deep high grade inferred mineral resources to mineral reserve."
Last week, Acacia updated the mineral reserves and resources at the North Mara mine in Tanzania, and also posted on Monday a 19% year-on-year rise in second-quarter gold production. Output was up 51% quarter-on-quarter.
Barrick said the North Mara changes "validate" its own models, and also said the second quarter production is unsustainable given it came from a far higher grade area than the rest of the Gokona underground reserve.
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