LSE-listed Acacia Mining says it “strongly disagrees” with a number of matters set out in a recent announcement by parent company Barrick Gold, adding that the announcement “appears to have ignored the value of [Acacia’s] portfolio of exploration and development assets, and the strategic value of the company’s pre-emption rights pursuant to the relationship agreement between Acacia and Barrick”.

Acacia noted in a statement to shareholders, issued on Monday, that it continued to believe that, subject to an offer price that was “fair and which commands the requisite support of shareholders”, the acquisition by Barrick of the Acacia shares it did not currently own, would be an attractive solution for key stakeholders.

However, the miner “strongly disagrees” with Barrick’s view on Acacia’s life-of-mine plans, which it understands to underpin Barrick’s valuation and its proposed takeover price for Acacia.

Barrick, which is led by CEO Mark Bristow and already owns about 64% of Acacia’s shares, in May offered to buy the remainder of shares in the African gold miner after the Tanzanian government refused to directly negotiate a settlement with Acacia, with which it has been embroiled in a long-running tax dispute.

Acacia on Monday said it had not been provided with a complete or final set of agreements for the board’s review of Acacia’s operations and potential recommendation to Acacia shareholders.

The company further believes Barrick’s intervention in Acacia’s negotiations with the government of Tanzania, the length of time that Barrick’s negotiations with the government have taken and the way it has managed the direct negotiations, “have had the effect of undermining Acacia in Tanzania”.

Acacia further stated that the perception that Acacia has been the roadblock to the settlement had led to a material deterioration of Acacia’s operating position in Tanzania.

Nevertheless, Acacia reiterated that it still desired to engage with the Tanzanian government regarding a “negotiated resolution of the disputes”.

BARRICK PROPOSAL

Barrick noted in its announcement on June 18 that its buyout proposal, which valued Acacia at about $787-million, reflected a premium of 14.4% to Acacia’s closing price on May 20.

Acacia on Monday noted, however, that the terms of the proposal implied a 2.9% discount to the closing price of Acacia’s shares on May 20, being the last day prior to the receipt of the proposal.

During the period from May 20 to June 17, Acacia said that there had been a material increase of 15% in the gold price and 15% in the FTSE Gold Mines index.

Assuming Acacia were to have traded in line with the FTSE Gold Mines index, the current proposal would have remained at a discount, of 2.1%, to the pro forma adjusted market price.

On this basis, Acacia believes Barrick’s presentation of the proposal as representing a “premium” is misleading.

Barrick also asserted that the proposal sought to “give minority shareholders of Acacia the ability to benefit from any future potential upside in the Acacia assets”.

Acacia noted that, based on the terms of the current proposal, the Acacia shareholders, independent of Barrick’s aggregate holdings, would make up only 1.27% of the post-transaction issued share capital of Barrick as opposed to the 36.1% they currently hold in Acacia.

It follows that any potential upside from a resolution of disputes with the Tanzanian government would accrue 98.73% to Barrick’s existing shareholders, and Acacia’s minority shareholders in aggregate would share in only 1.27% of the upside, Acacia said.

On this basis, Acacia considers Barrick’s assertion that the minority shareholders would share in the upside to be “overstated”.