Dar es Salaam. Barrick Gold Corporations has announced that it has officially acquired shares it did not own at its subsidiary company Acacia in a court sanctioned scheme of arrangement.
The announcement was made by Mark Bristow President and CEO of the company yesterday through the firm’s website.
“Following the court sanction today, Acacia Mining plc and its operations become fully part of Barrick Gold Corporation and we welcome you into our family,” said Mr Bristow in the statement.
Mr Bristrow said Barrick Gold Corporation, which owns 64 per cent in Acacia shares, was determined to acquire all the shares it did not own in a court sanctioned scheme of arrangement from the minority shareholders of Acacia as a show of confidence in the potential of the operating assets of Acacia.
“We firmly believe that we can manage the assets better as part of the group and together with the Government of Tanzania as a 16 per cent shareholder, than the previous London Stock Exchange listed arrangement,” it adds.
During the process of negotiating the transaction, Barrick and the Government of Tanzania agreed to a framework that will reflect a 50/50 split in economic benefits from the operations, as well as direct involvement of the Government in managing the assets through a management company.
“We recognize that Acacia was previously not managed optimally, which resulted in a diminished license to operate in Tanzania, with communities, provinces and political leaders calling for Acacia mines to be closed,” Mr Bristrow said in the statement.
In September Tanzania Fair Competition Commission (FCC) officially announced that it was scrutinizing plans for Barrick Gold Corporation and Acacia to merger.
The FCC move came after Barrick Gold Corp agreed to buy out fellow shareholders in Acacia Mining in a deal that values the firm at 951 million pounds ($1.1 billion), ending a two-month standoff between the world’s second biggest gold miner and its Africa unit, in July.
Reached for his comments on whether FCC has approved the takeover its spokesperson Mr Frank Mdimi refused to comment.
“I can’t respond to your question since I am not aware of the new development, but you can send us questions,” said Mr Mdimi.
Although Barrick was the majority shareholder of Acacia, it did not have control over Acacia’s management through the complexities of the London Stock Exchange listing regulations.
In the statement Mr Bristrow said Barrick decided to acquire the shares that it did not own because it recognized its responsibility as a majority shareholder in Acacia to rectify these past issues.
In May the government declared Acacia Mining ‘unwanted’ and wrote to the company’s mines-Bulyanhulu, North Mara and Pangea Minerals-about the decision to lock out Acacia out of the business in the country.
According to the government Acacia management never respected the undertakings in the Mining Development Agreements (MDAs) which provided the legal framework for the subsidiaries’ operations.
They accused the company of been involved in massive tax evasion and harshly dealt with communities around its mines.
Barrick clinched a framework deal with Tanzania in 2017 that required Acacia to pay $300 million, hand over a 16 percent stake in its three gold mines and split the economic benefits from its operations on a 50/50 basis.