Mixed trend for Acacia stocks in Dar, London as week opens

Tuesday September 17 2019



Mark Bristow, CEO, Barrick Gold

Mark Bristow, CEO, Barrick Gold  

By Halili Letea @hletea hletea@tz.nationmedia.com

Dar es Salaam. The share price for Acacia Mining started the week on a low note yesterday at the Dar es Salaam Stock Exchange (DSE) despite its improvement at the London Stock Exchange (LSE) as investors reacted to news of its acquisition.

Barrick Gold Corporation announced at the weekend that it had officially acquired shares it did not own at its subsidiary company in a court-sanctioned 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 (Saturday), 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.

Minority shareholders

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.

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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.

Acacia’s share price at the DSE started the week yesterday at Sh6,600, the same as last Friday.

The Sh6,600/share was 3.65 per cent lower than the Sh6,850 that the gold miner’s share fetched on Thursday, September 12, 2019.

Data from the LSE – where Acacia’s original listing is - however show a contrasting story.

Each Acacia Mining share fetched GBX233, marginally higher than GBX231.80 last Friday.

Analysts say it was common knowledge for investors to react to any change in a company’s ownership.

Investor panic

“The price movements are most likely caused by investor panic over changes and this is normal in share trading…Barrick Gold is a big company with high reputation on mining and we hope the acquisition will restore investors’ confidence in the company, something that will result into price stabilization,” said Orbit Securities Limited chief executive officer, Juventus Simon.

The head of stock brokerage at Arch Financial & Investment Advisory Limited, Mr Lukwaro Semboja, said the investors’ reaction to the acquisition would be minimal because Barrick Gold already owned a controlling stake in Acacia Mining.