Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
African gold producer Acacia Mining (LON:ACA) posted Monday a 19% output increase for the second quarter from its flagship mine in Tanzania, adding pressure on its largest shareholder, Barrick Gold (TSX:ABX)(NYSE:GOLD), to revise its low-ball takeover offer.
The London-listed miner said overall gold production rose 51% to almost 159,000 ounces in the three months to June, up from 105,000, thanks to North Mara mine’s “record breaking performance”. That operation churned out 119,000 ounces of gold in the quarter and set a monthly production of nearly 48,000 ounces in June.
Results come as Barrick, which owns about 64% of Acacia, has less than 24 hours to sweeten its bid for the embattled Tanzania gold miner
The announcement comes as Barrick, which owns about 64% of Acacia, has less than 24 hours to sweeten its bid for the London-listed subsidiary. The company, which spun off from Barrick in 2010, has accused the Canadian bullion mammoth of trying to take advantage of problems in the country to buy the company at a knockdown price.
It also follows Legal and General’s opposition to Barrick’s opening offer to buy the 36.1% of Acacia it does not already own.
The fund manager, which owns just under 1% of Acacia, said over the weekend the Toronto-based miner’s proposal raised “serious questions” about the treatment of minority shareholders.
It also said Legal and General didn’t endorse “any historic activities by Acacia in Tanzania, and acknowledge[s] there is significant uncertainty about the value remaining in the company”.
Acacia, Tanzania’s No.1 gold producer, has been embroiled in a battle with the East African nation since 2017, when the government banned exports of unprocessed metal and slapped it with a $190 billion tax bill — equal to almost three centuries worth of revenue.
The company was also forced to cut output by a third from two of its three mines in the country — Bulyanhulu and Buzwag.
In the meantime, its share price has dropped by almost 70%, though they are 13% up since May 22, when Barrick first made the buyout offer.
Barrick’s chief executive Mark Bristow has said the proposed takeover is the only way to improve Acacia’s relations with the government of Tanzania.
The gold giant originally had until June 18 to come up with a formal, perhaps better offer, but UK regulators extended the deadline until July 9.
Comments
Kyagulanyi-Kaggwa
This is a very important information,news about the top ten -10 biggest mining company in the world and this gives a clear picture of gold as it is a safe haven in terms of business development, much as the price may rise and come down,but still gold is still where those who have a right insight to keep there wealth,be it banks as well as any other people who no the importance of the yellow metal in international business development and to keep one,s money safe ,as we move on for the way forward
I have the interest of working in this area of gold and looking forward to continue working with those who may be interested in marketing their yellow metal
Please keep on giving out this very important information,especially to us who understand the importance of this commercial line, and also want to serve those companies ,when they give us the mandate to market their gold as based on their guidelines of serving them