(Alliance News) - Acacia Mining PLC said Tuesday it has granted its Canadian parent Barrick Gold Corp an extension to the deadline for Barrick to make an offer for the remaining shares in Acacia it does not already own.
In May, Acacia received an all-share takeover offer from gold mining giant Barrick for the rest of the Acacia's shares. Barrick already owns 64% of Acacia
Barrick is offering 0.153 of a new Barrick share per Acacia share. Shares in Acacia closed 1.5% higher in London on Tuesday at 173.00 pence each.
At the time, Barrick said the deal values Acacia at USD787 million, and the stake under offer at USD285 million. Acacia's market capitalisation in London was GBP709.5 million at Tuesday's closing price.
Acacia said the offer is an "attractive solution" for the company.
Barrick asked for the extension to a deadline that required the gold miner to make an offer before 1700 BST Tuesday. Acacia has granted the extension, pushing the deadline to July 9.
In a statement, Barrick said: "This extension will allow for the continuation of discussions with the independent directors and further engagement with Acacia's shareholders concerning the proposal made to Acacia."
Acacia has been under pressure since Tanzania in 2017 banned all exports of metal concentrate in an effort to keep processing activities in the country.
Acacia has three producing mines in Tanzania: Buzwagi, Bulyanhulu, and North Mara.
Barrick has previously said it continues to make "significant progress" in coming to terms with the government of Tanzania over Acacia's problems in the country.
Acacia, which is not party to the talks, did say the government has warned it will not sign any resolution if Acacia is one of the counterparties to the agreements.
Barrick said: "It is now clear that the relationship of Acacia with the government of Tanzania has been so damaged by the events that led to the concentrate ban being imposed by Tanzania in March 2017 and by the subsequent arbitration proceedings initiated by Acacia against Tanzania, that it is no longer possible for Acacia to continue to function as an independent public company, with substantially all of its value represented by assets in Tanzania."
"Barrick has therefore proposed a solution which Barrick believes represents fair value for Acacia and is in the best interests of Acacia and its minority shareholders," the gold miner added.
Barrick said its proposal seeks to "preserve" the value of Acacia assets and give minority shareholders in the company the "ability to benefit from any potential upside" in the assets and Barrick's broader portfolio through ownership of Barrick shares.
"Barrick believes that unless a solution is found to the current impasse in the short term there is the real risk of catastrophic loss of value for all stakeholders, and that the solution it has proposed to the independent directors of Acacia represents the only credible option to preserve, to the extent possible, the value of Acacia's assets," Barrick added.
