9 Jul 2019 16:51
ACACIA MINING PLC - Competent Persons Report & PUSU ExtensionACACIA MINING PLC - Competent Persons Report & PUSU Extension
PR Newswire
London, July 9
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
9 July 2019
Acacia Mining plc
RELEASE OF COMPETENT PERSONS’ REPORT AND ACACIA AGREES TO BARRICK’S REQUEST FOR AN EXTENSION OF PUSU DEADLINE
Further to Acacia Mining plc's (“Acacia” or the “Company”) announcement on 24 June 2019, Acacia has today released a Competent Persons’ Report (“CPR”) prepared by SRK Consulting (UK) Limited (“SRK”) with a Preferred Value (as defined below) of 271 pence per Acacia share. Both the executive summary of the CPR and the full report can be found on the Company’s website as follows:
https://www.acaciamining.com/~/media/Files/A/Acacia/reports/2019/competent-persons-report-on-the-mineral-assets-of-acacia-mining-plc-executive-summary.pdf
https://www.acaciamining.com/~/media/Files/A/Acacia/reports/2019/competent-persons-report-on-the-mineral-assets-of-acacia-mining-plc-full-report.pdf.
SRK was appointed by Acacia to carry out a comprehensive review of its geological and resource modelling, preparation of its life of mine plans and resource and reserve statements and to present the results of this in the form of a CPR. As part of this CPR, SRK has also prepared an independent valuation of the Company (the “Independent Technical Valuation”) in compliance with Rule 29 of the Code.
The work undertaken by SRK has been ongoing for eight months and has included inter alia:
site visits to each of the Company’s operating mines; a review and assessment of all material technical assumptions included in the 2018 Mineral Resource and Ore Reserve statements, the life-of mine plans, the environmental and social liabilities and the Company’s other exploration assets; and all the validation and verification procedures deemed necessary and appropriate by SRK to place an appropriate level of reliance on such technical information provided by the Company, with the exception of the fiscal structure as reflected in the draft settlement agreements under discussion between Barrick Gold Corporation (“Barrick”) and the Government of Tanzania (the “GoT”), which SRK has included in its Independent Technical Valuation but not opined on the basis thereof.The SRK group is highly reputed and well respected within the mining sector and has been used by many mining companies to carry out similar technical assessments and reviews.
SRK’s comprehensive review and its advice to the Board of Acacia (the “Board”) concluded that the Company’s geological and resource modelling and processes which were used in formulating its life of mine plan scenarios and Resource and Reserve statements as reported in the CPR are robust.
The Independent Technical Valuation provided by SRK, comprises the following three valuation scenarios:
Preferred case valuation – incorporates Life-of-Mine plans based on (i) Ore Reserves and certain higher confidence Mineral Resources for Bulyanhulu and North Mara, and (ii) Ore Reserves only (the “Tier 1 LoM plan”) for Buzwagi, modified to include all necessary adjustments and modifications identified by SRK throughout its review process (the “Preferred Value”); High case valuation – is similar with regards to production in all material respects to the assumptions incorporated into the Preferred Value, but excludes various adjustments regarding operating expenditure incorporated in the Preferred and Low Value (the “High Value”); and Low case valuation – incorporates the Tier 1 LoM plans for Bulyanhulu, North Mara and Buzwagi as well as limited value for the Mineral Resources not included in the Tier 1 LoM plan (the “Low Value”).All three scenarios assume constant real commodity prices of US$1,300/oz for gold and long term prices of US$17.25/oz for silver and US$2.97/lb for copper, an 8.5% real discount rate, settlement with the GoT on terms in line with the framework documents agreed between Barrick and the GoT and announced in October 2017, and include a value of US$57 million (Preferred Value), US$87 million (High Value) and US$37 million (Low Value) for the Company’s exploration assets.
The Preferred and High Value scenarios, which support the Company’s life of mine plans, imply a valuation range of 271-281 pence per Acacia share (the “Valuation Range”).
The Low Value, which is considered highly conservative by the Company, implies value of 203 pence per Acacia share.
The Valuation Range excludes the Company’s Tier 3 and Tier 4 scenarios, which reflect further upside potential, as these are not considered sufficiently advanced to a minimum of pre-feasibility study level.
The Transaction Committee confirms that neither the CPR, nor the resulting implied equity value published today, include an estimate of the amount of any potential tax liability which would arise if Acacia’s assets were to be sold at the amount of the valuation.
For the purposes of Rule 29.6 (b) of the Code, the Transaction Committee confirms that an estimate of the potential tax liability that would arise if the assets were to be sold, cannot be provided as a result of the uncertainty associated with the ongoing discussions with the GoT. The Transaction Committee confirms that if the assets were to be sold tax liabilities in respect of transaction, corporate and capital gains taxes may arise.
PUSU Extension
In order to allow Barrick more time to review the CPR and facilitate further engagement with Acacia on the terms of the proposal, Barrick has requested that the Company seek an extension to the PUSU Deadline (as defined below).
The Board continues to believe that, subject to the price offered being fair and commanding the necessary support from shareholders, Barrick acquiring the remaining shares in Acacia it does not currently own would be an attractive solution for key stakeholders.
In order to further facilitate such discussions and further to the Company's announcement on 18 June that any firm intention to make an offer in accordance with Rule 2.7 of the Code would be subject to a deadline of 5.00pm on 9 July 2019 (the “PUSU Deadline”), the Board requested that the Panel on Takeovers and Mergers (the “Panel”) extend the PUSU Deadline. In light of this request, an extension has been granted by the Panel, and in accordance with Rule 2.6(a) of the Code, Barrick is required, by not later than 5.00pm on 19 July 2019, either to announce a firm intention to make an offer in accordance with Rule 2.7 of the Code or to announce that they do not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline may be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.
As stated consistently over the course of the last 2 years, Acacia’s preferred outcome remains the achievement of a negotiated settlement of its disputes with the GoT (howsoever negotiated or achieved), this being a settlement that would allow for the lifting of the export ban and resumption of full operations at Bulyanhulu, whilst continuing to operate at North Mara and Buzwagi in the ordinary course. Acacia’s desire for a negotiated settlement is part of the Company’s long-term commitment to support Tanzania, its people and the mining industry going forward. In this regard, in the event that the Transaction Committee of the Board were in a position to recommend, in due course, that the Acacia Minority Shareholders vote in favour of a Barrick offer, Acacia would seek to discuss appropriate steps for a stay of the arbitration with the GoT and the Arbitration Tribunal.
A further announcement will be made when appropriate.
ENQUIRIES
For further information, please visit our website: www.acaciamining.com or contact.
Acacia Mining plc +44 (0) 20 7129 7150
Sally Marshak, Head of Investor Relations and Communications +44 (0) 75 2580 7953
Camarco +44 (0) 20 3757 4980
Gordon Poole / Nick Hennis
J.P. Morgan Cazenove (Joint Lead Financial Adviser and Broker): +44 (0) 20 7742 4000
Barry Weir
James Robinson
Dimitri Reading-Picopoulos
RBC Capital Markets (Joint Lead Financial Adviser and Broker): +44 (0) 20 7653 4000
Kevin Smith
Paul Betts
Vicky Liu
Lazard & Co., Limited (Financial Adviser to the Transaction Committee of Acacia Mining plc):
Spiro Youakim +44 (0) 20 7187 2000
William Lawes
Gustavo Plenge
Further Information:
J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser exclusively for Acacia and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Acacia for providing the protections afforded to clients of J.P. Morgan Cazenove, nor for providing advice in relation to any matter referred to herein.
RBC Europe Limited (trading as RBC Capital Markets), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Acacia and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Acacia for providing the protections afforded to clients of RBC Capital Markets, or for providing advice in connection with the matters referred to in this announcement.
Lazard & Co., Limited (“Lazard”), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Transaction Committee of Acacia Mining plc and for no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than the Transaction Committee of Acacia Mining plc for providing the protections afforded to clients of Lazard nor for providing advice in relation to the matters referred to in this announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any statement contained herein or otherwise.
About ACACIA
Acacia Mining plc (LSE:ACA) is the UK holding company of the Acacia Group, Tanzania’s largest gold miner and one of the largest producers of gold in Africa. The Acacia Group has three mines, all located in north-west Tanzania: Bulyanhulu, which is owned and operated by Bulyanhulu Gold Mine Limited, Buzwagi, which is owned and operated by Pangea Minerals Limited and North Mara, which is owned and operated by North Mara Gold Mine Limited. The Acacia Group also has a portfolio of exploration projects in Kenya, Burkina Faso and Mali. Acacia Mining plc is a UK public company headquartered in London. It is listed on the Main Market of the London Stock Exchange with a secondary listing on the Dar es Salaam Stock Exchange. Barrick Gold Corporation is the majority shareholder of Acacia Mining plc.