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.
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
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
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.