ENDEAVOUR Mining has called off its planned merger with Acacia Mining providing little details, but saying it could not derive “adequate value” from initial discussions.
Sébastien de Montessus, president and CEO of Endeavour Mining, said the firm would press on with its organic growth projects which included the $328m Houndé project in West Africa’s Côte d’Ivoire.
“Endeavour Mining Corporation announced today that it has terminated discussions with Acacia Mining regarding a potential corporate transaction following the inability to reach an agreement that it believed would create adequate value for Endeavour’s shareholders,” the company said in an announcement.
The possibility of a combination between the two companies was first announced on January 13. Acacia, which announced a doubling in its dividend on February 14, operates exclusively in Tanzania.
Barrick Gold has a 63.9% stake in Acacia and is known to be an active seller of its investment. Certain South African firms have kicked the tyres at Acacia including Sibanye Gold and Harmony Gold.
Said De Montessus: “We will continue to maintain a disciplined approach to business development opportunities and only enter into transactions that we believe are aligned with our long-term strategic objectives and that create value for our shareholders”.
Bankrolled by Naguib Sawaris, the Egyptian billionaire, Endeavour is set to approve the $307m Ity project in Côte d’Ivoire this year which will have average gold production of 165,000 oz/year for the first five years.
First though, the firm is attempting to increase its ownership in the project from 55% to as much as 85% if shareholders – the government and former Chelsea footballer Didier Drogba – can be persuaded to sell their shares.
It was the reversal of this project, and some $60m in finance, into Endeavour through Sawaris’ La Mancha, a Canadian gold development firm, that gave Sawaris a 30% stake in Endeavour. It was soon after this that La Mancha’s MD, Sébastien de Montessus, a former AREVA executive, was appointed CEO, replacing Endeavour’s founding CEO, Neil Woodyer.
