THE buy-out of minority shareholders in Acacia Mining by New Barrick was “definitely one option”, said Mark Bristow, CEO of Randgold Resources.
“It’s not a bad option,” he said in an interview with Miningmx today following the publication of the UK-listed firm’s third quarter results in which it lifted profits a quarter on the back of improved gold production.
Bristow was also commenting a day before his company’s shareholders meet for an extraordinary general meeting, the main business of which is to approve a merger between Randgold and Barrick Gold to form New Barrick that Bristow will lead as CEO.
“It’s going ahead,” said Bristow of the likely outcome of the vote. But he was more cautious about the future for Acacia Resources in which Barrick Gold is the largest single shareholder with a 63.9% interest. The company is embroiled in a toxic dispute with the Government of Tanzania, primarily over allegations of unpaid tax, but which has now spilled over after Barrick Gold attempted to settle the dispute.
Last year, Barrick Gold offered to pay $300m to the Tanzanian government as a gesture of goodwill, but the amount has been left unpaid and it is thought the Tanzanians are impatient to have it paid. A number of Acacia employees have since been charged with corruption and retained in jail without bail.
Bloomberg News reported on October 24 that once New Barrick was formed, effective January 1 provided Randgold shareholders approve and court permission is granted, it would move to buy out Acacia minority shareholders, but Bristow said it required all parties to “come to the table”, including Acacia Mining’s independent committee.
The committee was formed to assess the merits of Barrick’s discussions with the Tanzanians, from which Acacia was excluded by the government. Said Bristow: “The independent committee is another of the stakeholders that needs to come to the party”. It had to recognise the value of New Barrick taking out Acacia, he said.
“You’ve got a very unfortunate situation where there’s a stand-off,” said Bristow of the dispute. “You have a board with an independent committee, a shareholder desperate to find an answer, and a government that has been left out of the cash flow. Everyone is talking past each other,” he said.
“Arbitration is not going to solve this,” he said of Acacia Mining’s representations to the International Court of Arbitration. “In this crisis – and it is a crisis – the only way to resolve it is to sit down and work it out.”
In comments that support his earlier statement that Acacia’s independent committee would have to compromise, he said a resolution would be about “… sharing the economic spoils” and recognising that the Tanzanian government “… has a say as an equity partner … It’s the importance of one paying the rent”.
“Tanzania has a broader-based mining industry than just gold and they [the government] has got a memory of successful capital solicitation,” he said.
“It has done very well in the past and the mining sector has not done as it should. That requires a level of honesty in order to rectify the past.”