SUMMARY
Introduction
The Boards of Barrick Gold Corporation
(“Barrick”) and Acacia Mining plc
(“Acacia”) are pleased to announce that they have
reached agreement on the terms of a recommended offer by Barrick
for the ordinary share capital of Acacia that Barrick does not
already own. It is intended that the Acquisition will be
implemented by means of a court-sanctioned scheme of arrangement
under Part 26 of the Companies Act (the
“Scheme”).
Under the terms of the Acquisition, each Scheme
Shareholder will receive:
For every Scheme Share: 0.168 New
Barrick Shares (the “Share for Share Exchange Ratio”) and any
Acacia Exploration Properties Special Dividends and any Deferred
Cash Consideration Dividends, as described below.
On the basis of the market closing price of a
Barrick Share on the NYSE on 18 July 2019 (being the last business
day before this Announcement), the exchange rate of US$1.2479:£1 on
that date and the total number of 410,085,499 Acacia Shares in
issue on that date, the terms of the Share for Share Exchange Ratio
imply a value of approximately 232 pence per Acacia Share, total
consideration of approximately £343 million ($428 million) for
Acacia minority shareholders and a total value of approximately
£951 million for Acacia.
On that basis, the terms of the Share for Share
Exchange Ratio represent:
- a premium of 53.5% to the closing price of 151 pence per Acacia
Share on 20 May 2019 (the last business day prior to the
announcement of a possible offer by Barrick for Acacia);
- a premium of 24.2% to the closing price of 187 pence per Acacia
Share on 18 July 2019 (the last business day before this
Announcement); and
- a premium of 28.2% to the volume-weighted average price per
Acacia Share over the twenty trading days ended on 18 July 2019
(the last business day before this Announcement).
In addition to the Share for Share Exchange
Ratio, under the terms of the Acquisition, Acacia Shareholders
(including Barrick or any other member of the Barrick Group) whose
names appear on the register of members of Acacia at the Scheme
Record Time (irrespective of whether or not they attended and voted
at the Court Meeting or the General Meeting (and if they attended
and voted, whether or not they voted in favour of the
Acquisition)), will be entitled to receive and retain the Acacia
Exploration Properties Special Dividends and any Deferred Cash
Consideration Dividends (if applicable) paid as a consequence of
the sales process to realise value from the sale of certain of the
Acacia Exploration Properties as described under “Sale of the Sale
Exploration Properties” below.
The Acacia Exploration Properties are Acacia’s
exploration assets located in the Republic of Tanzania, the
Republic of Kenya, the Republic of Mali and Burkina Faso, including
the Excluded Assets (being Acacia Group’s interests in the Nyanzaga
Gold Project in Tanzania and the South Houndé Project in Burkina
Faso), in respect of which sale processes have already been
commenced by Acacia and are well advanced. Value attributable to
the Excluded Assets of US$10 million has been reflected in the
increased exchange ratio reflected in the Share for Share Exchange
Ratio.
The independent technical value
(“ITV”) of the Acacia Exploration Properties set
out in the Competent Persons’ Report produced by SRK reflects an
attributable value range for the Acacia Exploration Properties of
US$37 million (Low Value) to US$87 million (High Value), with a
Preferred Value of US$57 million.
Included in the Preferred Value is an amount of
US$9 million which relates to the Excluded Assets. The value of the
Acacia Exploration Properties excluding the Excluded Assets (the
“Sale Exploration Properties”), as reported by
SRK, amounts to US$48 million (the “Exploration
Value”). Whilst the ITV attributed a value of US$9 million
to the Excluded Assets; since publication of the ITV the value has
increased to US$10 million as a result of the renegotiation of the
agreement in which there will be an increase in the upfront
payment, in lieu of the royalty, for the Nyanzaga Gold Project, as
reflected in the Share for Share Exchange Ratio.
Barrick and Acacia note that the value
of the Sale Exploration Properties included in the ITV is based on
a number of assumptions which may or may not be supported and there
can be no certainty or any assurance given by Barrick or Acacia
that any sale will occur, or in the event that a sale does occur,
that a realisation of such value will be achieved through a sale.
Scheme Shareholders should therefore not assume that the
Exploration Value will be achieved through the sale of the Sale
Exploration Properties and that Net Proceeds equivalent to the
Exploration Value will be payable to Acacia Shareholders as Acacia
Exploration Properties Special Dividends.
Barrick currently owns 262,246,950 Acacia
Shares, representing approximately 63.9 per cent of the issued
ordinary share capital of Acacia.
The terms of the Acquisition are final and
therefore, in accordance with the Code, Barrick will not be
permitted to increase the terms of the Acquisition.
Sale of the Sale Exploration
Properties
Under the terms of the Acquisition, Barrick has
agreed, for the benefit of all Acacia Shareholders, to undertake a
sales process to realise value for the Sale Exploration Properties,
whereby Barrick will, following a customary marketing process,
dispose of the Sale Exploration Properties in an arm’s length
transaction or series of transactions at the best cash price
reasonably obtainable by Barrick in the market at the time (a
“Sale” or “Sales”) during the
period of two years commencing on the Effective Date (the
“Sale Period”).
In view of Barrick’s 63.9 per cent shareholding
in Acacia, Barrick’s interests in the outcome of the sales process
to realise value for the Sale Exploration Properties are wholly
aligned with those of other Acacia Shareholders.
The Sale Exploration Properties may be sold by
Barrick on an individual or combined basis within the Sale Period.
Individual sales of the Sale Exploration Properties may take place
at different times within the Sale Period, but Barrick intends to
conclude the sales process in respect of the Sale Exploration
Properties on or before the end of the Sale Period. Further details
of the anticipated process for sale of the Sale Exploration
Properties and the arrangements that will be put in place will be
set out in the Scheme Document.
The Net Proceeds of any Sale or Sales will be
paid to Acacia Shareholders (including Barrick or any other member
of the Barrick Group) whose names appear on the register of members
of Acacia at the Scheme Record Time (irrespective of whether or not
they attended and voted at the Court Meeting or the General Meeting
(and if they attended and voted, whether or not they voted in
favour of the Acquisition)) on a pro rata basis by reference to
their existing holdings of Acacia Shares at that time by way of a
US Dollar cash payment payable on or before 31 December in the
relevant year such Sale or Sales are completed (the “Acacia
Exploration Properties Special Dividends”).
To the extent any Sale consummated prior to the
end of the Sale Period involves the payment of any escrow,
holdback, deferred cash consideration or similar following that
date (“Deferred Cash Consideration”), any Net
Deferred Cash Consideration will be paid to Acacia Shareholders
(including Barrick or any other member of the Barrick Group) whose
names appear on the register of members of Acacia at the Scheme
Record Time in the manner and on the basis described above (a
“Deferred Cash Consideration Dividend”). Deferred
Cash Consideration Dividends (if any) will be payable by Acacia
once such Deferred Cash Consideration is actually received in
cleared funds by Barrick or any Barrick subsidiary.
Barrick will make an announcement by no later
than 31 December each year until all Net Proceeds have been paid
and all Deferred Cash Consideration has been received, as to any
Sale Exploration Properties sold or Deferred Cash Consideration
received in the relevant year and the gross and Net Proceeds
attributable to such Sale or Sales and the amount of the Acacia
Exploration Properties Special Dividend and/or Deferred Cash
Consideration Dividend paid or payable to Acacia Shareholders as a
result.
No statements made in this paragraph constitute
“post-offer undertakings” for the purposes of Rule 19.5 of the
Code.
Background to and reasons for the
Acquisition
Disputes with the Government of Tanzania
The business and operations of Acacia have been
materially affected by the ongoing disputes with the Government of
Tanzania (“GoT”). In March 2017, the GoT announced
a ban on the export of metallic mineral concentrates (the
“Export Ban”) and, as a consequence, in the second
half of 2017, Acacia took the decision to place the Bulyanhulu mine
on reduced operations. The Export Ban remains in effect.
In addition, there are numerous ongoing
unresolved disputes between the GoT and Acacia Group companies,
including disputes in relation to tax, environmental and criminal
matters. In October 2018, one of Acacia’s employees in Tanzania,
was charged by the Tanzanian Prevention and Combating of Corruption
Bureau (“PCCB”) with an offence under the
Tanzanian Prevention and Combating of Corruption Act. The PCCB also
charged two current and one former employee of Acacia’s Tanzanian
businesses, together with Bulyanhulu Gold Mine Limited
(“BGML”) and Pangea Minerals Limited
(“PML”) and North Mara Gold Mine Limited
(“NMGML”) and a third party Canadian entity,
Explorations Miniers du Nord Ltd., this being the former joint
venture partner for the Tulawaka mine, with a number of different
offences, including breaches of the Tanzanian Anti-Money Laundering
Act. A total of 39 charges were brought. Acacia and Barrick remain
deeply concerned regarding the ongoing risks to these individuals,
who still remain in custody on criminal charges for a range of
allegations without committal for trial or access to bail.
Acacia continues to favour a negotiated
resolution to the Company’s disputes with the GoT but, as a fall
back, the Acacia Group sought to protect the Company’s business
through the contractual arbitration proceedings commenced in 2017
by Acacia’s subsidiaries, BGML and PML.
GoT Arrangements
Barrick and Acacia both believe that a
negotiated settlement of Acacia’s disputes with the GoT is
necessary. Barrick, the Company’s majority shareholder, has been in
discussions with the GoT in an effort to identify and document a
solution to the Company’s disputes which would include a lifting of
the Export Ban and settlement of all other outstanding disputes.
Acacia has co-operated and provided assistance to Barrick in
relation to the discussions with the GoT.
On 19 October 2017, Barrick and the GoT signed a
set of framework documents which envisaged a US$300 million
settlement payment and subsequent 50/50 sharing of economic
benefits between Acacia and the GoT. As Acacia was not permitted to
participate in the discussion, Acacia was not a party to the
framework documents and was not involved in negotiating the terms
included therein. There followed a lengthy period of time during
which Barrick and the GoT were discussing a set of agreements to
implement the framework documents.
In the course of May 2019, Barrick’s
negotiations with the GoT advanced to the point where draft
Transaction Documents for a possible settlement had been
extensively negotiated and initialled by the GoT, albeit with a
number of substantive issues still outstanding. The key principle
of the draft Transaction Documents under discussion is that going
forward the GoT and Acacia’s Tanzanian mine operating subsidiaries
(the “TMCs”) will share the economic benefits
derived from the Tanzanian mines on a 50/50 basis, based on the
life of mine plans of the TMCs. The GoT will receive its share of
economic benefits through taxes, royalties, fees and other fiscal
levies and through the GoT’s 16% free carried interest in all
distributions (including shareholder loan repayments) from the TMCs
and a new Tanzanian management company. The 50/50 sharing
arrangement will be reviewed annually to ensure that the actual and
projected sharing of economic benefits is in accordance with the
50/50 principle. The draft Transaction Documents also provide for
payment by the Acacia Group of an aggregate sum of US$300 million
in consideration for the full, final and comprehensive settlement
of all existing disputes between the GoT and the Acacia Group,
including all liability to taxation and a waiver of actual or
potential claims on a mutual basis. This US$300 million payment is
outside of (and therefore not taken into account for the purposes
of) the 50/50 sharing of the economic benefits over time. The
settlement envisaged by the draft Transaction Documents involves a
significant value transfer from Acacia to the GoT, but this has
been critical to agreeing draft settlement terms with the GoT and
creating a viable operating framework for the TMCs going forward. A
summary of the material terms of the current draft Transaction
Documents under discussion is set out in Appendix 4.
Recent Developments
On 21 May 2019, Barrick informed Acacia that it
had made significant progress towards finalising a proposed
resolution to the disputes between the GoT and Acacia and provided
the Transaction Documents to Acacia, noting their status. On the
same date Barrick also provided Acacia with a letter dated 19 May
2019 from the Acting Chairman of the GoT negotiating team, and
addressed to each of the TMCs. This letter (the “GoT
Negotiating Team Letter”) states that the GoT will not
execute final agreements for the resolution of the Company’s
disputes if Acacia is one of the counterparties to the agreements
and that it will only sign such agreements “if satisfied that
substantial changes have been made to the management style of the
Operating Companies and of their shareholders”. Acacia immediately
reached out to the most senior levels in the GoT to seek clarity on
the letter received and to date has received no response.
On 12 July 2019, Acacia announced that its North
Mara mine had received a letter (the “No
Export Letter”) from the Mining Commission of the
Tanzanian Ministry of Minerals informing it that the Mining
Commission is soon to conduct an inspection of North Mara’s gold
production. The No Export Letter stated that export permits for
gold shipments from North Mara would be issued following completion
of this inspection. Until such time as Acacia receives permits for
gold shipments the Company cannot sell its product and production
will accrue to inventory. The Company anticipates that under a
normal production schedule it could operate for approximately one
further week before running out of storage capacity. Acacia is
seeking clarification of the timing for completion of the
inspection.
On 16 July 2019, the National Environment
Management Council (“NEMC”) issued NMGML with a
prohibition notice (the “Prohibition Notice”)
which orders the North Mara mine to stop use of its tailings
storage facility (the “TSF”) by 6.00 a.m. local
time on 20 July 2019. The NEMC cited the North Mara mine’s failure
to contain and prevent seepage from the TSF as grounds for its
issuance of the Prohibition Notice. The Prohibition Notice stated
that it shall remain effective until such time that NEMC were to be
satisfied that the North Mara mine has taken measures to contain
seepage from the TSF. Acacia is seeking clarification of the
Prohibition Notice. The effect of the North Mara mine having to
stop using the TSF would be the immediate cessation of gold
production, and in time, if the prohibition is not lifted,
cessation of mining operations at North Mara.
Transaction Committee observations on current
status of operations
The Transaction Committee acknowledges that the
GoT Negotiating Team Letter represented a material development in
respect of Acacia’s status with the GoT. Shortly following the GoT
Negotiating Team Letter, an official spokesman of the GoT
confirmed, in a press conference, their position that they would
not deal with Acacia going forward. Furthermore Acacia’s local
staff have engaged with their counterparts in government who have
again confirmed that the GoT will not engage with Acacia for the
purposes of agreeing a settlement. As things stand therefore, there
is a serious question as to whether Acacia’s entry into the
Transaction Documents and the building of a long-term partnership
with the GoT on which the future for the business envisaged in the
Transaction Documents necessarily relies, are a realisable
alternative for Acacia as an independent company.
Whilst Acacia has continued to operate its
assets and achieve significant production despite the deteriorating
operating environment following the Export Ban, the Transaction
Committee views the No Export Letter and Prohibition Notice as a
further material deterioration in the operating environment. In
particular the No Export Letter and the Prohibition Notice will
restrict the ability of Acacia to operate at North Mara until such
time as the Company receives export permits and the prohibition is
lifted on use of the TSF.
Considering the impending loss of the ability of
Acacia to produce gold and operate the mine at North Mara, the
Acacia Group’s cash flow from operations will be adversely impacted
and the Acacia Group will be required to meet its on-going working
capital requirements and other financial obligations from its
existing cash balance. This position is not sustainable and the
liquidity of the Company will be constrained in the absence of a
resolution.
In the absence of a settlement of its disputes
with the GoT the Transaction Committee remain concerned about the
potential for the operating environment for the Acacia Group to
further deteriorate. Further actions from the GoT have the
potential to negatively affect the sustainability of the Acacia
Group’s business and present risks to Acacia’s employees and other
stakeholders.
The Acacia Group has, to date, and only as a
fall-back option, sought to protect its assets via the arbitration
proceedings commenced in July 2017. As the Transaction
Committee has previously disclosed, however, there are significant
collateral risks in PML and BGML continuing to seek to protect
their businesses through maintaining the arbitrations pending a
negotiated resolution. Accordingly, as announced on 17 July 2019,
PML and BGML have now sought a stay of those proceedings in the
light of increasing risks and to allow more time for a negotiated
resolution. The Transaction Committee has also concluded that the
value to Scheme Shareholders of the Acacia Group pursuing these
arbitration proceedings in the future does not exceed the value of
the Consideration.
As further explained in the section headed
“Acacia Recommendation and Irrevocable Undertakings” below, in
light of this background and current circumstances, the Transaction
Committee, having considered, amongst other factors, the financial
terms of the Scheme, believes that the Acquisition is a fair
outcome for the Scheme Shareholders. It is also an attractive
solution for the Company’s other key stakeholders, as it may enable
Barrick to finalise the terms of a settlement with the GoT, thereby
resolving the long-running disputes and potentially allowing the
Acacia Group’s Tanzanian business, and its employees in Tanzania,
who have provided exceptional and unstinting support in continuing
operations in country, to return to a normalised operating
environment.
Background to the Acquisition
It is against the background of the GoT's
position as highlighted above that Barrick concluded that the only
way forward to preserve, to the extent possible, the value of
Acacia’s assets was for Barrick to make an offer to acquire all of
the Acacia Shares not already owned by it and on 21 May 2019,
Barrick presented Acacia with an indicative proposal to acquire all
the issued and to be issued share capital of Acacia not already
owned or controlled by Barrick. The consideration originally
proposed by Barrick was in the form of new common shares in
Barrick, with Scheme Shareholders receiving 0.153 of a new common
share of Barrick for every ordinary share in Acacia (the
“Possible Offer”). Acacia’s announcement
confirming Barrick’s indicative proposal stated that any firm
intention to make an offer in accordance with Rule 2.7 of the Code
would be subject to a deadline of 5.00 p.m. on 18 June 2019 (the
“First PUSU Deadline”).
On 18 June 2019, Acacia announced that Barrick
had requested that Acacia seek an extension to the First PUSU
Deadline in order to facilitate further engagement with Acacia and
its minority shareholders. In order to provide further time to
determine a proposal that might receive sufficient shareholder
support, the Acacia Board requested that the Panel extend the First
PUSU Deadline and, in light of this request, an extension was
granted by the Panel to 5.00 p.m. on 9 July 2019 (the
“Second PUSU Deadline”).
On 24 June 2019, Acacia announced that in 2018
it had engaged SRK, an independent technical consultancy, to carry
out a comprehensive review of its geological and resource modelling
and preparation of its life of mine plans and mineral resource and
mineral reserve statements. SRK presented the results of this
review in the form of a Competent Persons’ Report which was
effective on 30 June 2019 and published by Acacia on 9 July 2019.
The Transaction Committee Directors confirm that SRK have confirmed
that an updated valuation of Acacia’s assets as at the date of this
announcement would not be materially different from the valuation
thereof contained in the Competent Persons’ Report. The Competent
Persons’ Report and an executive summary thereof can be found on
Acacia’s website as follows:
https://www.acaciamining.com/media/press-releases/2019/2019-07-09.aspx.
On 9 July 2019, Acacia also announced that
Barrick had requested that Acacia seek an extension to the Second
PUSU Deadline in order to allow Barrick more time to review the
Competent Persons’ Report and facilitate further engagement with
Acacia on the terms of the proposal. In order to further facilitate
such discussions, the Acacia Board requested that the Panel extend
the Second PUSU Deadline and, in light of this request, an
extension was granted by the Panel to 5.00 p.m. on 19 July
2019.
Acacia has subsequently engaged with Barrick on
the contents of the Competent Persons’ Report and other matters
relating to the terms of the Possible Offer. Following these
discussions, Barrick informed the Transaction Committee that, while
constructive, the discussions with SRK and Acacia, and Barrick’s
detailed review of the Competent Persons’ Report, did not result in
Barrick attributing greater value to Acacia’s operating mines than
taken into account in connection with its Possible Offer. Barrick
has informed the Transaction Committee that the discussion did,
however, lead it to conclude that it was in a position to revise
its proposal to take into account two additional value items
unrelated to Acacia’s operating mines as noted below.
Barrick’s revised proposal
Barrick’s Possible Offer did not attribute any
value to the Acacia Exploration Properties. The Competent Persons’
Report ascribed an ITV to the Acacia Exploration Properties ranging
from US$37 million (Low Value) to US$87 million (High Value), with
a Preferred Value of US$57 million. Barrick has agreed with Acacia
(i) to improve the exchange ratio upon which Scheme Shares will be
exchanged for Barrick Shares to reflect US$10 million in respect of
the disposal by Acacia of the Excluded Assets, and (ii) to
undertake a sales process (for the benefit of all Acacia
Shareholders) to realise value for the Sale Exploration Properties,
with the Net Proceeds of any Sale or Sales being paid to all Acacia
Shareholders by way of Acacia Exploration Properties Special
Dividends.
In addition, Barrick has agreed to further
improve the exchange ratio upon which Scheme Shares will be
exchanged for Barrick Shares to reflect general and administrative
expense savings expected to be realised following the Effective
Date through the office closures and personnel reductions referred
to under the section headed “Directors, management and employees
and locations of business” below.
The Transaction Committee has considered the
terms of the Acacia Exploration Properties Special Dividends and
any Deferred Cash Consideration Dividends. The Transaction
Committee notes that the Competent Persons’ Report attributes a
value of US$48 million to the Sale Exploration Properties. However,
the Transaction Committee notes that there is no certainty around
the outcome of any sales process and therefore the cash amount that
may be realised from the disposal of the Sale Exploration
Properties may be materially lower (or higher) and have taken this
into account in assessing the value of the Consideration.
In considering the merits of these terms, the
Transaction Committee has also taken the following into
account:
- The terms of the Transaction Documents as summarised in
Appendix 4 to this Announcement and their likely impact on the
operations, future financial results and prospects for Acacia,
based on the management’s long-term business plan for the Acacia
Group’s mines (while acknowledging at the same time that it is not
known what the final terms of such settlement may comprise)
- The recent and continuing deterioration of the operating
environment, as exemplified by the No Export Letter and Prohibition
Notice
- The urgent need to create certainty and stability for Acacia,
its people and the communities in which it operates, which the
Transaction Committee believes is more likely to happen under the
full ownership and control of Barrick given the current attitude of
the GoT towards Acacia
- The statement in the GoT's Negotiating Team Letter as to the
inability of Acacia to enter into the Transaction Documents and the
significant uncertainty as to the ability of Acacia to build a long
term partnership with the GoT
- The risks and uncertainties associated with the fall-back
alternative of continuing with the outstanding arbitration, as
described above
- The Transaction Committee has also concluded that the value to
Scheme Shareholders of the Acacia Group pursuing these arbitration
proceedings in the future does not exceed the value of the
Consideration
- The certainty created for Scheme Shareholders to receive the
Consideration if the Acquisition were to proceed
- The apparent lack of alternative buyers of Acacia or any of its
Tanzanian assets at this time of great uncertainty for the
Company
- The significant risks that Barrick is assuming given that it
has not yet reached a final agreement with the GoT on the
Transaction Documents.
Acacia Recommendation and Irrevocable
Undertakings
The Transaction Committee Directors, who have
been so advised by J.P. Morgan Cazenove and RBC Capital Markets as
to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing their
advice, J.P. Morgan Cazenove and RBC Capital Markets have taken
into account the commercial assessments of the Transaction
Committee Directors.
Accordingly, the Transaction Committee Directors
have unanimously approved the Acquisition and intend to recommend
that the Scheme Shareholders vote in favour of the Scheme at the
Court Meeting and the resolutions to be proposed at the General
Meeting, as Rachel English and Andre Falzon, the only members of
the Board who hold any Acacia Shares, have irrevocably undertaken
to do in respect of their own Acacia Shares (representing
approximately 0.01 per cent. of the issued ordinary share capital
of Acacia). Further details of these irrevocable undertakings
are set out in Appendix 3.
The irrevocable undertakings will cease to be
binding only if one of the events set out in Appendix 3 takes
place.
In addition, Lazard & Co., Limited is
providing independent financial advice to the Transaction Committee
Directors, in providing such advice Lazard & Co., Limited has
relied upon the commercial assessments of the Transaction Committee
Directors.
Transaction Committee
Stephen Galbraith, who is both a non-executive
director of Acacia and an employee of Barrick, has played no part
in the consideration by the Transaction Committee Directors of the
Acquisition, the recommendation of it by the Transaction Committee
Directors or the discussions between Barrick and the GoT.
General
It is intended that the Acquisition will be
implemented by means of a court-sanctioned scheme of arrangement
under Part 26 of the Companies Act.
The Acquisition will be conditional on, among
other things: (i) the requisite approvals of the Scheme
Shareholders for the Scheme and the Acquisition at the Court
Meeting and of Acacia Shareholders at the General Meeting; (ii)
relevant regulatory clearances being received and other conditions
satisfied; and (iii) the Court sanctioning the Scheme and the
Acquisition becoming effective, no later than the Longstop
Date.
It is expected that the Scheme Document,
containing further information about the Acquisition and notices of
the Court Meeting and General Meeting, together with the Forms of
Proxy, will be mailed to Acacia Shareholders and (for information
only) the participants in the Acacia Share Plans as soon as
practicable, and in any event, within 28 days of the date of this
Announcement (unless the Panel agrees otherwise).
The Scheme is expected to become effective
during Q4 2019, subject to the satisfaction or waiver of all
relevant conditions.
This summary should be read in
conjunction with, and is subject to, the full text of the following
announcement (including its Appendices). The Acquisition will
be subject to the Conditions and certain further terms set out
in Appendix 1 and to the
full terms and conditions to be set out in the Scheme Document.
Appendix 2 contains the
sources and bases of certain information contained in this summary
and the following announcement. Appendix
3 contains details of the irrevocable undertakings
received by Barrick. Appendix
4 contains a summary of the material terms of the
current draft documentation under discussion (but not yet
finalised) with the GoT. Appendix 5
contains the definitions of certain terms used in this
summary and the following announcement.
Enquiries
Barrick |
|
|
Kathy du PlessisInvestor and
Media Relations Telephone: +44 20 7557 7738Email:
barrick@dpapr.com |
|
|
Rothschild & Co (Financial Adviser to
Barrick) |
Hugo Dryland |
Telephone: +1 202 862
1660 |
|
Karina Danilyuk |
Telephone: +1 202 862
1660 |
|
Roger Ewart Smith |
Telephone: +44 20
7280 5000 |
|
Acacia |
Telephone: +44 (0) 20
7129 7150 |
|
Sally MarshakHead of Investor
Relations and Communications |
Telephone: +44
(0) 752 580 7953 |
|
Camarco |
Telephone: +44 (0) 20
3757 4980 |
|
|
|
|
Gordon Poole/Nick Hennis |
|
|
|
|
|
J.P. Morgan Cazenove (Joint Financial Adviser and Broker to
Acacia) |
Barry Weir |
Telephone: +44 (0) 20
7742 4000 |
|
James Robinson |
Telephone: +44 (0) 20
7742 4000 |
|
Dimitri Reading-Picopoulos |
Telephone: +44 (0) 20
7742 4000 |
|
RBC Capital
Markets (Joint Financial Adviser and Broker to Acacia)
|
Kevin Smith |
Telephone: +44 (0) 20
7653 4000 |
|
Paul Betts |
Telephone: +44 (0) 20
7653 4000 |
|
Vicky Liu |
Telephone: +44 (0) 20
7653 4000 |
|
Lazard & Co., Limited (Financial Adviser to the
Transaction Committee of Acacia) |
Spiro Youakim |
Telephone: +44 (0) 20
7187 2000 |
|
William Lawes |
Telephone: +44 (0) 20
7187 2000 |
|
Gustavo Plenge |
Telephone: +44 (0) 20
7187 2000 |
|
Norton Rose Fulbright LLP are retained as legal
advisers for Barrick.
Shearman & Sterling (London) LLP are
retained as legal advisers for Acacia.
Further information
This Announcement is for information purposes
only and is not intended to and does not constitute, or form part
of, an offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Acquisition or
otherwise, nor shall there be any sale, issuance or transfer of
securities of Acacia in any jurisdiction in contravention of
applicable law. Subject to the right of Barrick, with the
consent of the Panel, to implement the Acquisition by way of a
Takeover Offer, the Acquisition will be implemented solely by means
of the Scheme Document, which will contain the full terms and
conditions of the Acquisition including details of how to vote in
respect of the Scheme. Any vote in respect of the Scheme or
other responses in relation to the Acquisition, should be made only
on the basis of the information contained in the Scheme
Document.
Please be aware that addresses, electronic
addresses and certain other information provided by Acacia
Shareholders, persons with information rights and other relevant
persons for the receipt of communications from Acacia may be
provided to Barrick during the offer period as required under
Section 4 of Appendix 4 of the Code to comply with Rule
2.11(c).
Rothschild & Co, which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively
as financial adviser to Barrick and no one else in connection with
the Acquisition, this Announcement and the matters described
herein, and shall not be responsible to anyone other than Barrick
for providing the protections afforded to clients of Rothschild
& Co or for providing advice in connection with the
Acquisition, this Announcement or any matter referred to
herein. Neither Rothschild & Co nor any of its
subsidiaries, branches or 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 Rothschild & Co in connection
with the Acquisition, this Announcement or any matter referred to
herein.
J.P. Morgan Securities plc, which conducts its
United Kingdom investment banking business as J.P. Morgan Cazenove
(“J.P. Morgan Cazenove”), is authorised in the United Kingdom by
the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential
Regulation 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 set out 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 in this Announcement.
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 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 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.
Overseas jurisdictions
The release, publication or distribution of this
Announcement in or into jurisdictions other than Canada, the United
States and the United Kingdom may be restricted by law and
therefore any persons who are subject to the law of any
jurisdiction other than Canada, the United States and the United
Kingdom should inform themselves about, and observe, any applicable
legal or regulatory requirements. In particular the ability
of persons who are not citizens of and resident in Canada, the
United States or the United Kingdom or who are subject to the laws
of another jurisdiction, to vote their Acacia Shares with respect
to the Scheme at the Court Meeting, or to appoint another person as
proxy to vote at the Court Meeting on their behalf, may be affected
by the laws of the relevant jurisdictions in which they are located
or of which they are citizens. Any failure to comply with the
applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. Relevant clearances
have not been, and will not be, obtained from the securities
commission or similar regulatory authority of any province or
territory of Canada. To the fullest extent permitted by
applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person. This
Announcement has been prepared for the purposes of complying with
applicable English law, certain applicable securities law in Canada
and the United States, the Listing Rules, the rules of the London
Stock Exchange and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside of the UK.
Copies of this Announcement and formal
documentation relating to the Acquisition will not be and must not
be, mailed or otherwise forwarded, distributed or sent in, into or
from any Restricted Jurisdiction or any jurisdiction where to do so
would violate the laws of that jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. Doing so may render
invalid any related purported vote in respect of the Acquisition.
Each Acacia Shareholder is urged to consult their independent
advisers regarding the legal, tax and financial consequences of the
Acquisition. If the Acquisition is implemented by way of a Takeover
Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made, directly or
indirectly, in or into or by use of the mails or any other means or
instrumentality (including, without limitation, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of any Restricted Jurisdiction and the Takeover
Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Overseas
Shareholders will be contained in the Scheme Document and Acacia
Shareholders are advised to read carefully the Scheme Document and
related Forms of Proxy once these have been mailed.
Additional information for US
investors
The Acquisition is being made to acquire the
securities of a UK company by means of a scheme of arrangement
provided for under English company law. Any securities issued
as a result of this Acquisition by means of a scheme of arrangement
will be issued in reliance upon the exemption from the registration
requirements of the US Securities Act of 1933 set forth in Section
3(a)(10) thereof, and will not be subject to the proxy solicitation
and tender offer rules promulgated under the US Securities Exchange
Act of 1934. Accordingly, the Scheme will be subject to
disclosure requirements and practices applicable in the UK to
schemes of arrangement, which are different from the disclosure
requirements of the US federal securities laws. Except in
relation to non-GAAP financial performance measures, the financial
information included in this Announcement and the Scheme
documentation has been or will have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) and thus
may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US (“US
GAAP”). If Barrick exercises its right to implement the
acquisition of the Acacia Shares by way of a Takeover Offer, such
offer will be made in compliance with applicable US laws and
regulations, including the registration requirements of the US
Securities Act of 1933 and the tender offer rules under the US
Securities Exchange Act of 1934.
Barrick’s and Acacia’s mineral reserves and
mineral resources have been estimated in accordance with National
Instrument 43-101 – Standards of Disclosure for Mineral Projects,
as required by Canadian securities regulatory authorities.
For United States reporting purposes, Industry Guide 7 (under the
US Securities Exchange Act of 1934), as interpreted by the Staff of
the SEC, applies different standards in order to classify
mineralization as a reserve. In addition, while the terms
“measured,” “indicated” and “inferred” mineral resources are
required pursuant to National Instrument 43-101 – Standards of
Disclosure for Mineral Projects, the SEC does not recognize such
terms. Canadian standards differ significantly from the
requirements of the SEC, and mineral resource information contained
herein and in the documents incorporated herein by reference is not
comparable to similar information regarding mineral reserves
disclosed in accordance with the requirements of the SEC. However,
for United States reporting purposes, the SEC has adopted
amendments to its disclosure rules to modernize the mineral
property disclosure requirements for issuers whose securities are
registered with the SEC under the U.S. Securities Exchange Act
of 1934, which amendments became effective
February 25, 2019 with compliance required for the first
fiscal year beginning on or after January 1, 2021. The SEC’s
rule amendments replace the historical property disclosure
requirements for mining registrants that were included in Industry
Guide 7 and recognize estimates of “measured mineral
resources”, “indicated mineral resources” and “Inferred Mineral
Resources”. In addition, the SEC has amended its definitions of
“proven mineral reserves” and “probable mineral reserves” to be
“substantially similar” to the corresponding definitions required
in National Instrument 43-101. Investors should understand
that “inferred” mineral resources have a great amount of
uncertainty as to their existence and as to their economic and
legal feasibility. In addition, investors are cautioned not
to assume that any part or all of any mineral resources constitute
or will be converted into reserves. Accordingly, information
contained in this Announcement and in the documents incorporated by
reference herein containing descriptions of Barrick’s and Acacia’s
mineral deposits may not be comparable to similar information made
public by United States companies subject to the reporting
requirements of United States federal securities laws and the rules
and regulations thereunder.
US Holders of Acacia Shares also should be aware
that the transaction contemplated herein may have tax consequences
under the United States tax laws and, that such consequences, if
any, are not described herein. US Holders are urged to
consult with independent professional advisors regarding the legal,
tax and financial consequences of the Acquisition applicable to
them.
It may be difficult for US Holders to enforce
their rights and claims arising out of the US federal securities
laws, since Barrick and Acacia are located in countries other than
the US, and some or all of their officers and directors may be
residents of countries other than the US. US Holders may not
be able to sue a non-US company or its officers or directors in a
non US court for violations of US securities laws. Further,
it may be difficult to compel a non-US company and its affiliates
to subject themselves to a US court’s judgment.
In accordance with normal UK practice, Barrick
or its nominees, or its brokers (acting as agents), may from time
to time make certain purchases of, or arrangements to purchase,
Acacia Shares, other than pursuant to the Acquisition, until the
date on which the Acquisition and/or Scheme becomes effective,
lapses or is otherwise withdrawn. These purchases may occur
either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the UK, will be reported
to a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com.
Additional information for Canadian
investors
The enforcement by Canadian Holders of civil
liabilities under the Canadian securities laws may be affected
adversely by the fact that Acacia is incorporated or organized
under the laws of a jurisdiction other than Canada, that some or
all of Barrick’s and Acacia’s officers and directors are and will
be residents of countries other than Canada, that some or all of
the experts named in this Announcement may be residents of
countries other than Canada, and that all or a substantial portion
of the assets of Barrick, Acacia and such persons are and will be
located outside Canada. As a result, it may be difficult or
impossible for Canadian Holders to effect service of process within
Canada upon Acacia, Barrick’s and Acacia’s respective officers or
directors or the experts named herein, or to realize against them,
upon judgements of the court of Canada predicated upon liabilities
under Canadian securities laws. In addition, Canadian Holders
should not assume that the courts of England and Wales: (a) would
enforce judgments of Canadian courts obtained in actions against
such persons predicated upon civil liabilities under Canadian
securities laws; or (b) would enforce, in original actions,
liabilities against such persons predicated upon civil liabilities
under the Canadian securities laws.
The distribution of the New Barrick Shares
pursuant to the Acquisition will constitute a distribution of
securities that is exempt from the prospectus requirements of
Canadian securities law and is exempt from or otherwise is not
subject to the registration requirements under applicable
securities law. The New Barrick Shares received pursuant to
the Acquisition will not be legended and may be resold through
registered dealers in each of the provinces and territories of
Canada provided that (i) the trade is not a “control distribution”
as defined in Canadian securities law, (ii) no unusual effort is
made to prepare the market or to create a demand for Barrick
Shares, (iii) no extraordinary commission or consideration is paid
to a person in respect of such sale, and (iv) if the selling
security holder is an insider or officer of Barrick, as the case
may be, the selling security holder has no reasonable grounds to
believe that Barrick is in default of applicable Canadian
securities law.
Canadian Holders should be aware that the
Acquisition described in this Announcement may have tax
consequences in Canada and should consult their own tax advisors to
determine the particular tax consequences to them of the
Acquisition in light of their particular circumstances, as well as
any tax consequences that may arise under the laws of any other
relevant foreign, state, local or other taxing jurisdiction.
Cautionary statement on forward-looking
statements
This Announcement (including information
incorporated by reference in this Announcement) contains statements
which are, or may be deemed to be, “forward-looking
statements”. Forward-looking statements are prospective in
nature and are not based on historical facts, but rather on current
expectations and projections of the management of Barrick and
Acacia about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially
from the future results expressed or implied by the forward-looking
statements. The forward-looking statements contained in this
Announcement include statements relating to: (i) the expected
effects of the Acquisition on Barrick and Acacia including with
respect to future growth, results of operations, performance,
business prospects and opportunities of Barrick and Acacia; (ii)
the expected timing and scope of the Acquisition; (iii) the
integration of Acacia’s business with the existing operations of
Barrick; (iv) the impact of the Acquisition on the financial
position of Barrick and Acacia; (v) the expected terms and timings
of any agreement which may be reached with the Government of
Tanzania, including in connection with the settlement of disputes
between the Acacia Group and the Government of Tanzania, and the
application of Tanzanian Laws and regulations to the members and
operations of the Acacia Group in Tanzania (including as regards
the taxation of such members and operations) and the terms of
mineral development agreements and other contracts between members
of the Acacia Group and the Government of Tanzania; (vi) and the
outlook for Barrick’s and Acacia’s respective businesses and the
gold mining industry generally based on information currently
available and (vii) other statements other than current or
historical facts. These expectations may not be appropriate
for other purposes. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words
such as “plans”, “expects” or “does not expect”, “is expected”, “is
subject to”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “implies”, “possible”, “proposes”, “seeks”, “
anticipates” or “does not anticipate”, or “believes”, or variations
of such words and phrases or statements that certain actions,
events or results “may”, “could”, “should”, “can”, “would”, “might”
or “will” be taken, occur or be achieved. Although Barrick
and Acacia believe that the expectations in relation to their
respective businesses reflected in such forward-looking statements
are reasonable in light of management’s experience and perception
of current conditions and expected developments, neither Barrick
nor Acacia can give any assurance that such expectations will prove
to be correct as they are inherently subject to significant
business, economic and competitive uncertainties and
contingencies. By their nature, forward-looking statements
involve risk and uncertainty because they are based upon a number
of estimates and assumptions and they relate to events and depend
on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by such
forward-looking statements. These factors include the
satisfaction of the Conditions and the ability to consummate the
Acquisition; the anticipated timing for completion; future
post-Acquisition plans, business prospects and performance, growth
potential, financial strength, market profile, revenues, working
capital, capital expenditures, investment valuations, income,
margins, access to capital and overall strategy; the ability to
agree definitive terms of the mineral development agreements and
other contracts between members of the Acacia Group and the
Government of Tanzania and the satisfaction of any conditions to
completion of such agreements and other contracts; expectations
regarding the receipt of any necessary regulatory and third party
approvals and the expiration of all relevant waiting periods; the
anticipated benefits of the Acquisition; the anticipated mineral
reserves of Barrick following completion of the Acquisition;
expenses of the Acquisition; as well as additional factors, such
as: risks relating to the Acacia Group’s credit rating; local and
global political and economic conditions; the Acacia Group’s
economic model and liquidity risks; fluctuations in the spot and
forward price of gold, copper, or certain other commodities (such
as silver, diesel fuel, natural gas, and electricity);the
speculative nature of mineral exploitation and development;
financial services risk; the risks associated with Acacia’s brand,
reputation and trust; environmental risks; safety and technology
risks; changes in the financial markets; the potential impact of
the announcement or consummation of the Acquisition on
relationships, including with employees, suppliers, customers and
competitors; changes in mineral production performance,
exploitation, and exploration successes; diminishing quantities or
grades of reserve; risks that exploration data may be incomplete
and considerable additional work may be required to complete future
evaluation, including but not limited to drilling, engineering and
socioeconomic studies and investment; risk of loss due to acts of
war, terrorism, sabotage and civil disturbances; increased costs,
delays, suspensions and technical challenges associated with
construction of capital project; the duration of the Tanzanian ban
on mineral concentrate exports; the ultimate terms of any
definitive agreement to resolve the dispute relating to the
imposition of the concentrate export ban and allegations by the
Government of Tanzania that Acacia under-declared the mineral
content of concentrate exports from Tanzania and other related
matters; operating or technical difficulties in connection with
mining or development activities, including geotechnical challenges
and disruptions in the maintenance or provision of required
infrastructure and information technology systems; failure to
comply with environmental and health and safety laws and
regulations; timing of receipt of, or failure to comply with,
necessary notices, concessions, permits and approvals; the impact
of global liquidity and credit availability on the timing of cash
flows and the values of assets and liabilities based on projected
future cash flows; adverse changes in our credit ratings; the
impact of inflation; fluctuations in the currency markets; changes
in national and local government legislation, taxation, controls or
regulations and/ or changes in the administration of laws, policies
and practices, expropriation or nationalization of property and
political or economic developments in Tanzania and other
jurisdictions in which the offeree company or its affiliates do or
may carry on business in the future; lack of certainty with respect
to foreign legal systems, corruption and other factors that are
inconsistent with the rule of law; damage to the offeree company’s
reputation due to the actual or perceived occurrence of any number
of events, including negative publicity with respect to the offeree
company’s handling of environmental matters or dealings with
community groups, whether true or not; the possibility that future
exploration results will not be consistent with the offeree
company’s expectations; litigation and legal and administrative
proceedings; contests over title to properties, particularly title
to undeveloped properties, or over access to water, power and other
required infrastructure; business opportunities that may be
presented to, or pursued by, the offeree company; our ability to
successfully integrate acquisitions or complete divestitures; risks
associated with working with partners in jointly controlled assets;
employee relations including loss of key employees; increased costs
and physical risks, including extreme weather events and resource
shortages, related to climate change; availability and increased
costs associated with mining inputs and labour. In addition,
there are risks and hazards associated with the business of mineral
exploration, development and mining, including environmental
hazards, industrial accidents, unusual or unexpected formations,
pressures, cave-ins, flooding and gold bullion, copper cathode or
gold or copper concentrate losses (and the risk of inadequate
insurance, or inability to obtain insurance, to cover these
risks). Other unknown or unpredictable factors could cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements
should therefore be construed in the light of such factors.
Neither Barrick nor Acacia, nor any of their respective associates
or directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this Announcement
will actually occur. You are cautioned not to place undue
reliance on these forward-looking statements. Readers are
cautioned that forward-looking statements are not guarantees of
future performance. Specific reference is made to the most
recent Form 40- F/Annual Information Form on file with the SEC and
Canadian provincial securities regulatory authorities for a more
detailed discussion of some of the factors underlying
forward-looking statements and the risks that may affect Barrick’s
ability to achieve the expectations set forth in the
forward-looking statements contained in this press release.
Other than in accordance with their legal or
regulatory obligations (including under the Listing Rules and the
Disclosure and Transparency Rules of the FCA), neither Barrick nor
Acacia is under any obligation, and Barrick and Acacia expressly
disclaim any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No profit forecasts or quantified
financial benefits statement
No statement in this Announcement is intended as
a profit forecast, profit estimate or quantified financial benefits
statement.
Dealing disclosure
requirements
Under Rule 8.3(a) of the Code, any person who is
interested in 1% or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain
details of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s).
An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the
10th business day following the commencement of the offer period
and, if appropriate, by no later than 3.30 pm (London time) on the
10th business day following the announcement in which any
securities exchange offeror is first identified. Relevant
persons who deal in the relevant securities of the offeree company
or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who
is, or becomes, interested in 1% or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details
of the dealing concerned and of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to
an agreement or understanding, whether formal or informal, to
acquire or control an interest in relevant securities of an offeree
company or a securities exchange offeror, they will be normally
deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made
by the offeree company and by any offeror and Dealing Disclosures
must also be made by the offeree company, by any offeror and by any
persons acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in
respect of whose relevant securities Opening Position Disclosures
and Dealing Disclosures must be made can be found in the Disclosure
Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
The defined terms used in this section "Dealing
disclosure requirements" are defined in the Code which can be found
on the Takeover Panel's website.
Publication on website
A copy of this Announcement and the documents
required to be published by Rule 26 of the Code will be made
available (subject to certain restrictions relating to persons
resident in Restricted Jurisdictions) on Barrick’s website at
www.barrick.com and Acacia’s website at www.acaciamining.com by no
later than 12 noon (London time) on the business day following the
date of this Announcement in accordance with Rule 26.1(a) of the
Code. The content of the websites referred to in this
Announcement are not incorporated into and do not form part of this
Announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code,
Barrick Shareholders and Acacia Shareholders may request a hard
copy of this Announcement by contacting Computershare Investor
Services PLC during business hours at +44 (0) 370 707 1895 or by
submitting a request in writing to Computershare Investor Services
PLC, Corporate Actions Team, The Pavilions, Bridgwater Road,
Bristol, BS99 6ZZ. If you have received this Announcement in
electronic form, copies of this Announcement and any document or
information incorporated by reference into this document will not
be provided unless such a request is made.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO, OR FROM ANY
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF THAT JURISDICTION
FOR IMMEDIATE RELEASE
19 July 2019
RECOMMENDED FINAL OFFER for ACACIA MINING
PLC by BARRICK GOLD CORPORATION
1. Introduction
The Boards of Barrick Gold Corporation
(“Barrick”) and Acacia Mining plc
(“Acacia”) are pleased to announce that they have
reached agreement on the terms of a recommended offer by Barrick
for the ordinary share capital of Acacia that Barrick does
not already own. It is intended that the Acquisition will be
implemented by means of the Scheme.
2. The Acquisition
Under the terms of the Acquisition, which will
be subject to satisfaction (or, where applicable, waiver) of the
Conditions and further terms set out in Appendix 1 to this
Announcement and to be set out in the Scheme Document, Scheme
Shareholders at the Scheme Record Time will be entitlement to
receive:
For every Scheme Share: 0.168 New
Barrick Shares (the “Share for Share Exchange Ratio”) and any
Acacia Exploration Properties Special Dividends and any Deferred
Cash Consideration Dividends, as described below.
On the basis of the market closing price of a
Barrick Share on the NYSE on 18 July 2019 (being the last business
day before this Announcement), the exchange rate of US$1.2479:£1 on
that date and the total number of 410,085,499 Acacia Shares in
issue on that date, the terms of the Share for Share Exchange Ratio
imply a value of approximately 232 pence per Acacia Share, total
consideration of approximately £343 million ($428 million) for
Acacia minority shareholders and a total value of approximately
£951 million for Acacia.
On that basis, the terms of the Share for Share
Exchange Ratio represent:
- a premium of 53.5% to the closing price of 151 pence per Acacia
Share on 20 May 2019 (the last business day prior to the
announcement of a possible offer by Barrick for Acacia);
- a premium of 24.2% to the closing price of 187 pence per Acacia
Share on 18 July 2019 (the last business day before this
Announcement); and
- a premium of 28.2% to the volume-weighted average price per
Acacia Share over the twenty trading days ended on 18 July 2019
(the last business day before this Announcement).
In addition to the Share for Share Exchange
Ratio, under the terms of the Acquisition, Acacia Shareholders
(including Barrick or any other member of the Barrick Group) whose
names appear on the register of members of Acacia at the Scheme
Record Time (irrespective of whether or not they attended and voted
at the Court Meeting or the General Meeting (and if they attended
and voted, whether or not they voted in favour of the
Acquisition)), will be entitled to receive and retain the Acacia
Exploration Properties Special Dividends and any Deferred Cash
Consideration Dividends (if applicable) paid as a consequence of
the sales process to realise value from the sale of certain of the
Acacia Exploration Properties as described under “Sale of the
Acacia Exploration Properties” below.
The Acacia Exploration Properties are Acacia’s
exploration assets located in the Republic of Tanzania, the
Republic of Kenya, the Republic of Mali and Burkina Faso, including
the Excluded Assets (being Acacia Group’s interests in the Nyanzaga
Gold Project in Tanzania and the South Houndé Project in Burkina
Faso), in respect of which sale processes have already been
commenced by Acacia and are well advanced. Value attributable to
the Excluded Assets of US$10 million has been reflected in the
increased exchange ratio reflected in the Share for Share Exchange
Ratio.
The independent technical value
(“ITV”) of the Acacia Exploration Properties set
out in the Competent Persons’ Report produced by SRK reflects an
attributable value range for the Acacia Exploration Properties of
US$37 million (Low Value) to US$87 million (High Value), with a
Preferred Value of US$57 million.
Included in the Preferred Value is an amount of
US$9 million which relates to the Excluded Assets. The value of the
Acacia Exploration Properties excluding the Excluded Assets (the
“Sale Exploration Properties”), as reported by
SRK, amounts to US$48 million (the “Exploration
Value”). Whilst the ITV attributed a value of US$9 million
to the Excluded Assets; since publication of the ITV the value has
increased to US$10 million as a result of the renegotiation of the
agreement in which there will be an increase in the upfront
payment, in lieu of the royalty, for the Nyanzaga Gold Project, as
reflected in the Share for Share Exchange Ratio.
Barrick and Acacia note that the value
of the Sale Exploration Properties included in the ITV is based on
a number of assumptions which may or may not be supported and there
can be no certainty or any assurance given by Barrick or Acacia
that any sale will occur, or in the event that a sale does occur,
that a realisation of such value will be achieved through a sale.
Scheme Shareholders should therefore not assume that the
Exploration Value will be achieved through the sale of the Sale
Exploration Properties and that Net Proceeds equivalent to the
Exploration Value will be payable to Acacia Shareholders as Acacia
Exploration Properties Special Dividends.
Barrick currently owns 262,246,950 Acacia
Shares, representing approximately 63.9 per cent of the issued
ordinary share capital of Acacia.
The terms of the Acquisition are final and
therefore, in accordance with the Code, Barrick will not be
permitted to increase the terms of the Acquisition.
The New Barrick Shares will be issued as fully
paid and will rank equally in all respects with the existing
Barrick Shares and will be entitled to receive any dividends and/or
other distributions declared or paid by Barrick in respect of the
Barrick Shares with a record date falling after the Effective
Date. Applications will be made to the NYSE and the Toronto
Stock Exchange for the New Barrick Shares to be listed for trading,
with listing being subject to the approval or acceptance of each
exchange. Uncertified Scheme Shareholders (that is, those who
hold Scheme Shareholders through CREST) will receive Barrick CDIs
in respect of their entitlement to New Barrick Shares.
The Scheme is expected to become effective
during Q4 2019, subject to the satisfaction or waiver of all
relevant conditions.
3. Sale of the Sale Exploration
Properties
Under the terms of the Acquisition, Barrick has
agreed, for the benefit of all Acacia Shareholders, to undertake a
sales process to realise value for the Sale Exploration Properties,
whereby Barrick will, following a customary marketing process,
dispose of the Sale Exploration Properties in an arm’s length
transaction or series of transactions at the best cash price
reasonably obtainable by Barrick in the market at the time (a
“Sale” or “Sales”) during the
period of two years commencing on the Effective Date (the
“Sale Period”).
In view of Barrick’s 63.9 per cent shareholding
in Acacia, Barrick’s interests in the outcome of the sales process
to realise value for the Sale Exploration Properties are wholly
aligned with those of other Acacia Shareholders.
The Sale Exploration Properties may be sold by
Barrick on an individual or combined basis within the Sale Period.
Individual sales of the Sale Exploration Properties may take place
at different times within the Sale Period, but Barrick intends to
conclude the sales process in respect of the Sale Exploration
Properties on or before the end of the Sale Period. Further details
of the anticipated process for sale of the Sale Exploration
Properties and the arrangements that will be put in place will be
set out in the Scheme Document.
The Net Proceeds of any Sale or Sales will be
paid to Acacia Shareholders (including Barrick or any other member
of the Barrick Group) whose names appear on the register of members
of Acacia at the Scheme Record Time (irrespective of whether or not
they attended and voted at the Court Meeting or the General Meeting
(and if they attended and voted, whether or not they voted in
favour of the Acquisition)) on a pro rata basis by reference to
their existing holdings of Acacia Shares at that time by way of a
US Dollar cash payment payable on or before 31 December in the
relevant year such Sale or Sales are completed (the “Acacia
Exploration Properties Special Dividends”).
To the extent any Sale consummated prior to the
end of the Sale Period involves the payment of any escrow,
holdback, deferred cash consideration or similar following that
date (“Deferred Cash Consideration”), any Net
Deferred Cash Consideration will be paid to Acacia Shareholders
(including Barrick or any other member of the Barrick Group) whose
names appear on the register of members of Acacia at the Scheme
Record Time in the manner and on the basis described above (a
“Deferred Cash Consideration Dividend”). Deferred
Cash Consideration Dividends (if any) will be payable by Acacia
once such Deferred Cash Consideration is actually received in
cleared funds by Barrick or any Barrick subsidiary.
Barrick will make an announcement by no later
than 31 December each year until all Net Proceeds have been paid
and all Deferred Cash Consideration has been received, as to any
Sale Exploration Properties sold or Deferred Cash Consideration
received in the relevant year and the gross and Net Proceeds
attributable to such Sale or Sales and the amount of the Acacia
Exploration Properties Special Dividend and/or Deferred Cash
Consideration Dividend paid or payable to Acacia Shareholders as a
result.
No statements made in this paragraph constitute
“post-offer undertakings” for the purposes of Rule 19.5 of the
Code.
4. Background to and reasons for the
Acquisition
Disputes with the Government of Tanzania
The business and operations of Acacia have been
materially affected by the ongoing disputes with the Government of
Tanzania (“GoT”). In March 2017, the GoT announced
a ban on the export of metallic mineral concentrates (the
“Export Ban”) and, as a consequence, in the second
half of 2017, Acacia took the decision to place the Bulyanhulu mine
on reduced operations. The Export Ban remains in effect.
In addition, there are numerous ongoing
unresolved disputes between the GoT and Acacia Group companies,
including disputes in relation to tax, environmental and criminal
matters. In October 2018, one of Acacia’s employees in Tanzania,
was charged by the Tanzanian Prevention and Combating of Corruption
Bureau (“PCCB”) with an offence under the
Tanzanian Prevention and Combating of Corruption Act. The PCCB also
charged two current and one former employee of Acacia’s Tanzanian
businesses, together with Bulyanhulu Gold Mine Limited
(“BGML”) and Pangea Minerals Limited
(“PML”) and North Mara Gold Mine Limited
(“NMGML”) and a third party Canadian entity,
Explorations Miniers du Nord Ltd., this being the former joint
venture partner for the Tulawaka mine, with a number of different
offences, including breaches of the Tanzanian Anti-Money Laundering
Act. A total of 39 charges were brought. Acacia and Barrick remain
deeply concerned regarding the ongoing risks to these individuals,
who still remain in custody on criminal charges for a range of
allegations without committal for trial or access to bail.
Acacia continues to favour a negotiated
resolution to the Company’s disputes with the GoT but, as a fall
back, the Acacia Group sought to protect the Company’s business
through the contractual arbitration proceedings commenced in 2017
by Acacia’s subsidiaries, BGML and PML.
GoT Arrangements
Barrick and Acacia both believe that a
negotiated settlement of Acacia’s disputes with the GoT is
necessary. Barrick, the Company’s majority shareholder, has been in
discussions with the GoT in an effort to identify and document a
solution to the Company’s disputes which would include a lifting of
the Export Ban and settlement of all other outstanding disputes.
Acacia has co-operated and provided assistance to Barrick in
relation to the discussions with the GoT.
On 19 October 2017, Barrick and the GoT signed a
set of framework documents which envisaged a US$300 million
settlement payment and subsequent 50/50 sharing of economic
benefits between Acacia and the GoT. As Acacia was not permitted to
participate in the discussion, Acacia was not a party to the
framework documents and was not involved in negotiating the terms
included therein. There followed a lengthy period of time during
which Barrick and the GoT were discussing a set of agreements to
implement the framework documents.
In the course of May 2019, Barrick’s
negotiations with the GoT advanced to the point where draft
Transaction Documents for a possible settlement had been
extensively negotiated and initialled by the GoT, albeit with a
number of substantive issues still outstanding. The key principle
of the draft Transaction Documents under discussion is that going
forward the GoT and Acacia’s Tanzanian mine operating subsidiaries
(the “TMCs”) will share the economic benefits
derived from the Tanzanian mines on a 50/50 basis, based on the
life of mine plans of the TMCs. The GoT will receive its share of
economic benefits through taxes, royalties, fees and other fiscal
levies and through the GoT’s 16% free carried interest in all
distributions (including shareholder loan repayments) from the TMCs
and a new Tanzanian management company. The 50/50 sharing
arrangement will be reviewed annually to ensure that the actual and
projected sharing of economic benefits is in accordance with the
50/50 principle. The draft Transaction Documents also provide for
payment by the Acacia Group of an aggregate sum of US$300 million
in consideration for the full, final and comprehensive settlement
of all existing disputes between the GoT and the Acacia Group,
including all liability to taxation and a waiver of actual or
potential claims on a mutual basis. This US$300 million payment is
outside of (and therefore not taken into account for the purposes
of) the 50/50 sharing of the economic benefits over time. The
settlement envisaged by the draft Transaction Documents involves a
significant value transfer from Acacia to the GoT, but this has
been critical to agreeing draft settlement terms with the GoT and
creating a viable operating framework for the TMCs going forward. A
summary of the material terms of the current draft Transaction
Documents under discussion is set out in Appendix 4.
Recent Developments
On 21 May 2019, Barrick informed Acacia that it
had made significant progress towards finalising a proposed
resolution to the disputes between the GoT and Acacia and provided
the Transaction Documents to Acacia, noting their status. On the
same date Barrick also provided Acacia with a letter dated 19 May
2019 from the Acting Chairman of the GoT negotiating team, and
addressed to each of the TMCs. This letter (the “GoT
Negotiating Team Letter”) states that the GoT will not
execute final agreements for the resolution of the Company’s
disputes if Acacia is one of the counterparties to the agreements
and that it will only sign such agreements “if satisfied that
substantial changes have been made to the management style of the
Operating Companies and of their shareholders”. Acacia immediately
reached out to the most senior levels in the GoT to seek clarity on
the letter received and to date has received no response.
On 12 July 2019, Acacia announced that its North
Mara mine had received a letter (the “No
Export Letter”) from the Mining Commission of the
Tanzanian Ministry of Minerals informing it that the Mining
Commission is soon to conduct an inspection of North Mara’s gold
production. The No Export Letter stated that export permits for
gold shipments from North Mara would be issued following completion
of this inspection. Until such time as Acacia receives permits for
gold shipments the Company cannot sell its product and production
will accrue to inventory. The Company anticipates that under a
normal production schedule it could operate for approximately one
further week before running out of storage capacity. Acacia is
seeking clarification of the timing for completion of the
inspection.
On 16 July 2019, the National Environment
Management Council (“NEMC”) issued NMGML with a
prohibition notice (the “Prohibition Notice”)
which orders the North Mara mine to stop use of its tailings
storage facility (the “TSF”) by 6.00 a.m. local
time on 20 July 2019. The NEMC cited the North Mara mine’s failure
to contain and prevent seepage from the TSF as grounds for its
issuance of the Prohibition Notice. The Prohibition Notice stated
that it shall remain effective until such time that NEMC were to be
satisfied that the North Mara mine has taken measures to contain
seepage from the TSF. Acacia is seeking clarification of the
Prohibition Notice. The effect of the North Mara mine having to
stop using the TSF would be the immediate cessation of gold
production, and in time, if the prohibition is not lifted,
cessation of mining operations at North Mara.
Transaction Committee observations on current
status of operations
The Transaction Committee acknowledges that the
GoT Negotiating Team Letter represented a material development in
respect of Acacia’s status with the GoT. Shortly following the GoT
Negotiating Team Letter, an official spokesman of the GoT
confirmed, in a press conference, their position that they would
not deal with Acacia going forward. Furthermore Acacia’s local
staff have engaged with their counterparts in government who have
again confirmed that the GoT will not engage with Acacia for the
purposes of agreeing a settlement. As things stand therefore, there
is a serious question as to whether Acacia’s entry into the
Transaction Documents and the building of a long-term partnership
with the GoT on which the future for the business envisaged in the
Transaction Documents necessarily relies, are a realisable
alternative for Acacia as an independent company.
Whilst Acacia has continued to operate its
assets and achieve significant production despite the deteriorating
operating environment following the Export Ban, the Transaction
Committee views the No Export Letter and Prohibition Notice
as a further material deterioration in the operating environment.
In particular the No Export Letter and the Prohibition Notice will
restrict the ability of Acacia to operate at North Mara until such
time as the Company receives export permits and the prohibition is
lifted on use of the TSF.
Considering the impending loss of the ability of
Acacia to produce gold and operate the mine at North Mara, the
Acacia Group’s cash flow from operations will be adversely impacted
and the Acacia Group will be required to meet its on-going working
capital requirements and other financial obligations from its
existing cash balance. This position is not sustainable and the
liquidity of the Company will be constrained in the absence of a
resolution.
In the absence of a settlement of its disputes
with the GoT the Transaction Committee remain concerned about the
potential for the operating environment for the Acacia Group to
further deteriorate. Further actions from the GoT have the
potential to negatively affect the sustainability of the Acacia
Group’s business and present risks to Acacia’s employees and other
stakeholders.
The Acacia Group has, to date, and only as a
fall-back option, sought to protect its assets via the arbitration
proceedings commenced in July 2017. As the Transaction
Committee has previously disclosed, however, there are significant
collateral risks in PML and BGML continuing to seek to protect
their businesses through maintaining the arbitrations pending a
negotiated resolution. Accordingly, as announced on 17 July 2019,
PML and BGML have now sought a stay of those proceedings in the
light of increasing risks and to allow more time for a negotiated
resolution. The Transaction Committee has also concluded that the
value to Scheme Shareholders of the Acacia Group pursuing these
arbitration proceedings in the future does not exceed the value of
the Consideration.
As further explained in the section headed
“Acacia Recommendation and Irrevocable Undertakings” below, in
light of this background and current circumstances, the Transaction
Committee, having considered, amongst other factors, the financial
terms of the Scheme, believes that the Acquisition is a fair
outcome for the Scheme Shareholders. It is also an attractive
solution for the Company’s other key stakeholders, as it may enable
Barrick to finalise the terms of a settlement with the GoT, thereby
resolving the long-running disputes and potentially allowing the
Acacia Group’s Tanzanian business, and its employees in Tanzania,
who have provided exceptional and unstinting support in continuing
operations in country, to return to a normalised operating
environment.
Background to the Acquisition
It is against the background of the GoT's
position as highlighted above that Barrick concluded that the only
way forward to preserve, to the extent possible, the value of
Acacia’s assets was for Barrick to make an offer to acquire all of
the Acacia Shares not already owned by it and on 21 May 2019,
Barrick presented Acacia with an indicative proposal to acquire all
the issued and to be issued share capital of Acacia not already
owned or controlled by Barrick. The consideration originally
proposed by Barrick was in the form of new common shares in
Barrick, with Scheme Shareholders receiving 0.153 of a new common
share of Barrick for every ordinary share in Acacia (the
“Possible Offer”). Acacia’s announcement
confirming Barrick’s indicative proposal stated that any firm
intention to make an offer in accordance with Rule 2.7 of the Code
would be subject to a deadline of 5.00 p.m. on 18 June 2019 (the
“First PUSU Deadline”).
On 18 June 2019, Acacia announced that Barrick
had requested that Acacia seek an extension to the First PUSU
Deadline in order to facilitate further engagement with Acacia and
its minority shareholders. In order to provide further time to
determine a proposal that might receive sufficient shareholder
support, the Acacia Board requested that the Panel extend the First
PUSU Deadline and, in light of this request, an extension was
granted by the Panel to 5.00 p.m. on 9 July 2019 (the
“Second PUSU Deadline”).
On 24 June 2019, Acacia announced that in 2018
it had engaged SRK, an independent technical consultancy, to carry
out a comprehensive review of its geological and resource modelling
and preparation of its life of mine plans and mineral resource and
mineral reserve statements. SRK presented the results of this
review in the form of a Competent Persons’ Report which was
effective on 30 June 2019 and published by Acacia on 9 July 2019.
The Transaction Committee Directors confirm that SRK have confirmed
that an updated valuation of Acacia’s assets as at the date of this
announcement would not be materially different from the valuation
thereof contained in the Competent Persons’ Report. The Competent
Persons’ Report and an executive summary thereof can be found on
Acacia’s website as follows:
https://www.acaciamining.com/media/press-releases/2019/2019-07-09.aspx.
On 9 July 2019, Acacia also announced that
Barrick had requested that Acacia seek an extension to the Second
PUSU Deadline in order to allow Barrick more time to review the
Competent Persons’ Report and facilitate further engagement with
Acacia on the terms of the proposal. In order to further facilitate
such discussions, the Acacia Board requested that the Panel extend
the Second PUSU Deadline and, in light of this request, an
extension was granted by the Panel to 5.00 p.m. on 19 July
2019.
Acacia has subsequently engaged with Barrick on
the contents of the Competent Persons’ Report and other matters
relating to the terms of the Possible Offer. Following these
discussions, Barrick informed the Transaction Committee that, while
constructive, the discussions with SRK and Acacia, and Barrick’s
detailed review of the Competent Persons’ Report, did not result in
Barrick attributing greater value to Acacia’s operating mines than
taken into account in connection with its Possible Offer. Barrick
has informed the Transaction Committee that the discussion did,
however, lead it to conclude that it was in a position to revise
its proposal to take into account two additional value items
unrelated to Acacia’s operating mines as noted below.
Barrick’s revised proposal
Barrick’s Possible Offer did not attribute any
value to the Acacia Exploration Properties. The Competent Persons’
Report ascribed an ITV to the Acacia Exploration Properties ranging
from US$37 million (Low Value) to US$87 million (High Value), with
a Preferred Value of US$57 million. Barrick has agreed with Acacia
(i) to improve the exchange ratio upon which Scheme Shares will be
exchanged for Barrick Shares to reflect US$10 million in respect of
the disposal by Acacia of the Excluded Assets, and (ii) to
undertake a sales process (for the benefit of all Acacia
Shareholders) to realise value for the Sale Exploration Properties,
with the Net Proceeds of any Sale or Sales being paid to all Acacia
Shareholders by way of Acacia Exploration Properties Special
Dividends.
In addition, Barrick has agreed to further
improve the exchange ratio upon which Scheme Shares will be
exchanged for Barrick Shares to reflect general and administrative
expense savings expected to be realised following the Effective
Date through the office closures and personnel reductions referred
to under the section headed “Directors, management and employees
and locations of business” below.
The Transaction Committee has considered the
terms of the Acacia Exploration Properties Special Dividends and
any Deferred Cash Consideration Dividends. The Transaction
Committee notes that the Competent Persons’ Report attributes a
value of US$48 million to the Sale Exploration Properties. However,
the Transaction Committee notes that there is no certainty around
the outcome of any sales process and therefore the cash amount that
may be realised from the disposal of the Sale Exploration
Properties may be materially lower (or higher) and have taken this
into account in assessing the value of the Consideration.
In considering the merits of these terms, the
Transaction Committee has also taken the following into
account:
- The terms of the Transaction Documents as summarised in
Appendix 4 to this Announcement and their likely impact on the
operations, future financial results and prospects for Acacia,
based on the management’s long-term business plan for the Acacia
Group’s mines (while acknowledging at the same time that it is not
known what the final terms of such settlement may comprise)
- The recent and continuing deterioration of the operating
environment, as exemplified by the No Export Letter and Prohibition
Notice
- The urgent need to create certainty and stability for Acacia,
its people and the communities in which it operates, which the
Transaction Committee believes is more likely to happen under the
full ownership and control of Barrick given the current attitude of
the GoT towards Acacia
- The statement in the GoT's Negotiating Team Letter as to the
inability of Acacia to enter into the Transaction Documents
and the significant uncertainty as to the ability of Acacia to
build a long term partnership with the GoT
- The risks and uncertainties associated with the fall-back
alternative of continuing with the outstanding arbitration, as
described above
- The Transaction Committee has also concluded that the value to
Scheme Shareholders of the Acacia Group pursuing these arbitration
proceedings in the future does not exceed the value of the
Consideration
- The certainty created for Scheme Shareholders to receive the
Consideration if the Acquisition were to proceed
- The apparent lack of alternative buyers of Acacia or any of its
Tanzanian assets at this time of great uncertainty for the
Company
- The significant risks that Barrick is assuming given that it
has not yet reached a final agreement with the GoT on the
Transaction Documents.
5. Recommendation
The Transaction Committee Directors, who have
been so advised by J.P. Morgan Cazenove and RBC Capital Markets as
to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing their
advice, J.P. Morgan Cazenove and RBC Capital Markets have taken
into account the commercial assessments of the Transaction
Committee Directors.
Accordingly, the Transaction Committee Directors
have unanimously approved the Acquisition and intend to recommend
that the Scheme Shareholders vote in favour of the Scheme at the
Court Meeting and the resolutions to be proposed at the General
Meeting, as Rachel English and Andre Falzon, the only members of
the Board who hold any Acacia Shares, have irrevocably undertaken
to do in respect of their own Acacia Shares (representing
approximately 0.01 per cent. of the issued ordinary share capital
of Acacia).
J.P. Morgan Cazenove and RBC Capital Markets are
providing independent financial advice to the Transaction Committee
Directors for the purposes of Rule 3 of the Code. Lazard & Co,.
Limited is providing independent financial advice to the
Transaction Committee Directors and in providing such advice Lazard
& Co., Limited has relied upon the commercial assessment of the
Transaction Committee Directors.
Each of J.P. Morgan Cazenove, RBC Capital
Markets and Lazard & Co., Limited has given and not withdrawn
its consent to the inclusion in this Announcement of references to
its name in the form and context in which it appears.
6. Transaction Committee
Stephen Galbraith, who is both a non-executive
director of Acacia and an employee of Barrick, has played no part
in the consideration by the Transaction Committee Directors of the
Acquisition, the recommendation of it by the Transaction Committee
Directors or the discussions between Barrick and the GoT.
7. Irrevocable Undertakings
Barrick has received irrevocable undertakings to
vote in favour of, or procure the voting in favour of, the Scheme
at the Court Meeting and the resolutions to be proposed at the
General Meeting from Rachel English and Andre Falzon, the only
members of the Board who hold any Acacia Shares, in respect of a
total of 26,383 Acacia Shares, representing approximately 0.01 per
cent. of the existing issued ordinary share capital of Acacia.
The irrevocable undertakings will cease to be
binding only if one of the events set out in Appendix 3 takes
place.
Further details of these irrevocable
undertakings are set out in Appendix 3 to this Announcement.
8. Information relating to
Barrick
Barrick is a leading international gold mining
company.
Barrick announced a recommended share for share
merger of Barrick and Randgold on 24 September 2018, which became
effective on 1 January 2019. The new company is still known
as Barrick and continues to trade its shares on the Toronto Stock
Exchange under the trading symbol ABX and on the NYSE under the
trading symbol GOLD (the ticker formerly held by Randgold on
NASDAQ). Barrick now has interests in mining operations or
projects in 15 countries: Canada, the United States,
Australia, Argentina, Chile, Côte d’Ivoire, the Dominican Republic,
the Democratic Republic of Congo, Mali, Papua New Guinea, Peru,
Saudi Arabia, Senegal, Tanzania and Zambia. Barrick’s
principal products and sources of earnings are gold and
copper.
In July 2019, Barrick and Newmont Goldcorp
Corporation (“Newmont”) successfully concluded the
transaction establishing Nevada Gold Mines LLC. The new
company, owned 61.5% and operated by Barrick, and owned 38.5% by
Newmont, combines operations, assets, reserves and talent of
Barrick and Newmont in Nevada.
Barrick is a company organized under the laws of
the Province of British Columbia, Canada.
Barrick has targeted an annualised dividend of
US$0.16 per Barrick Share. Consistent with this policy, a
dividend of US$0.04 per Barrick Share was declared in respect of
the first quarter of 2019. The amount and timings of
dividends are within the discretion of the Barrick board of
directors. Barrick’s board of directors review the dividend
quarterly, based on, among other things, Barrick’s current and
projected liquidity profile.
9. Information relating to
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 is a
UK public company headquartered in London. It is listed on the Main
Market of the London Stock Exchange and has a secondary listing on
the Dar es Salaam Stock Exchange.
10. Description of history of disputes
with the GoT from 2017 to February 2019
On 3 March 2017, the Ministry of Energy and
Minerals in Tanzania implemented the Export Ban, forcing Acacia
immediately to cease all exports of its gold/copper concentrate at
the Bulyanhulu and Buzwagi mines.
In early April 2017, a Presidential Committee of
the GoT was formed to investigate the contents of metallic mineral
concentrates in various locations in Tanzania, including samples
from the impounded containers owned by Acacia. Shortly thereafter,
a second Presidential Committee of the GoT (the “Second
Committee”) was formed to consider the economic and
regulatory issues relating to the export of metallic mineral
concentrates from Tanzania. On 12 June 2017, the Second Committee
announced its conclusions that Acacia had under-declared revenues
and tax payments over a number of years by tens of billions of US
Dollars.
Acacia disputed these conclusions and was
engaging with the highest levels of the GoT. In June 2017 Barrick
began engaging separately with the GoT in relation to the disputes
between Acacia and the GoT. Due to requirements of the GoT, Acacia
was not permitted to participate in these and future discussions
between the GoT and Barrick nor was it permitted to subsequently
engage directly at the highest levels with the GoT. In light of
these developments, the Independent Acacia Directors recognised
that supporting Barrick’s discussions with the GoT was the most
pragmatic way to achieve a settlement of the disputes and Barrick
has worked in good faith, with the consent and support of Acacia
and for the benefit of all shareholders.
On 29 June 2017, the GoT published draft
legislation which recommended changes to the legal framework
governing the natural resources sector in Tanzania, including an
increase in the royalty rate applicable to gold, copper and silver
to 6%. Furthermore, the Tanzanian Parliament approved a new Finance
Act, imposing a 1% clearing fee (which the Acacia Group has been
paying under protest) on the value of all minerals exported from
Tanzania from 1 July 2017. The legislation became law in early July
2017.
On 4 July 2017, the Company announced that the
Tanzanian operating companies that produce concentrate at
Bulyanhulu and Buzwagi, namely PML and BGML, had each commenced
international arbitration proceedings against the GoT under the
terms of their respective mining development agreements with the
GoT alleging breach of such agreements relating to the new
legislation.
On 24 July 2017, the Tanzania Revenue Authority
delivered a series of Notices of Adjusted Assessments in relation
to Bulyanhulu and Buzwagi with a total of US$40 billion of alleged
unpaid taxes and approximately US$150 billion of penalties and
interest owed, dating back to the mines’ first establishment and
operation. In August 2017, the Tanzania Revenue Authority delivered
a further series of Notices of Adjusted Assessment in relation to
PML only, dating back to 2008, in respect of a total of US$3
billion of alleged unpaid taxes, penalties and interest owed. The
assessments appear to relate to the historical operation of the
Tulawaka mine.
On 22 August 2017, Barrick informed the
Independent Acacia Directors that it had proposed a 50/50 economic
benefit sharing split to the GoT and subsequently, on 16 October
2017, provided management and the Independent Acacia Directors with
an overview of the proposed framework terms of settlement.
On 4 September 2017, without the ability to
export concentrate from the Bulyanhulu mine, the Acacia Board made
the decision to place the underground mine at Bulyanhulu on reduced
operations.
On 19 October 2017, Barrick and the GoT signed a
set of framework documents which envisaged a US$300 million
settlement payment and subsequent 50/50 sharing of economic
benefits between Acacia and the GoT. Acacia was not a party to the
framework documents.
In October 2018, one of Acacia’s employees in
Tanzania, was charged by the Tanzanian Prevention and Combating of
Corruption Bureau (“PCCB”) with an offence under
the Tanzanian Prevention and Combating of Corruption Act. The PCCB
also charged two current and one former employee of Acacia’s
Tanzanian businesses, together with PML, BGML and NMGML and a third
party Canadian entity, Explorations Miniers du Nord Ltd., this
being the former joint venture partner for the Tulawaka mine, with
a number of different offences, including breaches of the Tanzanian
Anti-Money Laundering Act. A total of 39 charges were brought.
Acacia remains deeply concerned regarding the ongoing risks to
these individuals, who still remain in custody on criminal charges
for a range of allegations without committal for trial or access to
bail.
On 10 January 2019, the North Mara mine received
an environmental protection order (“First EPO”)
from the NEMC requiring payment of a fine of approximately
US$130,000 in relation to alleged breaches of environmental
regulations in Tanzania. NEMC’s reported findings allege discharges
of a hazardous substance at the North Mara mine. While the mine was
not provided with the supporting reports, findings or testing data
regarding the alleged breaches of environmental regulations, the
reports of discharges related to seepage from the TSF, an issue
which was well known to Acacia and the GoT. To dispose of all
regulatory or other legal action in respect of the First EPO, NMGML
decided to pay the fine of approximately US$130,000, albeit under
protest. On 17 May 2019, Acacia confirmed that NMGML had received a
verbal notice from the GoT that it is to be issued with an
environmental protection order in relation to alleged historical
breaches of environmental regulations in Tanzania. On 25 May 2019,
NMGML received an environmental protection order (the
“Second EPO”), which appears to have been issued
on the basis of the matters that were the subject of the First EPO.
Under the Second EPO, NMGML was subject to a fine of approximately
US$2,500,000. Despite not having received any supporting reports,
findings or technical data in relation to the Second EPO,
NMGML decided again to pay the fine under protest.
On 20 February 2019, Barrick announced that it
had progressed discussions with the GoT, had arrived at a proposal
setting out the commercial terms to resolve outstanding disputes
concerning the Company’s operations in Tanzania and would present
its proposal to Acacia in the near future. Barrick further noted
that work was under way to finalise the definitive agreements and
that, to become effective, the proposal and those agreements must
be approved by Acacia and the GoT, in keeping with applicable laws
and regulations. On 28 February 2019 a meeting took place between
Barrick and Acacia representatives at which Acacia was provided
with detailed information about the proposal and presented with
draft documents in respect of the proposed settlement.
11. Directors, management and employees
and locations of business
Statement by Barrick
Following completion of the Acquisition,
responsibility for the operational management of Acacia’s
operations will sit with Barrick’s regional team for Africa and the
Middle East.
Following completion of the Acquisition, Barrick
expects to close Acacia’s existing head office in London.
Barrick also intends to simplify Acacia’s corporate office
functions and remove any overlapping shared functions. These
changes are not expected to result in material headcount reductions
in respect of persons currently employed as part of the Acacia
Group.
The detailed plans for any rationalisation
measures are not yet known but the finalisation and implementation
of any rationalisation measures would be subject to comprehensive
further analysis, planning and appropriate engagement with affected
members of staff, in accordance with all relevant legal
obligations.
Save as set out in this section, Barrick does
not intend to make any material changes to the conditions of
employment of Acacia Group employees or make any material changes
to the balance of skills and functions of the employees of the
Acacia Group. Owing to the nature of its business, Acacia
does not have a research and development function. Barrick
does not intend to redeploy material fixed assets of the Acacia
Group or (save as described in this paragraph 11) to make changes
to the locations of its business.
Following completion of the Acquisition, the
existing employment rights, including pension rights, of management
and employees of the Acacia Group will be safeguarded in accordance
with contractual and statutory requirements.
The terms of the draft Transaction Documents
provide that all roles related to the TMCs’ Tanzanian operations
currently carried out from an office in Johannesburg will be
relocated to Tanzania and for the closure of the Johannesburg
office. In addition, the Transaction Documents envisage that
a new operating company will be incorporated in Tanzania and will
be the management services company for the TMCs’ with its head
office located in Mwanza, Tanzania. Save as described above,
Barrick does not expect to make significant operational changes in
Tanzania.
Acacia Shares are currently listed on the
premium segment of the Official List of the London Stock Exchange
and the Dar es Salaam Stock Exchange. As set out in paragraph
15, a request will be made to cancel trading in Acacia Shares on
the London Stock Exchange and to delist Acacia Shares from the
Official List and the DSE, with effect as of or shortly following
the Effective Date. Acacia will also be re-registered as a
private company.
No statements made in paragraphs 2, 3, 4, 11 or
12 constitute "post-offer undertakings" for the purposes of Rule
19.5 of the Code.
Response from the Transaction
Committee
The Transaction Committee welcomes Barrick’s
commitment that the existing employment rights, including pension
rights, of management and employees of the Acacia Group will be
safeguarded in accordance with contractual and statutory
requirements.
The Transaction Committee notes that: (i)
responsibility for the operational management of Acacia’s
operations will sit with Barrick’s regional team in Africa and the
Middle East; and (ii) Barrick expects to close Acacia’s existing
head office in London and intends to simplify Acacia’s corporate
office functions and remove any overlapping shared functions.
The Transaction Committee further notes that the
terms of the draft Transaction Documents provide: (i) that all
roles related to the TMCs’ Tanzanian operations currently carried
out from an office in Johannesburg will be relocated to Tanzania;
(ii) for the closure of the Johannesburg office; and (iii) for the
incorporation of a new management services company for the TMCs’
with its head office located in Mwanza, Tanzania.
Whilst regrettable, the Transaction Committee
recognises that in order to achieve the expected benefits of the
Acquisition, safeguard the interests of Acacia’s management and
employees in Tanzania and reach a negotiated settlement of Acacia’s
disputes with the GoT, operational and administrative restructuring
may be required following completion of the Acquisition.
However, the Transaction Committee additionally
notes that: (i) in respect of the matters referred to in paragraph
2 of this section headed “Response from the Transaction Committee”,
Barrick has confirmed that: (A) those changes are not expected to
result in material headcount reductions in respect of persons
currently employed as part of the Acacia Group; and (B) the
detailed plans for any rationalisation measures are not yet known
but the finalisation and implementation of any rationalisation
measures would be subject to comprehensive further analysis,
planning and appropriate engagement with affected members of staff,
in accordance with all relevant legal obligations; and (ii) in
respect of the matters referred to in paragraph 3 of this section
headed “Response from the Transaction Committee”, there is no
certainty that the Transaction Documents will be agreed with the
GoT and the terms of the final form of Transaction Documents, if
agreed, may differ from those summarised at Appendix 4.
Until such rationalisation measures have been
finalised and implemented and the Transaction Documents have been
agreed with the GoT, the Transaction Committee cannot be certain as
to the detailed steps for the expected restructuring and, in
particular, the full impact on employees and office locations of
the Acacia Group.
12. Acacia Share Plans
Participants in the Acacia Share Plans will be
contacted regarding the effect of the Acquisition on their rights
under these plans and provided with further details concerning the
proposals which will be made to them in due course. Details
of the proposals will be set out in the Scheme Document and in
separate letters to be sent to participants in the Acacia Share
Plans.
In connection with the Acacia Share Plans,
Acacia will exercise its discretion (as is its customary practice)
to procure that any awards under the Acacia Share Plans that vest
as a consequence of the Acquisition are settled in cash through the
next practicable payroll following the date on which the Scheme
becomes effective.
Under the proposals to be sent to participants
in the Acacia Share Plans:
Acacia Long-Term Incentive Plan
Awards under the Acacia Long-Term Incentive Plan
will vest on the Scheme Court Order in respect of a time pro-rated
portion of such awards to the extent the performance conditions are
satisfied as at the business day immediately prior to the date of
such Scheme Court Order.
Participants will also receive payments equal to
the amount of any Acacia Exploration Properties Special Dividends
and Deferred Cash Consideration Dividends paid to the Scheme
Shareholders, based (on a fully diluted basis) on the number of
Acacia Shares (if any) they would have received but for awards
being cash settled. Such payments will be made at the same time as
payments are made to Scheme Shareholders.
Acacia Deferred Share Unit Plan
Deferred Share Units (“DSUs”)
are held by non-executive directors of Acacia and entitle the
participant to receive some or all of their annual fees in the form
of a deferred right to a cash payment, payable only after the
participant ceases to hold office with Acacia. Broadly, cash
payments are calculated by reference to the fair market value of
Acacia Shares at the time of payment. Acacia will cash settle
DSUs for an amount calculated by reference to the implied
value of Acacia Shares under the terms of the Scheme at the date a
participant ceases to hold office (or, if later, on the Effective
Date) and by reference to the value of Barrick Shares on that
date. Holders of vested DSUs will also receive payments equal
to any Acacia Exploration Properties Special Dividends and Deferred
Cash Consideration Dividends paid to Scheme Shareholders, based on
the number of units (representing Acacia Shares) their awards
relate to. Such payments will be made at the same time as
payments are made to Scheme Shareholders.
13. Structure of and Conditions to the
Acquisition
It is intended that the Acquisition will be
implemented by way of a court-sanctioned scheme of arrangement
between Acacia and the Scheme Shareholders under Part 26 of the
Companies Act. The purpose of the Scheme is to provide for
Barrick to become the owner of the entire issued and to be issued
share capital of Acacia.
The procedure involves, among other things, the
requisite approval of (i) Scheme Shareholders in respect of the
Scheme and the Acquisition at the Court Meeting and (ii) Acacia
Shareholders in respect of the Special Resolution to implement the
Scheme at the General Meeting (as set out in further detail below)
being obtained to enable an application to be made by Acacia to the
Court to sanction the Scheme, pursuant to which the Scheme Shares
will be transferred to Barrick and the Scheme Shareholders will
receive the Consideration on the basis set out in paragraph 2 of
this Announcement.
The Scheme is subject to satisfaction (or, as
appropriate, waiver) of the Conditions and certain further terms
referred to in Appendix 1 to this Announcement and to the full
terms and conditions to be set out in the Scheme Document, and will
only become effective if, among other things, the following events
occur on or before the Longstop Date:
- a resolution to approve the Scheme is passed by a majority in
number of the Scheme Shareholders present and voting (and entitled
to vote) at the Court Meeting, either in person or by proxy,
representing not less than 75 per cent. of the voting rights of all
Scheme Shares voted;
- the Special Resolution necessary to implement the Scheme is
passed by the requisite majority of Acacia Shareholders at the
General Meeting (which will require the approval of Acacia
Shareholders representing at least 75 per cent. of the votes cast
at the General Meeting either in person or by proxy);
- the Scheme is sanctioned (with or without modification, on
terms agreed by Barrick and Acacia) by the Court;
- an office copy of the Scheme Court Order is delivered to the
Registrar of Companies;
- the New Barrick Shares are conditionally accepted for listing
on the NYSE and the Toronto Stock Exchange and such acceptances not
withdrawn; and
- the Acacia Mining Rights Condition and the Transaction
Documents Condition each as described below, are not invoked.
Upon the Scheme becoming effective, Barrick
intends to make a request to (i) the London Stock Exchange to
cancel trading in Acacia Shares on its main market for listed
securities; (ii) the FCA to cancel the listing of the Acacia Shares
from the Official List; and (iii) the Dar es Salaam Stock Exchange
to cancel the secondary listing of the Acacia Shares from the Dar
es Salaam Stock Exchange.
The Acacia Mining Rights Condition and the
Transaction Documents Condition are specifically drawn to the
attention of Scheme Shareholders. It is a condition of the
Acquisition that, following the date of this Announcement, there is
no withdrawal, cancellation, termination or modification of any
prospecting right or mining right, licence, permit, waiver or
concession held or used by any member of the Wider Acacia Group, or
of any mining development agreement to which any member of the
Wider Acacia Group is a party or otherwise bound, where such
withdrawal, cancellation, termination or modification is or might
be expected to be material in the context of the Wider Acacia Group
taken as a whole, and if a cancellation or termination has occurred
it has not been: (i) withdrawn, lifted or revoked in writing by the
relevant minister or official (or other relevant agency or organ of
government); or (ii) set aside, nullified or otherwise suspended by
the order of a court of competent jurisdiction, within 15 business
days of such cancellation or termination (or, if earlier, by the
date scheduled for the Court Meeting), and there is no notice or
intimation of any decision or intention to withdraw, cancel,
terminate or modify any of the same.
It is also a condition of the Acquisition that,
following the date of this Announcement, Barrick does not discover
that the GoT has decided not to continue discussions with a view to
finalising the Transaction Documents or to propose or request any
change or modification to any of the terms of the Transaction
Documents as summarised in Appendix 4 which is or might reasonably
be expected to be material in the context of the Wider Acacia Group
taken as a whole.
Barrick confirms that it considers the
circumstances described in the Acacia Mining Rights Condition and
the Transaction Documents Condition described above to be of
material significance to Barrick in the context of the Acquisition,
though it notes that these Conditions remain subject to the
application of Rule 13.5 of the Code.
Upon the Scheme becoming effective: (i) it will
be binding on all Scheme Shareholders, irrespective of whether or
not they attended or voted at the Court Meeting or the General
Meeting (and if they attended and voted, whether or not they voted
in favour); and (ii) share certificates in respect of Scheme Shares
will cease to be valid and entitlements to Scheme Shares held
within the CREST system will be cancelled.
Any Acacia Shares issued before the Scheme
Record Time will be subject to the terms of the Scheme. The
resolutions to be proposed at the General Meeting will, among other
things, provide that the Acacia Articles be amended to incorporate
provisions requiring any Acacia Shares issued after the Scheme
Record Time (other than to Barrick and/or its nominees) to be
automatically transferred to Barrick on the same terms as the
Acquisition (other than terms as to timings and formalities).
The provisions of the Acacia Articles (as amended) will avoid any
person (other than Barrick and its nominees) holding shares in the
capital of Acacia after the Effective Date.
If the Scheme does not become effective on or
before the Longstop Date, it will lapse and the Acquisition will
not proceed (unless the Panel otherwise consents).
It is expected that the Scheme Document,
containing further information about the Acquisition and notices of
the Court Meeting and General Meeting, together with the Forms of
Proxy, will be mailed to Acacia Shareholders and (for information
only) participants in the Acacia Share Plans and other persons with
information rights as soon as practicable. The Scheme
Document will also contain the expected timetable for the
Acquisition, specify the necessary actions to be taken by Acacia
Shareholders, and set out how Acacia Shareholders can hold, access
and trade the New Barrick Shares.
The Scheme will be governed by English law and
will be subject to the jurisdiction of the English courts and to
the conditions and further terms set out in this Announcement and
in the Scheme Document. The Acquisition and the Scheme will
be subject to the applicable requirements of the London Stock
Exchange, the FCA, the Code, the Panel, the Toronto Stock Exchange,
the NYSE and applicable securities laws in Canada and the United
States.
Subject to satisfaction or waiver of the
Conditions, the Acquisition is expected to be completed during Q4
2019.
14. Competition clearances
The Acquisition is conditional on receiving competition
clearance from the Tanzanian Fair Competition Commission and, to
the extent necessary, receiving an exclusion from the Competition
Authority of Kenya from the provisions of Part IV of the Kenyan
Competition Act, No 12 of 2010.
15. Delisting and re-registration of Acacia
Shares
It is intended that dealings in Acacia Shares
will be suspended at 5.00 p.m. (London time) on the business day
prior to the Effective Date. It is further intended that an
application will be made to the FCA for the cancellation of the
listing of the Acacia Shares on the premium segment of the Official
List and to the London Stock Exchange for the cancellation of
trading of the Acacia Shares on the London Stock Exchange’s main
market for listed securities, with effect as of, or shortly
following, the Effective Date. With respect to Acacia’s
secondary listing on the Dar Es Salaam Stock Exchange, it is
intended that, upon the application being made to the FCA as
detailed above, an application will also be made to the Dar es
Salaam Stock Exchange for the cancellation of the secondary listing
of the Acacia Shares on the Dar es Salaam Stock Exchange.
It is also intended that, following the Scheme
becoming effective, Acacia will be re-registered as a private
company under the relevant provisions of the Companies Act.
16. Fractional
entitlements and reduction for dividend, distribution or other
return of value
Fractions of New Barrick Shares will not be
issued to Scheme Shareholders. Instead, Scheme Shareholders
who would otherwise have received a fraction of a New Barrick Share
will instead receive an amount in cash rounded down to the nearest
cent, based on the amount obtained by multiplying such fraction by
the average Closing Price of Barrick Shares on the NYSE on each of
the five consecutive trading days ending on the trading day that is
two trading days prior to the Effective Date, except that
individual entitlements of less than US$5.00 will not be paid but
will be retained for the benefit of the Barrick Group.
Cash payments to Scheme Shareholders in respect
of fractional entitlements shall be made in Sterling other than to
Scheme Shareholders who have previously elected to receive
dividends in US Dollars and such election remains in place at the
Scheme Record Time. Such Scheme Shareholders will receive their
cash payment in US Dollars by converting the Sterling amount which
would be due pursuant to their fractional entitlement into US
Dollars using an exchange rate to be determined by Barrick.
Acacia does not intend to declare a divided
prior to the Effective Date. Without prejudice to the right of
Acacia Shareholders to receive Acacia Exploration Properties
Special Dividends and Deferred Cash Consideration Dividends (if
applicable) after the Effective Date, in the event that Acacia
announces a dividend, distribution or other return of value to
Shareholders on or after the date of this Announcement and prior to
the Effective Date, the Share for Share Exchange Ratio shall be
reduced by reference to the amount of such dividend, distribution
or other return of value. In such circumstances, Acacia
Shareholders will be entitled to retain any such dividend,
distribution or other return of value declared, made or paid.
17. Disclosure of interests in Acacia
relevant securities
Barrick and its concert parties are interested
in 262,246,950 Acacia Shares representing approximately 63.9 per
cent. of the issued share capital of Acacia.
Save for that interest, neither Barrick, nor any
of the directors of Barrick or any member of the Barrick Group,
nor, so far as the directors of Barrick are aware, any person
acting in concert with Barrick for the purposes of the Acquisition
had any interest in, right to subscribe for, or had borrowed or
lent any Acacia Shares or securities convertible or exchangeable
into Acacia Shares, nor did any such person have any short position
(whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any
agreement to sell or any delivery obligation or right to require
another person to take delivery, or any dealing arrangement of the
kind referred to in Note 11 of the definition of “acting in
concert” in the Code, in relation to Acacia Shares or in relation
to any securities convertible or exchangeable into Acacia
Shares.
18. Overseas Shareholders
The availability of the Acquisition and the
distribution of this Announcement to persons resident in, or
citizens of, or otherwise subject to, jurisdictions outside Canada,
the United States or the United Kingdom may be affected by the laws
of the relevant jurisdiction. Such persons should inform
themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction. Acacia Shareholders who
are in any doubt regarding such matters should consult an
appropriate independent professional adviser in the relevant
jurisdiction without delay.
This Announcement does not constitute an offer
for sale for any securities or an offer or an invitation to
purchase any securities. Acacia Shareholders are advised to
read carefully the Scheme Document and related Forms of Proxy once
these have been dispatched.
19. Documents published on a
website
Copies of the following documents will, by no
later than 12 noon (London time) on 22 July 2019, be published on
Acacia’s website at www.acaciamining.com and on Barrick’s website
at www.barrick.com until the Effective Date:
- this Announcement; and
- the irrevocable undertakings listed in Appendix 3 of this
Announcement.
20. General
The Acquisition will be subject to the
Conditions and certain further terms set out in Appendix 1 and the
further terms and conditions set out in the Scheme Document when
issued.
The bases and sources of certain financial
information contained in this Announcement are set out in Appendix
2. Appendix 3 contains details of the irrevocable undertakings
received by Barrick. Appendix 4 contains a summary of the material
terms of the current draft documentation under discussion (but not
yet finalised) with the GoT. Certain terms used in this
Announcement are defined in Appendix 5.
21. Enquiries
Barrick |
|
|
Kathy du PlessisInvestor and
Media Relations Telephone: +44 20 7557 7738Email:
barrick@dpapr.com |
|
|
Rothschild & Co (Financial Adviser to
Barrick) |
Hugo Dryland |
Telephone: +1 202 862
1660 |
|
Karina Danilyuk |
Telephone: +1 202 862
1660 |
|
Roger Ewart Smith |
Telephone: +44 20
7280 5000 |
|
Acacia |
Telephone: +44 (0) 20
7129 7150 |
|
Sally MarshakHead of Investor
Relations and Communications |
Telephone: +44
(0) 752 580 7953 |
|
Camarco |
Telephone: +44 (0) 20
3757 4980 |
|
|
|
|
Gordon Poole/Nick Hennis |
|
|
|
|
|
J.P. Morgan Cazenove (Joint Financial Adviser and Broker to
Acacia) |
Barry Weir |
Telephone: +44 (0) 20
7742 4000 |
|
James Robinson |
Telephone: +44 (0) 20
7742 4000 |
|
Dimitri Reading-Picopoulos |
Telephone: +44 (0) 20
7742 4000 |
|
RBC Capital
Markets (Joint Financial Adviser and Broker to Acacia)
|
Kevin Smith |
Telephone: +44 (0) 20
7653 4000 |
|
Paul Betts |
Telephone: +44 (0) 20
7653 4000 |
|
Vicky Liu |
Telephone: +44 (0) 20
7653 4000 |
|
Lazard & Co., Limited (Financial Adviser to the
Transaction Committee of Acacia) |
Spiro Youakim |
Telephone: +44 (0) 20
7187 2000 |
|
William Lawes |
Telephone: +44 (0) 20
7187 2000 |
|
Gustavo Plenge |
Telephone: +44 (0) 20
7187 2000 |
|
Norton Rose Fulbright LLP are retained as legal advisers for
Barrick.
Shearman & Sterling (London) LLP are
retained as legal advisers for Acacia.
Further information
This Announcement is for information purposes
only and is not intended to and does not constitute, or form part
of, an offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Acquisition or
otherwise, nor shall there be any sale, issuance or transfer of
securities of Acacia in any jurisdiction in contravention of
applicable law. Subject to the right of Barrick, with the
consent of the Panel, to implement the Acquisition by way of a
Takeover Offer, the Acquisition will be implemented solely by means
of the Scheme Document, which will contain the full terms and
conditions of the Acquisition including details of how to vote in
respect of the Scheme. Any vote in respect of the Scheme or
other responses in relation to the Acquisition, should be made only
on the basis of the information contained in the Scheme
Document.
Please be aware that addresses, electronic
addresses and certain other information provided by Acacia
Shareholders, persons with information rights and other relevant
persons for the receipt of communications from Acacia may be
provided to Barrick during the offer period as required under
Section 4 of Appendix 4 of the Code to comply with Rule
2.11(c).
Rothschild & Co, which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively
as financial adviser to Barrick and no one else in connection with
the Acquisition, this Announcement and the matters described
herein, and shall not be responsible to anyone other than Barrick
for providing the protections afforded to clients of Rothschild
& Co or for providing advice in connection with the
Acquisition, this Announcement or any matter referred to
herein. Neither Rothschild & Co nor any of its
subsidiaries, branches or 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 Rothschild & Co in connection
with the Acquisition, this Announcement or any matter referred to
herein.
J.P. Morgan Securities plc, which conducts its
United Kingdom investment banking business as J.P. Morgan Cazenove
(“J.P. Morgan Cazenove”), is authorised in the United Kingdom by
the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential
Regulation 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 set out 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 in this Announcement.
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 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 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.
Overseas jurisdictions
The release, publication or distribution of this
Announcement in or into jurisdictions other than Canada, the United
States and the United Kingdom may be restricted by law and
therefore any persons who are subject to the law of any
jurisdiction other than Canada, the United States and the United
Kingdom should inform themselves about, and observe, any applicable
legal or regulatory requirements. In particular the ability
of persons who are not citizens of and resident in Canada, the
United States or the United Kingdom or who are subject to the laws
of another jurisdiction, to vote their Acacia Shares with respect
to the Scheme at the Court Meeting, or to appoint another person as
proxy to vote at the Court Meeting on their behalf, may be affected
by the laws of the relevant jurisdictions in which they are located
or of which they are citizens. Any failure to comply with the
applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. Relevant clearances
have not been, and will not be, obtained from the securities
commission or similar regulatory authority of any province or
territory of Canada. To the fullest extent permitted by
applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person. This
Announcement has been prepared for the purposes of complying with
applicable English law, certain applicable securities law in Canada
and the United States, the Listing Rules, the rules of the London
Stock Exchange and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside of the UK.
Copies of this Announcement and formal
documentation relating to the Acquisition will not be and must not
be, mailed or otherwise forwarded, distributed or sent in, into or
from any Restricted Jurisdiction or any jurisdiction where to do so
would violate the laws of that jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. Doing so may render
invalid any related purported vote in respect of the Acquisition.
Each Acacia Shareholder is urged to consult their independent
advisers regarding the legal, tax and financial consequences of the
Acquisition. If the Acquisition is implemented by way of a Takeover
Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made, directly or
indirectly, in or into or by use of the mails or any other means or
instrumentality (including, without limitation, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of any Restricted Jurisdiction and the Takeover
Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Overseas
Shareholders will be contained in the Scheme Document and Acacia
Shareholders are advised to read carefully the Scheme Document and
related Forms of Proxy once these have been mailed.
Additional information for US
investors
The Acquisition is being made to acquire the
securities of a UK company by means of a scheme of arrangement
provided for under English company law. Any securities issued
as a result of this Acquisition by means of a scheme of arrangement
will be issued in reliance upon the exemption from the registration
requirements of the US Securities Act of 1933 set forth in Section
3(a)(10) thereof, and will not be subject to the proxy solicitation
and tender offer rules promulgated under the US Securities Exchange
Act of 1934. Accordingly, the Scheme will be subject to
disclosure requirements and practices applicable in the UK to
schemes of arrangement, which are different from the disclosure
requirements of the US federal securities laws. Except in
relation to non-GAAP financial performance measures, the financial
information included in this Announcement and the Scheme
documentation has been or will have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) and thus
may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US (“US
GAAP”). If Barrick exercises its right to implement the
acquisition of the Acacia Shares by way of a Takeover Offer, such
offer will be made in compliance with applicable US laws and
regulations, including the registration requirements of the US
Securities Act of 1933 and the tender offer rules under the US
Securities Exchange Act of 1934.
Barrick’s and Acacia’s mineral reserves and
mineral resources have been estimated in accordance with National
Instrument 43-101 – Standards of Disclosure for Mineral Projects,
as required by Canadian securities regulatory authorities.
For United States reporting purposes, Industry Guide 7 (under the
US Securities Exchange Act of 1934), as interpreted by the Staff of
the SEC, applies different standards in order to classify
mineralization as a reserve. In addition, while the terms
“measured,” “indicated” and “inferred” mineral resources are
required pursuant to National Instrument 43-101 – Standards of
Disclosure for Mineral Projects, the SEC does not recognize such
terms. Canadian standards differ significantly from the
requirements of the SEC, and mineral resource information contained
herein and in the documents incorporated herein by reference is not
comparable to similar information regarding mineral reserves
disclosed in accordance with the requirements of the SEC. However,
for United States reporting purposes, the SEC has adopted
amendments to its disclosure rules to modernize the mineral
property disclosure requirements for issuers whose securities are
registered with the SEC under the U.S. Securities Exchange Act
of 1934, which amendments became effective
February 25, 2019 with compliance required for the first
fiscal year beginning on or after January 1, 2021. The SEC’s
rule amendments replace the historical property disclosure
requirements for mining registrants that were included in Industry
Guide 7 and recognize estimates of “measured mineral
resources”, “indicated mineral resources” and “Inferred Mineral
Resources”. In addition, the SEC has amended its definitions of
“proven mineral reserves” and “probable mineral reserves” to be
“substantially similar” to the corresponding definitions required
in National Instrument 43-101. Investors should understand
that “inferred” mineral resources have a great amount of
uncertainty as to their existence and as to their economic and
legal feasibility. In addition, investors are cautioned not
to assume that any part or all of any mineral resources constitute
or will be converted into reserves. Accordingly, information
contained in this Announcement and in the documents incorporated by
reference herein containing descriptions of Barrick’s and Acacia’s
mineral deposits may not be comparable to similar information made
public by United States companies subject to the reporting
requirements of United States federal securities laws and the rules
and regulations thereunder.
US Holders of Acacia Shares also should be aware
that the transaction contemplated herein may have tax consequences
under the United States tax laws and, that such consequences, if
any, are not described herein. US Holders are urged to
consult with independent professional advisors regarding the legal,
tax and financial consequences of the Acquisition applicable to
them.
It may be difficult for US Holders to enforce
their rights and claims arising out of the US federal securities
laws, since Barrick and Acacia are located in countries other than
the US, and some or all of their officers and directors may be
residents of countries other than the US. US Holders may not
be able to sue a non-US company or its officers or directors in a
non US court for violations of US securities laws. Further,
it may be difficult to compel a non-US company and its affiliates
to subject themselves to a US court’s judgment.
In accordance with normal UK practice, Barrick
or its nominees, or its brokers (acting as agents), may from time
to time make certain purchases of, or arrangements to purchase,
Acacia Shares, other than pursuant to the Acquisition, until the
date on which the Acquisition and/or Scheme becomes effective,
lapses or is otherwise withdrawn. These purchases may occur
either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the UK, will be reported
to a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com.
Additional information for Canadian
investors
The enforcement by Canadian Holders of civil
liabilities under the Canadian securities laws may be affected
adversely by the fact that Acacia is incorporated or organized
under the laws of a jurisdiction other than Canada, that some or
all of Barrick’s and Acacia’s officers and directors are and will
be residents of countries other than Canada, that some or all of
the experts named in this Announcement may be residents of
countries other than Canada, and that all or a substantial portion
of the assets of Barrick, Acacia and such persons are and will be
located outside Canada. As a result, it may be difficult or
impossible for Canadian Holders to effect service of process within
Canada upon Acacia, Barrick’s and Acacia’s respective officers or
directors or the experts named herein, or to realize against them,
upon judgements of the court of Canada predicated upon liabilities
under Canadian securities laws. In addition, Canadian Holders
should not assume that the courts of England and Wales: (a) would
enforce judgments of Canadian courts obtained in actions against
such persons predicated upon civil liabilities under Canadian
securities laws; or (b) would enforce, in original actions,
liabilities against such persons predicated upon civil liabilities
under the Canadian securities laws.
The distribution of the New Barrick Shares
pursuant to the Acquisition will constitute a distribution of
securities that is exempt from the prospectus requirements of
Canadian securities law and is exempt from or otherwise is not
subject to the registration requirements under applicable
securities law. The New Barrick Shares received pursuant to
the Acquisition will not be legended and may be resold through
registered dealers in each of the provinces and territories of
Canada provided that (i) the trade is not a “control distribution”
as defined in Canadian securities law, (ii) no unusual effort is
made to prepare the market or to create a demand for Barrick
Shares, (iii) no extraordinary commission or consideration is paid
to a person in respect of such sale, and (iv) if the selling
security holder is an insider or officer of Barrick, as the case
may be, the selling security holder has no reasonable grounds to
believe that Barrick is in default of applicable Canadian
securities law.
Canadian Holders should be aware that the
Acquisition described in this Announcement may have tax
consequences in Canada and should consult their own tax advisors to
determine the particular tax consequences to them of the
Acquisition in light of their particular circumstances, as well as
any tax consequences that may arise under the laws of any other
relevant foreign, state, local or other taxing jurisdiction.
Cautionary statement on forward-looking
statements
This Announcement (including information
incorporated by reference in this Announcement) contains statements
which are, or may be deemed to be, “forward-looking
statements”. Forward-looking statements are prospective in
nature and are not based on historical facts, but rather on current
expectations and projections of the management of Barrick and
Acacia about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially
from the future results expressed or implied by the forward-looking
statements. The forward-looking statements contained in this
Announcement include statements relating to: (i) the expected
effects of the Acquisition on Barrick and Acacia including with
respect to future growth, results of operations, performance,
business prospects and opportunities of Barrick and Acacia; (ii)
the expected timing and scope of the Acquisition; (iii) the
integration of Acacia’s business with the existing operations of
Barrick; (iv) the impact of the Acquisition on the financial
position of Barrick and Acacia; (v) the expected terms and timings
of any agreement which may be reached with the Government of
Tanzania, including in connection with the settlement of disputes
between the Acacia Group and the Government of Tanzania, and the
application of Tanzanian Laws and regulations to the members and
operations of the Acacia Group in Tanzania (including as regards
the taxation of such members and operations) and the terms of
mineral development agreements and other contracts between members
of the Acacia Group and the Government of Tanzania; (vi) and the
outlook for Barrick’s and Acacia’s respective businesses and the
gold mining industry generally based on information currently
available and (vii) other statements other than current or
historical facts. These expectations may not be appropriate
for other purposes. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words
such as “plans”, “expects” or “does not expect”, “is expected”, “is
subject to”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “implies”, “possible”, “proposes”, “seeks”, “
anticipates” or “does not anticipate”, or “believes”, or variations
of such words and phrases or statements that certain actions,
events or results “may”, “could”, “should”, “can”, “would”, “might”
or “will” be taken, occur or be achieved. Although Barrick
and Acacia believe that the expectations in relation to their
respective businesses reflected in such forward-looking statements
are reasonable in light of management’s experience and perception
of current conditions and expected developments, neither Barrick
nor Acacia can give any assurance that such expectations will prove
to be correct as they are inherently subject to significant
business, economic and competitive uncertainties and
contingencies. By their nature, forward-looking statements
involve risk and uncertainty because they are based upon a number
of estimates and assumptions and they relate to events and depend
on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by such
forward-looking statements. These factors include the
satisfaction of the Conditions and the ability to consummate the
Acquisition; the anticipated timing for completion; future
post-Acquisition plans, business prospects and performance, growth
potential, financial strength, market profile, revenues, working
capital, capital expenditures, investment valuations, income,
margins, access to capital and overall strategy; the ability to
agree definitive terms of the mineral development agreements and
other contracts between members of the Acacia Group and the
Government of Tanzania and the satisfaction of any conditions to
completion of such agreements and other contracts; expectations
regarding the receipt of any necessary regulatory and third party
approvals and the expiration of all relevant waiting periods; the
anticipated benefits of the Acquisition; the anticipated mineral
reserves of Barrick following completion of the Acquisition;
expenses of the Acquisition; as well as additional factors, such
as: risks relating to the Acacia Group’s credit rating; local and
global political and economic conditions; the Acacia Group’s
economic model and liquidity risks; fluctuations in the spot and
forward price of gold, copper, or certain other commodities (such
as silver, diesel fuel, natural gas, and electricity);the
speculative nature of mineral exploitation and development;
financial services risk; the risks associated with Acacia’s brand,
reputation and trust; environmental risks; safety and technology
risks; changes in the financial markets; the potential impact of
the announcement or consummation of the Acquisition on
relationships, including with employees, suppliers, customers and
competitors; changes in mineral production performance,
exploitation, and exploration successes; diminishing quantities or
grades of reserve; risks that exploration data may be incomplete
and considerable additional work may be required to complete future
evaluation, including but not limited to drilling, engineering and
socioeconomic studies and investment; risk of loss due to acts of
war, terrorism, sabotage and civil disturbances; increased costs,
delays, suspensions and technical challenges associated with
construction of capital project; the duration of the Tanzanian ban
on mineral concentrate exports; the ultimate terms of any
definitive agreement to resolve the dispute relating to the
imposition of the concentrate export ban and allegations by the
Government of Tanzania that Acacia under-declared the mineral
content of concentrate exports from Tanzania and other related
matters; operating or technical difficulties in connection with
mining or development activities, including geotechnical challenges
and disruptions in the maintenance or provision of required
infrastructure and information technology systems; failure to
comply with environmental and health and safety laws and
regulations; timing of receipt of, or failure to comply with,
necessary notices, concessions, permits and approvals; the impact
of global liquidity and credit availability on the timing of cash
flows and the values of assets and liabilities based on projected
future cash flows; adverse changes in our credit ratings; the
impact of inflation; fluctuations in the currency markets; changes
in national and local government legislation, taxation, controls or
regulations and/ or changes in the administration of laws, policies
and practices, expropriation or nationalization of property and
political or economic developments in Tanzania and other
jurisdictions in which the offeree company or its affiliates do or
may carry on business in the future; lack of certainty with respect
to foreign legal systems, corruption and other factors that are
inconsistent with the rule of law; damage to the offeree company’s
reputation due to the actual or perceived occurrence of any number
of events, including negative publicity with respect to the offeree
company’s handling of environmental matters or dealings with
community groups, whether true or not; the possibility that future
exploration results will not be consistent with the offeree
company’s expectations; litigation and legal and administrative
proceedings; contests over title to properties, particularly title
to undeveloped properties, or over access to water, power and other
required infrastructure; business opportunities that may be
presented to, or pursued by, the offeree company; our ability to
successfully integrate acquisitions or complete divestitures; risks
associated with working with partners in jointly controlled assets;
employee relations including loss of key employees; increased costs
and physical risks, including extreme weather events and resource
shortages, related to climate change; availability and increased
costs associated with mining inputs and labour. In addition,
there are risks and hazards associated with the business of mineral
exploration, development and mining, including environmental
hazards, industrial accidents, unusual or unexpected formations,
pressures, cave-ins, flooding and gold bullion, copper cathode or
gold or copper concentrate losses (and the risk of inadequate
insurance, or inability to obtain insurance, to cover these
risks). Other unknown or unpredictable factors could cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements
should therefore be construed in the light of such factors.
Neither Barrick nor Acacia, nor any of their respective associates
or directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this Announcement
will actually occur. You are cautioned not to place undue
reliance on these forward-looking statements. Readers are
cautioned that forward-looking statements are not guarantees of
future performance. Specific reference is made to the most
recent Form 40- F/Annual Information Form on file with the SEC and
Canadian provincial securities regulatory authorities for a more
detailed discussion of some of the factors underlying
forward-looking statements and the risks that may affect Barrick’s
ability to achieve the expectations set forth in the
forward-looking statements contained in this press release.
Other than in accordance with their legal or
regulatory obligations (including under the Listing Rules and the
Disclosure and Transparency Rules of the FCA), neither Barrick nor
Acacia is under any obligation, and Barrick and Acacia expressly
disclaim any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No profit forecasts or quantified
financial benefits statement
No statement in this Announcement is intended as
a profit forecast, profit estimate or quantified financial benefits
statement.
Dealing disclosure
requirements
Under Rule 8.3(a) of the Code, any person who is
interested in 1% or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain
details of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s).
An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the
10th business day following the commencement of the offer period
and, if appropriate, by no later than 3.30 pm (London time) on the
10th business day following the announcement in which any
securities exchange offeror is first identified. Relevant
persons who deal in the relevant securities of the offeree company
or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who
is, or becomes, interested in 1% or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details
of the dealing concerned and of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to
an agreement or understanding, whether formal or informal, to
acquire or control an interest in relevant securities of an offeree
company or a securities exchange offeror, they will be normally
deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made
by the offeree company and by any offeror and Dealing Disclosures
must also be made by the offeree company, by any offeror and by any
persons acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in
respect of whose relevant securities Opening Position Disclosures
and Dealing Disclosures must be made can be found in the Disclosure
Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
The defined terms used in this section "Dealing
disclosure requirements" are defined in the Code which can be found
on the Takeover Panel's website.
Publication on website
A copy of this Announcement and the documents
required to be published by Rule 26 of the Code will be made
available (subject to certain restrictions relating to persons
resident in Restricted Jurisdictions) on Barrick’s website at
www.barrick.com and Acacia’s website at www.acaciamining.com by no
later than 12 noon (London time) on the business day following the
date of this Announcement in accordance with Rule 26.1(a) of the
Code. The content of the websites referred to in this
Announcement are not incorporated into and do not form part of this
Announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code,
Barrick Shareholders and Acacia Shareholders may request a hard
copy of this Announcement by contacting Computershare Investor
Services PLC during business hours at +44 (0) 370 707 1895 or by
submitting a request in writing to Computershare Investor Services
PLC, Corporate Actions Team, The Pavilions, Bridgwater Road,
Bristol, BS99 6ZZ. If you have received this Announcement in
electronic form, copies of this Announcement and any document or
information incorporated by reference into this document will not
be provided unless such a request is made.
Appendix 1 Conditions
and Certain Further Terms of the Scheme and the
Acquisition
A. Conditions to the
Scheme and Acquisition
1. The Acquisition is conditional upon the
Scheme becoming unconditional and becoming effective, subject to
the provisions of the Code, by no later than the Longstop Date.
Scheme approval
2. The Scheme is conditional upon:
- approval of the Scheme at the Court Meeting (or at any
adjournment thereof, provided that the Court Meeting may not be
adjourned beyond the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document in due course or such
later date (if any) as Barrick and Acacia may agree and the Court
may allow) by a majority in number of the Scheme Shareholders
present and voting, either in person or by proxy, representing not
less than 75 per cent. in value of Scheme Shares held by those
Scheme Shareholders;
- all resolutions in connection with or required to approve and
implement the Scheme as set out in the notice of the General
Meeting (including, without limitation, the Special Resolution)
being duly passed by the requisite majority at the General Meeting
(or at any adjournment thereof, provided that the General Meeting
may not be adjourned beyond the 22nd day after the expected date of
the General Meeting to be set out in the Scheme Document in due
course or such later date (if any) as Barrick and Acacia may agree
and the Court may allow); and
- the sanction of the Scheme without modification or with
modification on terms acceptable to Barrick and Acacia (provided
that the Scheme Court Hearing may not be adjourned beyond the 22nd
day after the expected date of the Scheme Court Hearing to be set
out in the Scheme Document in due course or such later date (if
any) as Barrick and Acacia may agree and the Court may allow) and
the delivery of the Scheme Court Order to the Registrar of
Companies.
In addition, the Scheme is also conditional upon
the following Conditions and, accordingly, the necessary actions to
make the Scheme effective (including delivery of the Scheme Court
Order to the Registrar of Companies) will not be taken unless such
Conditions (as amended, if appropriate) have been satisfied or,
where relevant, waived.
New Barrick Share listings
3. In respect of the New Barrick
Shares:
- confirmation having been received by Barrick from the NYSE that
the New Barrick Shares have been conditionally accepted for
listing, subject to official notice of issuance, on the NYSE (and
such acceptance not having been withdrawn);
- confirmation having been received by Barrick that the New
Barrick Shares have been conditionally accepted for listing,
subject only to satisfaction of customary conditions of the Toronto
Stock Exchange, on the Toronto Stock Exchange (and such acceptance
not having been withdrawn); and
- in the event the Acquisition is, with the consent of the Panel,
implemented by way of a Takeover Offer, absent an available
exemption from the registration requirements of the U.S.
Securities Act, a registration statement under the U.S. Securities
Act having been declared effective by the SEC and no stop order
having been issued or proceedings for suspension of the
effectiveness of the Registration Statement having been initiated
by the SEC.
Competition clearances
4. Without limitation to Condition 5
below, all and any filings and/or approvals or applications for
exclusion for the Acquisition that may be required under:
- the Tanzanian Fair Competition Act, No. 8 of 2003 have been
duly made to the Tanzanian Fair Competition Commission and
clearance obtained and that any such clearance, approval and/or
exclusion; and
- the Kenyan Competition Act, No.12 of 2010 (as amended) have
been duly made to the Competition Authority of Kenya and, to the
extent necessary, a confirmation of exclusion and of the
Acquisition from Kenyan merger filing obligations obtained,
and that any such clearances, approvals and/or
exclusions shall remain in force and have not been revoked.
General Third Party
clearances
5. All notifications to and filings with,
Third Parties which are necessary or are reasonably considered
appropriate or desirable by Barrick and Acacia having been made,
all applicable waiting and other time periods (including any
extensions of such waiting and other time periods) under any
applicable legislation or regulation of any relevant jurisdiction
having expired, lapsed or been terminated (as applicable) and all
statutory or regulatory obligations in any relevant jurisdiction
having been complied with in each case in connection with the
Scheme or Acquisition or the acquisition or proposed acquisition of
any shares or other securities in, or control or management of,
Acacia or any other member of the Wider Acacia Group by any member
of the Wider Barrick Group, or the carrying on by any member of the
Wider Acacia Group of any material aspect of its business.
6. No Third Party having given notice that
it has decided to, or that it is considering deciding to, take,
institute, assert, implement or threaten any demand, request,
action, proceeding, suit, investigation, enquiry or reference or
enacted, made or proposed any statute, regulation, decision or
order or having taken any other steps or required any action to be
taken or otherwise having done anything (including making or
asserting any demand, claim or request for any fee, tax, levy,
charge, impost or payment of any nature) which would or might
reasonably be expected to:
- make the Scheme or the Acquisition or, in each case, its
implementation or the acquisition or proposed acquisition by
Barrick or any member of the Wider Barrick Group of any shares or
other securities in, or control or management of, Acacia or any
member of the Wider Acacia Group void, illegal or unenforceable in
any jurisdiction, or otherwise directly or indirectly restrain,
prevent, prohibit, restrict or materially delay the same or impose
additional material conditions or obligations with respect to the
Scheme or the Acquisition or such acquisition, or otherwise
materially impede, challenge or interfere with the Scheme or
Acquisition or such acquisition, or require any material amendment
to the terms of the Scheme or Acquisition or the acquisition or
proposed acquisition of any Acacia Shares or the acquisition of
control or management of Acacia or the Wider Acacia Group by
Barrick or any member of the Wider Barrick Group;
- materially limit or delay, or impose any limitations on, the
ability of any member of the Wider Barrick Group to acquire or to
hold or to exercise effectively, directly or indirectly, all or any
rights of ownership in respect of shares or other securities in
Acacia or any member of the Wider Acacia Group, or on the ability
of any member of the Wider Acacia Group or the Wider Barrick Group
to exercise voting or management control over, any member of the
Wider Acacia Group;
- require, prevent, delay or impose obligations or restrictions
on any divestiture by any member of the Wider Barrick Group of any
shares or other securities in any member of the Wider Barrick Group
or any member of the Wider Acacia Group or require or impose any
obligation on any member of the Wider Barrick Group or any member
of the Wider Acacia Group to make a public offer in respect of, or
issue or transfer to any person or third party (including any
member of the public), any shares or other securities or economic
participation rights in any member of the Wider Barrick Group or
the Wider Acacia Group, or list any such shares or other securities
or economic participation rights on any stock exchange, or
otherwise adversely impact the ownership or control by any member
of the Wider Barrick Group or Wider Acacia Group of an asset that
is material to the Wider Acacia Group taken as a whole;
- require, prevent, delay or impose obligations or restrictions
on any divestiture by any member of the Wider Barrick Group or by
any member of the Wider Acacia Group of all or any portion of their
respective businesses, assets or properties or restrain, prevent,
prohibit, restrict or materially limit the ability of any of them
to conduct any of their respective businesses or to own or control
any of their respective assets or properties or any part thereof
(including as a result of or through the withdrawal, cancellation,
termination or revocation of any material agreements, mining
rights, licences, permits, waivers or concessions of or held or
used by any member of the Wider Barrick Group or the Wider Acacia
Group);
- except pursuant to sections 974 to 991 of the Companies Act,
require any member of the Wider Barrick Group or of the Wider
Acacia Group to acquire, or to offer to acquire, any shares or
other securities (or the equivalent) in any member of the Wider
Acacia Group owned by any third party (other than in connection
with the implementation of the Acquisition);
- materially limit the ability of any member of the Wider Barrick
Group or of the Wider Acacia Group to conduct or integrate or
coordinate its business, or any part of it, with the businesses or
any part of the businesses of any other member of the Wider Barrick
Group or the Wider Acacia Group;
- result in any member of the Wider Acacia Group or the Wider
Barrick Group ceasing to be able to carry on business under any
name under which it presently does so;
- result in any payments (including any fee, tax, levy, charge,
impost or payment of any other nature) to a Third Party by any
member of the Wider Acacia Group or the Wider Barrick Group, or any
of their respective shareholders, which payments, in aggregate, are
material to the Wider Acacia Group; or
- otherwise materially adversely affect any or all of the
business, assets, profits, financial or trading position or
prospects of any member of the Wider Acacia Group or of the Wider
Barrick Group,
and all applicable waiting and other time
periods during which any Third Party could decide to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or take any other step or
require any action to be taken or otherwise having done anything
under the laws of any relevant jurisdiction in respect of the
Acquisition having expired, lapsed or been terminated.
7. All Authorisations which are necessary
or are reasonably considered necessary or appropriate by Barrick in
any relevant jurisdiction for or in respect of the Scheme or
Acquisition or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of, Acacia
or any other member of the Wider Acacia Group by any member of the
Wider Barrick Group or the carrying on by any member of the Wider
Acacia Group of its business having been obtained, in terms and in
a form satisfactory to Barrick, from all appropriate Third Parties
or from any persons or bodies with whom any member of the Wider
Acacia Group has entered into contractual arrangements and all such
Authorisations remaining in full force and effect and there being
no notice or intimation of any intention to revoke, suspend,
restrict, modify or not to renew any of the same.
No cancellation of Acacia mining
rights
8. There having been no withdrawal,
cancellation, termination or modification of any prospecting right
or mining right, licence, permit, waiver or concession held or used
by any member of the Wider Acacia Group, or of any mining
development agreement to which any member of the Wider Acacia Group
is a party or otherwise bound, where such withdrawal, cancellation,
termination or modification is or might reasonably be expected to
be material in the context of the Wider Acacia Group taken as a
whole, and if a cancellation or termination has occurred it has not
been: (i) withdrawn, lifted or revoked in writing by the relevant
minister or official (or other relevant agency or organ of
government); or (ii) set aside, nullified or otherwise suspended by
the order of a court of competent jurisdiction, within 15 business
days of such cancellation or termination (or, if earlier, by the
date scheduled for the Court Meeting), and there having been no
notice or intimation of any decision or intention to withdrawn,
cancel, terminate or modify any of the same.
Certain matters arising as a result of
any arrangement, agreement etc.
9. Except as Disclosed, there being no
provision of any arrangement, agreement, licence, lease, permit,
franchise or other instrument to which any member of the Wider
Barrick Group or the Wider Acacia Group is a party, or by or to
which any such member or any of its assets is or are or may be
bound, entitled or subject or any circumstance, which, in each case
as a consequence of the Scheme or Acquisition or the acquisition or
proposed acquisition of any shares or other securities in, or
control of, Acacia or any other member of the Wider Acacia Group by
any member of the Wider Barrick Group or otherwise, would
reasonably be expected to result in (in any case to an extent which
would reasonably be expected to be material and adverse in the
context of the Wider Acacia Group, taken as a whole):
- any monies borrowed by or any other indebtedness or liabilities
(actual or contingent) of, or any grant available to, any member of
the Wider Acacia Group being or becoming repayable or capable of
being declared repayable immediately or prior to its stated
maturity date or repayment date or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or becoming capable of being withdrawn or inhibited;
- the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property, assets or interests of any member of the Wider Acacia
Group or any such mortgage, charge or other security interest
(wherever created, arising or having arisen) becoming
enforceable;
- any such arrangement, agreement, licence, permit, franchise or
other instrument, or the rights, liabilities, obligations or
interests of any member of the Wider Acacia Group thereunder,
being, or becoming capable of being, terminated or adversely
modified or affected or any adverse action being taken or any
obligation or liability arising thereunder;
- any asset or interest of any member of the Wider Acacia Group
being or falling to be disposed of or charged or ceasing to be
available to any member of the Wider Acacia Group or any right
arising under which any such asset or interest could be required to
be disposed of or could cease to be available to any member of the
Wider Acacia Group otherwise than in the ordinary course of
business;
- any member of the Wider Acacia Group ceasing to be able to
carry on business under any name under which it presently does
so;
- the creation or acceleration of liabilities (actual or
contingent) by any member of the Wider Acacia Group other than in
the ordinary course of business;
- the rights, liabilities, obligations or interests of any member
of the Wider Barrick Group or the Wider Acacia Group under any such
arrangement, agreement, licence, lease, permit, franchise or other
instrument or the interests or business of any such member in or
with any other person, firm, company or body (or any arrangement or
arrangements relating to any such interests or business) being
terminated or adversely modified or affected or any onerous
obligations or liability arising or any adverse action being taken
thereunder; or
- the value of, or the financial or trading position of any
member of the Wider Acacia Group being prejudiced or adversely
affected,
and no event having occurred which, under any
provision of any such arrangement, agreement, licence, permit or
other instrument, would reasonably be expected to result in any of
the events or circumstances which are referred to in
paragraphs (a) to (h) of this Condition 9.
10. Since 31 December 2018 and except as
Disclosed and except as between any of Acacia and its wholly owned
subsidiaries, no member of the Wider Acacia Group having (in any
case to an extent which is or would be material in the context of
the Wider Acacia Group, taken as a whole):
- issued or agreed to issue, or authorised the issue of,
additional shares of any class, or securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for
or acquire, any such shares or convertible securities or
transferred or sold any shares out of treasury, other than any
shares issued or shares transferred from treasury upon the exercise
of any options granted under any of the Acacia Share Plans;
- purchased or redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or made any other change to any part of its share
capital;
- recommended, declared, paid or made any dividend or other
distribution whether payable in cash or otherwise or made any bonus
issue;
- made or authorised any change in its loan capital;
- (other than any acquisition or disposal in the ordinary course
of business) merged with, demerged or acquired any body corporate,
partnership or business or acquired or disposed of or transferred,
mortgaged, charged or created any security interest over any assets
or any right, title or interest in any assets (including shares in
any undertaking and trade investments) or authorised, proposed or
announced any intention to do so;
- except in the ordinary course of business, issued, authorised
or proposed, or announced an intention to authorise, the issue of,
or made any change in or to, any debentures or incurred or
increased any indebtedness or liability (actual or
contingent);
- entered into, varied, or authorised any agreement, transaction,
arrangement or commitment (whether in respect of capital
expenditure or otherwise) which:i. is of a long term, onerous or
unusual nature or magnitude or which involves an obligation of such
nature or magnitude; orii. could restrict the business of any
member of the Wider Acacia Group; oriii. is other than in the
ordinary course of business;
- entered into, implemented, effected or authorised any merger,
demerger, reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement in respect of itself or another member
of the Wider Acacia Group;
- entered into or varied the terms of, or made any offer (which
remains open for acceptance) to enter into or vary the terms of,
any contract, agreement, arrangement or commitment with any of the
directors or senior executives of any member of the Wider Acacia
Group;
- had any monies borrowed by, or any other indebtedness (whether
actual or contingent) of, or any grant available to, any member of
the Wider Acacia Group declared repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or had the ability of any such
member of the Wider Acacia Group to borrow monies or incur any
indebtedness withdrawn or inhibited or being capable of becoming or
being withdrawn or inhibited;
- been subject to the enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any member of the Wider Acacia Group or any
such mortgage, charge or other security interest (whenever created,
arising or having arisen) having become enforceable;
- taken any corporate action or had any legal proceedings
instituted or threatened against it in relation to the suspension
of payments or a moratorium of any indebtedness, or having had any
petition presented or order made for its winding up (voluntarily or
otherwise), dissolution or reorganisation or for the appointment of
a receiver, administrator, manager, administrative receiver,
trustee or similar officer of all or any material part of its
assets and revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed;
- been or become unable, or admitted in writing that it is
unable, to pay its debts or having stopped or suspended (or
threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part
of its business;
- waived, compromised or settled any claim, otherwise than in the
ordinary course of business;
- made any alteration to its memorandum or articles of
association;
- (except in relation to changes made or agreed as a result of,
or arising from, legislation or changes to legislation) made or
agreed or consented to:i. any change: A. to the terms
of the trust deeds constituting the pension scheme(s) established
for its directors, employees or their dependants; or B.
the contributions payable to any such scheme(s) or to the benefits
which accrue or to the pensions which are payable thereunder;
or C. the basis on which qualification for, or accrual
or entitlement to such benefits or pensions are calculated or
determined; or D. the basis upon which the liabilities
(including pensions) or such pension schemes are funded, valued or
made, orii. any change to the trustees including the appointment of
a trust corporation;
- proposed, agreed to provide or modified the terms of any share
option scheme, incentive scheme or other benefit relating to the
employment or termination of employment of any person employed by
the Wider Acacia Group; or
- entered into any agreement, contract, commitment or arrangement
or passed any resolution or made any offer (which remains open for
acceptance) or proposed or announced any intention with respect to
any of the transactions, matters or events referred to in this
Condition 10.
No adverse change, litigation or
regulatory enquiry
11. Since 31 December 2018 and except as
Disclosed in any case to an extent which is or would be material in
the context of the Wider Acacia Group, taken as a whole):
- there having been no adverse change and no circumstances having
arisen which would or might reasonably be expected to result in an
adverse change, or deterioration in the business, assets, financial
or trading positions or profit or prospects of any member of the
Wider Acacia Group;
- no contingent or other liability of any member of the Wider
Acacia Group having arisen or become apparent or increased;
- no litigation, arbitration proceedings, prosecution or other
legal proceeding to which any member of the Wider Acacia Group is
or may become a party (whether as plaintiff, defendant or
otherwise) having been threatened, announced, implemented or
instituted by or against or remaining outstanding against or in
respect of any member of the Wider Acacia Group;
- (other than as a result of or in connection with the
Acquisition) no enquiry or investigation by, or complaint or
reference to, any Third Party having been threatened, announced,
implemented, instituted by or against or remaining outstanding
against or in respect of any member of the Wider Acacia Group;
- no steps having been taken and no omissions having been made
which would be likely to result in the withdrawal, cancellation,
termination or modification of any mining right, licence, permit,
waiver or concession held or used by any member of the Wider Acacia
Group;
- other than with the consent of Barrick, no action having been
taken or proposed by any member of the Wider Acacia Group, or
having been approved by Acacia Shareholders or consented to by the
Panel, which falls or would fall within or under Rule 21.1 of the
Code or which otherwise is or would be materially inconsistent with
the implementation by Barrick of the Acquisition on the basis
contemplated as at the Announcement Date; and
- no member of the Wider Acacia Group having conducted its
business in breach of any applicable laws and regulations.
No discovery of certain
matters
12. Other than to the extent Disclosed,
Barrick not having discovered after the Announcement Date in
relation to the Wider Acacia Group (except to the extent not
material in the context of the Wider Acacia Group, taken as a
whole):
- that any financial or business or other information concerning
the Wider Acacia Group disclosed at any time by or on behalf of any
member of the Wider Acacia Group, whether publicly, to any member
of the Wider Barrick Group or to any of their advisers, or
otherwise, is misleading or contains any misrepresentation of fact
or omits to state a fact necessary to make any information
contained therein not misleading and which was not subsequently
corrected before the Announcement Date by disclosure either
publicly or otherwise to Barrick;
- except as Disclosed, that any member of the Wider Acacia Group
is subject to any liability (actual or contingent); or
- any information which affects the import of any information
disclosed at any time by or on behalf of any member of the Wider
Acacia Group.
13. Barrick not having discovered that the
GoT has decided not to continue discussions with a view to
finalising the Transaction Documents or to propose or request any
change or modification to any of the terms of the Transaction
Documents as summarised in Appendix 4 which is or might reasonably
be expected to be material in the context of the Wider Acacia Group
taken as a whole.
14. Other than to the extent Disclosed,
Barrick not having discovered after the Announcement Date in
relation to the Wider Acacia Group (except to the extent not
material in the context of the Wider Acacia Group, taken as a
whole):
- that any past or present member of the Wider Acacia Group has
not complied in all material respects with any applicable
legislation or regulations of any jurisdiction with regard to the
use, treatment, handling, storage, transport, release, disposal,
discharge, spillage, leak or emission of any waste or hazardous
substance or any substance likely to impair the environment or harm
human health, or otherwise relating to environmental matters or the
health and safety of any person, or that there has otherwise been
any such use, treatment, handling, storage, transport, release,
disposal, discharge, spillage, leak or emission (whether or not
this constituted a non‑compliance by any person with any
legislation or regulations and wherever the same may have taken
place) which, in any case, would be likely to give rise to any
material liability (whether actual or contingent) or cost on the
part of any member of the Wider Acacia Group;
- that there is, or is likely to be, any material liability,
whether actual or contingent, to make good, repair, reinstate or
clean up any property now or previously owned, occupied or made use
of by any past or present member of the Wider Acacia Group or any
other property or any controlled waters under any environmental
legislation, regulation, notice, circular, order or other lawful
requirement of any relevant authority or third party or otherwise;
or
- that circumstances exist whereby a person or class of persons
would be likely to have a claim in respect of any product or
process of manufacture or materials used therein now or previously
manufactured, sold or carried out by any past or present member of
the Wider Acacia Group (in any case to an extent which is or would
be material in the context of the Wider Acacia Group, taken as a
whole).
Anti-corruption, sanctions and criminal
property
15. Other than to the extent Disclosed,
Barrick not having discovered after the Announcement Date in
relation to the Wider Acacia Group that, or it not otherwise having
been determined that (in each case, to an extent which is material
in the context of the Wider Acacia Group, taken as a whole):
- any past or present member, director, officer or employee of
the Wider Acacia Group is engaging in or has, at any time during
the course of such person’s employment with the Wider Acacia Group,
engaged in any activity, practice or conduct (including inaction or
a failure to engage in conduct, and including engaging in any
activity, practice or conduct through an agent performing services
on behalf of such person) which constitutes an offence or a breach
of obligations under any Tanzanian Law, the Bribery Act 2010 or any
other anti-corruption legislation applicable to any member of the
Wider Acacia Group;
- any asset of any member of the Wider Acacia Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002, as amended (but disregarding paragraph (b) of that
definition) or is deemed to be the proceeds of crime under any
applicable legislation;
- any past or present member, director, officer or employee of
the Wider Acacia Group or any person that performs or has performed
services for or on behalf of such company is engaging in or has at
any time engaged in any act of bribery or has paid or agreed to pay
any bribe including any "inducement fee" or given or agreed to give
any similar gift or benefit or paid or agreed to pay to a concealed
bank account or fund to or for the account of, any customer,
supplier, governmental official or employee, representative of a
political party, or other person for the purpose of obtaining or
retaining business or otherwise engaged in any activity, done such
things (or omitted to do such things) in contravention of any
Tanzanian Law, the UK Bribery Act 2010, the US Foreign Corrupt
Practices Act 1977, as amended, or any other anti-corruption
legislation applicable to the Wider Barrick Group or the Wider
Acacia Group, in each case which is material in the context of the
Wider Acacia Group as a whole;
- any past or present member, director, officer or employee of
the Wider Acacia Group, or any other person for whom any such
person may be liable or responsible (in each case including through
an agent performing services on behalf of such person), has engaged
in any business with, made any investments in, facilitated any
other party in their business with, supplied or received any goods,
technical data or services to or from, made any funds or assets
available to or received any funds or assets from: (i) any
government, entity, organization, or individual in respect of which
US or European Union persons, or persons operating in those
territories, are prohibited from engaging in activities or doing
business, or from receiving or making available funds or economic
resources, by US or European Union laws or regulations including
the economic sanctions administered by the United States Office of
Foreign Assets Control, the United States Department of State, or
HM Treasury & Customs; or (ii) any government, entity,
organization, or individual designated either directly or
indirectly (by virtue of ownership, control or other factors) or
targeted by any of the economic sanctions of the United Nations,
the United States, the European Union or any of its member
states;
- a member of the Wider Acacia Group has engaged in any activity
or transaction which would cause Acacia to be in breach of any law
or regulation or otherwise subject it to restrictions, penalties or
sanctions upon Barrick’s acquisition of Acacia including the
economic sanctions of the United States Office of Foreign Assets
Control, the United States Department of State, HM Treasury
& Customs, or any government entity, organization, or
individual designated or targeted by any of the economic sanctions
of the United Nations, the United States, the European Union or any
of its member states, or the requirements of the United States
Securities and Exchange Commission; or
- without limitation to Conditions 15(c) to 15(e) above, any
member of the Wider Acacia Group has received a notice from any
government authority of an inquiry, investigation or regulatory
proceeding, proposed cancellation, revocation, or avoidance of any
license, permit, or authorization applicable to any asset,
intention to impose a penalty, forfeiture or other sanction or been
named in a civil action brought by a government authority or any
private party (including a derivative shareholder action) related
to a potential violation of the Bribery Act 2010 or any other
anti-corruption legislation applicable to the Wider Acacia Group,
or any applicable economic sanctions or anti-money laundering
legislation.
B. Waiver
and invocation of the Conditions
1. The Scheme will not become effective,
and will lapse, unless the Conditions have been fulfilled or (to
the extent capable of waiver) waived or, where appropriate, have
been determined to be or remain satisfied by no later than the
Longstop Date.
2. Subject to the requirements of the
Panel, Barrick reserves the right in its sole discretion to
waive:
- those parts of all or any of the Conditions set out in
paragraph 2 of Part A of this Appendix 1 relating to the deadlines
for the Court Meeting, General Meeting and/or the Scheme Court
Hearing. If any such deadline is not met, Barrick shall make
an announcement by 8.00 a.m. on the business day following such
deadline confirming whether it has invoked the relevant Condition,
waived the relevant deadline or agreed with Acacia to extend the
relevant deadline; and
- all or any of Conditions 4 to 13 (inclusive), in each case, in
whole or in part, in Part A of this Appendix 1.
3. Save as set out above in respect of
paragraph 2, the Conditions set out in paragraphs 1 to 3
(inclusive) in Part A of this Appendix 1 cannot be waived.
4. Barrick shall not be under any
obligation to waive (if capable of waiver), to determine to be or
remain satisfied or to treat as fulfilled any of the Conditions in
Part A above by a date earlier than the latest date specified above
for the fulfilment of that Condition, notwithstanding that the
other Conditions may at such earlier date have been waived or
fulfilled and that there are, at such earlier date, no
circumstances indicating that any Condition may not be capable of
fulfilment.
5. The Acquisition shall lapse if:
- in so far as the Acquisition or any matter arising from or
relating to the Scheme or Acquisition constitutes a concentration
with a Community dimension within the scope of the Regulation, the
European Commission either initiates proceedings under Article
6(1)(c) of the Regulation or makes a referral to a competent
authority in the United Kingdom under Article 9(1) of the
Regulation and there is then a CMA Phase 2 Reference; or
- the Acquisition or any matter arising from or relating to the
Scheme or Acquisition becomes subject to a CMA Phase 2
Reference,
in each case before the date of the Court
Meeting.
6. Under Rule 13.5 of the Code, Barrick
may not invoke a Condition so as to cause the Acquisition not to
proceed, to lapse or be withdrawn, unless the circumstances which
give rise to the right to invoke the Condition are of material
significance to Barrick in the context of the Acquisition.
Conditions 1, 2 and 3 in Part A of this Appendix 1 are not subject
to this provision of the Code.
7. If the Panel requires Barrick to make
an offer or offers for any Acacia Shares under the provisions of
Rule 9 of the Code, Barrick may make such alterations to the
Conditions as are necessary to comply with the provisions of that
Rule.
8. Each of the Conditions shall be
regarded as a separate Condition and shall not be limited by
reference to any other Condition.
9. The Scheme will be governed by the laws
of England and Wales and will be subject to the jurisdiction of the
English courts and to the conditions and further terms set out in
this Announcement and in the Scheme Document. The Acquisition
and the Scheme will be subject to the applicable requirements of
the London Stock Exchange, the FCA, the Code, the Panel, the
Toronto Stock Exchange, the NYSE and applicable securities laws in
Canada and the United States.
C. Implementation by way of
Takeover Offer
Barrick reserves the right to elect, with the
consent of the Panel, to implement the Acquisition by way of a
Takeover Offer for the entire issued share capital of Acacia not
already held by Barrick as an alternative to the Scheme. In
such an event, the Takeover Offer will be implemented on the same
terms (subject to appropriate amendments), so far as applicable, as
those which would apply to the Scheme, with such appropriate
amendments including (without limitation) an Acceptance Condition
set at 90 per cent. or such lesser percentage (being more than 50
per cent.) as Barrick may decide, subject to the Panel’s consent in
nominal value of the shares to which such Takeover Offer
relates.
D. Certain further
terms of the Acquisition
Fractions of New Barrick Shares will not be
issued to Acacia Shareholders. Instead, Acacia Shareholders
who otherwise would have received a fraction of a New Barrick Share
will instead receive an amount in cash rounded to the nearest cent,
based on the amount obtained by multiplying such fraction by the
average Closing Price of Barrick Shares on the NYSE on each of the
five consecutive trading days ending on the trading day that is two
trading days prior to the Effective Date, except that individual
entitlements of less than US$ 5.00 will not be paid but will be
retained for the benefit of the Barrick Group.
The cash payment paid to Scheme Shareholders in
respect of fractional entitlements shall be made in Sterling other
than to Scheme Shareholders who have previously elected to receive
dividends in US Dollars and such election remains in place at the
Scheme Record Time. Such Scheme Shareholders will receive
their cash payment in US Dollars by converting the Sterling amount
which would be due pursuant to their fractional entitlements into
US Dollars using an exchange rate to be determined by Acacia as
will be set out in the Acquisition Document.
Scheme Shares will be acquired by Barrick fully
paid and free from all liens, equitable interests, charges,
encumbrances, rights of pre-emption and other third party rights of
any nature whatsoever and together with all rights attaching to
them as at the date of this Announcement or subsequently attaching
or accruing to them, including the right to receive and retain, in
full, all dividends and other distributions (if any) declared,
made, paid or payable, or any other return of capital made, on or
after the date of this Announcement.
Without prejudice to the right of Acacia
Shareholders to receive Acacia Exploration Properties Special
Dividends and Deferred Cash Consideration Dividends (if applicable)
after the Effective Date, if, on or after the date of this
Announcement, any dividend and/or other distribution and/or other
return of capital is declared, made or paid or becomes payable in
respect of the Acacia Shares, with a record date before the Scheme
Record Time, Barrick reserves the right (without prejudice to any
right of Barrick to invoke Condition 10(c) of Part A of this
Appendix 1), to reduce the Share for Share Exchange Ratio by
reference to the amount of such dividend and/or distribution and/or
return of capital, in which case any reference in this Announcement
or in the Scheme Document to the Consideration will be deemed to be
a reference to the Consideration as so adjusted. To the
extent that any such dividend and/or distribution and/or other
return of capital is declared, made or paid or is payable and it
is: (i) transferred pursuant to the Acquisition on a basis which
entitles Barrick to receive the dividend, distribution or return of
capital and to retain it; or (ii) cancelled, the Share for Share
Exchange Ratio will not be subject to adjustment in accordance with
this paragraph. Any exercise by Barrick of its rights
referred to in this paragraph shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded
as constituting any revision or variation of the Acquisition.
The Acquisition will be subject, inter alia, to
the Conditions and certain further terms which are set out in this
Appendix 1 and those terms which will be set out in the Scheme
Document.
The availability of the Acquisition to persons
not resident in Canada, the United States or the United Kingdom may
be affected by the laws of the relevant jurisdiction. Any
persons who are subject to the laws of any jurisdiction other than
Canada, the United States or the United Kingdom should inform
themselves about and observe any applicable requirements.
Further information in relation to Overseas Shareholders will be
contained in the Scheme Document.
Bases and
SourcesAppendix
2
- All references to Acacia Shares are to Acacia ordinary shares
of 10 pence each. All references to Barrick Shares are to
Barrick common shares with no par value.
- Acacia’s issued ordinary share capital refers to the
410,085,499 Acacia Shares in issue as at 5.00 p.m. on 18 July 2019
(being the last practicable date prior to the release of this
Announcement).
- The increase in the value of Acacia implied by the terms of the
Acquisition is based on the market closing prices of the Acacia
Shares and the Barrick Shares on the LSE and the NYSE respective on
20 May 2019 (the last business day prior to the announcement of a
possible offer by Barrick for Acacia) and 18 July 2019 (being the
last business day before this Announcement).
- The exchange rate on 18 July 2019 was US$1/£1.2479.
- The premium calculations to the price per Acacia Share have
been calculated by reference to:i. the closing price of 151 pence
per Acacia Share on 20 May 2019 (the last business day prior to the
announcement of a possible offer by Barrick for Acacia);ii. the
closing price of 187 pence per Acacia Share on 18 July 2019 (the
last business day before this Announcement); andiii. the
volume-weighted average price per Acacia Share over the twenty
trading days ended on 18 July 2019 of 181 pence per Acacia Share
(the last business day before this Announcement).
- The market prices of the Acacia Shares and the Barrick Shares
are the closing middle market quotations derived from Bloomberg and
refers to trading on the LSE and NYSE respectively.
- The volume-weighted average price per Acacia Share is derived
from Bloomberg.
- The Competent Persons' Report is the “Competent Persons’ Report
on the Mineral Assets of Acacia Mining plc” which was effective on
30 June 2019 and published by Acacia on 9 July 2019.
- Certain figures included in this Announcement have been subject
to rounding adjustments.
Appendix 3 Details of
Irrevocable Undertakings
The following directors of Acacia have given
irrevocable undertakings to vote (or procure the voting) in favour
of the Scheme at the Court Meeting and the Special Resolution to be
proposed at the General Meeting (or the event the Acquisition is
implemented by way of Takeover Offer, to accept, or procure the
acceptance of, the Takeover Offer) in relation to the following
Acacia Shares:
Name |
Number of Acacia Shares |
Percentage of issued ordinary share capital of
Acacia |
Rachel English |
17,383 |
0.00% |
Andre Falzon |
9,000 |
0.00% |
Total |
26,383 |
0.01% |
Each irrevocable undertaking will prevent that
Acacia director from: (i) exercising any right of withdrawal of any
acceptance of the Acquisition where such a right is otherwise
exercisable under the Code; or (ii) subject to customary exceptions
for transfers to close relatives and/or related trusts as part of
bona fide tax planning, where such transferee enters into an
irrevocable undertaking on terms no less favourable to Barrick,
otherwise selling all or any part of their respective Acacia Shares
into the market.
Each irrevocable undertaking will cease to be
binding if:
- the Scheme Document or the Offer Document (as the case may be)
has not been published within 28 days after the date of this
Announcement (or within such longer period as Barrick and Acacia,
with the consent of the Panel, agree);
- Barrick announces (with the consent of the Panel) that it does
not intend to make or proceed with the Acquisition;
- the Acquisition lapses, is withdrawn or otherwise terminates in
accordance with its terms other than where Barrick has, prior to
such date, elected to exercise its right to proceed by way of a
Takeover Offer and announced the same in accordance with the
requirements of paragraph 8 of Appendix 7 of the Code, and such
Takeover Offer has not lapsed, been withdrawn or otherwise
terminated;
- the Acquisition is implemented by way of a Scheme, the Scheme
or any resolution proposed which is required to implement the
Scheme is not approved by the requisite majority of Acacia
Shareholders at the General Meeting or the Court Meeting; or
- any competing offer for the issued and to be issued ordinary
share capital of Acacia is declared unconditional in all respects
(if implemented by way of a takeover offer) or otherwise becomes
effective (if implemented by way of a scheme of arrangement).
Appendix 4 Summary of
the material terms of the current draft documentation under
discussion (but not yet finalised) with the GoT
The discussions between Barrick and the GoT have
advanced to the point where draft documentation was initialled by
the GoT on 19 May 2019, albeit with a number of substantive issues
still outstanding which are subject to further discussion.
Whilst a basis for settlement has been developed, the terms have
not yet been finalised and therefore still carry significant
risk. Furthermore, if the Scheme becomes effective, in
addition to agreement being reached on the outstanding issues,
consequential amendments (which will need to be agreed with the
GoT) will be required to be made to the terms of the Transaction
Documents including to reflect that fact that Acacia will no longer
be a listed company and as a result, that the Transaction Documents
will not need to be conditional on Acacia shareholder
approval.
Below is a summary of the material terms of the
draft Transaction Documents which were initialled by the GoT.
With the exception of the Management and Administrative Services
Agreement, each of the Transaction Documents contains identical
dispute resolution provisions which are summarized at paragraph F
below.
THERE IS NO CERTAINTY THAT THE
TRANSACTION DOCUMENTS WILL BE AGREED WITH THE GOT IF THE SCHEME
BECOMES EFFECTIVE AND THE TERMS OF THE FINAL FORM OF TRANSACTION
DOCUMENTS, IF AGREED, MAY DIFFER FROM THOSE SUMMARIZED
BELOW.
A. Framework
Agreement
1. The Framework Agreement is the
implementation agreement for the arrangements between the GoT and
the Acacia Group. It sets out the terms of the transactions and
agreements comprising the arrangements (including the settlement of
disputes) and the various steps which need to be taken by the
parties and the conditions to be satisfied to reach closing of the
transactions contemplated by the Framework Agreement and to
implement the post-closing commercial arrangements. The Amended and
Restated MDAs provide more detail on the specifics of the
application of the arrangements on a go-forward
basis.
2. The Framework Agreement sets out the
key principle that going forward, the GoT and the Acacia Group will
share (on an aggregate basis) the economic benefits derived from
the Tanzanian mines on a 50/50 basis (the “50/50
Principle”). The 50/50 Principle is based on the
life of mine plans and reflects certain specified fiscal
assumptions and measures. The GoT will receive its share of
economic benefits through the payment by the TMCs of taxes,
royalties, fees and other fiscal levies (namely corporate income
tax, withholding tax, royalties, clearing fee, fuel/petrol levies,
road tolls, local GoT levies, import duties, skills development
levy and other similar fiscal levies, if any) and through the GoT’s
16% free carried interest in each of the TMCs and New OpCo and the
GoT’s 16% interest in shareholder loans (excluding shareholder
loans made for the purpose of new investment into the mines or
operations of the TMCs, amounts received or offset as a result of
any entitlement to a credit under the annual true-up mechanism
described further at paragraphs A3 and A4 below or, where the GoT
gives its consent, loans made for the purpose of on-lending), which
together entitle the GoT to participate in cash distributions
(whether by repayment of shareholder loans, dividends or returns of
capital) made by the TMCs and New OpCo proportionately as follows:
(i) 16% to the GoT and (ii) 84% to the shareholders of the TMCs
(other than any GoT shareholder). The shareholders of the
TMCs (other than any GoT shareholder) will receive their share of
the economic benefits through the repayment of their 84% share of
shareholder loans and their 84% share of dividends and returns of
capital to shareholders of the TMCs and New OpCo, less any
withholding taxes withheld in respect of any of the
foregoing. The US$300 million payment by the Acacia parties
in consideration for full, final and complete settlement of
disputes is outside of (and therefore not taken into account for
the purposes of) the 50/50 Principle.
3. It is acknowledged in the Framework
Agreement that the application of the terms of the agreement and
the Amended and Restated MDAs may not result in an exact 50/50
sharing of economic benefits. As such, the sharing of
economic benefits is subject to an annual true-up mechanism to
ensure that the projected sharing of economic benefits is and will
remain equal going forward in accordance with the 50/50
Principle. The 50/50 Principle is also subject to: (i) a
separate annual review of the fiscal regime (set out in more detail
under the Amended and Restated MDAs) resulting in amendments to the
Amended and Restated MDAs as necessary each year to seek to ensure
the projected sharing of economic benefits will remain equal going
forward in accordance with the 50/50 Principle; and (ii) fiscal
stabilization provisions (set out in more detail under the Amended
and Restated MDAs) providing that in the event of any change to the
fiscal regime applicable to the TMCs which is detrimental to them
and/or any change to the laws in force as of 1 January 2019, which
would, or would likely, cause a material distortion of the equal
sharing of economic benefits, the Amended and Restated MDAs will be
amended to restore the 50/50 Principle.
4. The annual true-up mechanism ensures
that the actual cumulative split of economic benefits remains 50/50
as between the GoT and the Acacia parties. Subject to a de minimis
threshold below which the true-up mechanism will not be triggered,
in the event that either party is found to have received an amount
greater than an amount equal to a 50% share of the economic
benefits in any one year, that party will not be entitled to
receive any further distributions (in the case of the Acacia
parties) or any tax or GoT-imposed charge or levies (in the case of
the GoT) in the following year until such time as the cumulative
50/50 balance of the economic benefits has been restored.
5. By virtue of the fiscal assumptions
underlying the 50/50 Principle, the TMCs are subject to taxes,
royalties, fees and other fiscal levies in accordance with
Tanzanian law as at the fiscal stabilisation date (which will be
the date of signing of the Framework Agreement), subject to
specified exceptions which are necessary to achieve a 50/50 sharing
of economic benefits based on the life of mine plans. There
are a number of provisions in relation to tax set out in the
Framework Agreement which are important to, and have been taken
into account in setting, the fiscal assumptions, including:
- VAT balances, carry forward loss balances and shareholder loan
balances will be agreed at 31 December 2017 with the Framework
Agreement containing a mechanism for agreeing or determining the
balances as at 31 December 2018. The Framework Agreement provides
that as regards the corporate income tax and VAT returns:i. any
period or part period ending on or prior to the end of December
2017 is fully settled and closed off; andii. for the 2018 tax year,
the period will be audited but the assessment will need to be
conducted in good faith and in accordance with the tax principles
(being the tax principles going forward mentioned at paragraph A17
and other principles relevant to that year);
- the non-refunded VAT balances, carry forward loss balances and
shareholder loan balances will have been or (in the case of
balances as at 31 December 2018) will be agreed or verified and
approved by the Tanzania Revenue Authority and any other relevant
agency of GoT and in the case of shareholder loans will have been
registered with the Bank of Tanzania and any other relevant agency
of GoT;
- going forward, the TMCs will be entitled to receive VAT
credits, recoveries or refunds including VAT which is attributable
to minerals (including doré and concentrates) or their exportation;
and
- the TMCs will be entitled to offset non-refunded VAT balances
as at 31 December 2017 (and, after the non-refunded VAT balances as
at 31 December 2018 have been agreed or determined, such
non-refunded VAT balances as at 31 December 2018) against income
tax liabilities until extinguishment and VAT credits, recoveries or
receivables over and above those amounts will be recoverable by the
TMCs in accordance with applicable law, and to the extent not
recovered within 180 days of filing of the relevant refund
application:i. the excess non-refunded balances will be applied to
offset any tax or government-imposed charges; orii. may be withheld
by the TMCs and offset against cash distributions or amounts
otherwise payable to the GoT.
Any amounts so offset, withheld or used shall be
treated as though paid or distributed, as applicable, for the
purposes of determining the GoT share of economic benefits for the
purposes of the 50/50 Principle.
6. The Framework Agreement provides that
the TMCs will commit up to US$70m in aggregate, plus up to US$6 per
ounce of gold sold in concentrate and doré from the mines, on
various specified CSR-related initiatives in Tanzania. These
CSR-related payments will be treated as operating costs of the TMCs
for the purposes of the 50/50 Principle and shall be fully
deductible for corporate income tax purposes.
7. The Framework Agreement and the Amended
and Restated MDAs provide that there is no obligation on the part
of the TMCs to establish beneficiation (including gold refining or
concentrate smelting) facilities in Tanzania.
8. The parties to the Framework Agreement
shall procure that the management of the TMCs’ Tanzanian operations
shall, as soon as practicable following the Closing Date and
consistent with the efficient operation of the TMCs and the mines,
be relocated to Tanzania, with a focus on engaging local talent to
maximize employment of Tanzanians, including:
- relocating all roles related to the Tanzanian operations of the
TMCs currently carried out from an office in Johannesburg to
Tanzania, with the board of directors of New OpCo determining the
appropriate location for such operations;
- closing such Johannesburg office; and
- creating positions for Tanzanian nationals to be appointed to
management positions within New OpCo as soon as suitably qualified
candidates can be identified.
9. The TMCs agree:
- to ensure contract mining in Tanzania is abandoned in the
shortest timeframe reasonably practicable after the Closing Date
(whilst allowing productivity to be maintained) in favour of having
all mining operations ultimately being carried out by Tanzanian
experts to be trained and developed by the TMCs;
- to apply their respective efforts to maximize employment of
qualified Tanzanians, including by undertaking training,
development and apprenticeship programs to implement the gradual
replacement of expatriate staff as qualified Tanzanians become
available; and
- that as soon as reasonably practicable following the Closing
Date and clarification of the processes to be used under the
Tanzanian mining laws and regulations (including the New Laws) with
respect to the sorting, valuation and transfer of minerals,
concentrates and doré, the TMCs shall comply with those
processes.
Conditionality and closing
deliverables
10. Certain material conditions must be
satisfied before most of the key provisions (such as the fiscal
measures) of the Framework Agreement become effective. These
conditions include:
- provisions relating to the legalisation of the Transaction
Documents by the GoT and related closing deliverables to be
provided by the GoT;
- customary conditions relating to the capacity, power and
authority of the GoT parties to enter into the Transaction
Documents and perform their obligations thereunder;
- key undertakings from the GoT in a form reasonably acceptable
to the Acacia parties, confirming that as from the Closing Date:i.
subject to the GoT’s 16% free carried interest, the TMCs shall not
at any time be required, including under the Tanzanian mining laws
and regulations, including the New Laws and the Mining (Minimum
Shareholding and Public Offering) Regulations 2016 (as amended), to
make any public offer in Tanzania in respect of, or issue or
transfer any shares or other securities or economic participation
rights to any third party or person (including any member of the
public) or to list their shares or other securities on any stock
exchange in Tanzania;ii. the TMCs shall not at any time have any
obligation to establish beneficiation (including gold refining or
concentrate smelting) facilities in Tanzania; andiii. the
implementation of the 50/50 Principle and the Local Content and CSR
Plan shall always shall be deemed to satisfy any obligation borne
by or of the TMCs or New OpCo to plough back profits in accordance
with Tanzanian mining laws and regulations;
- the ban on the export of gold and copper concentrate from
Tanzania announced by the Ministry of Energy & Minerals on 3
March 2017 (the “Export Ban”) being lifted in
respect of the TMCs;
- there being no change in law between the date of signing of the
Framework Agreement and the Closing Date that would, or would be
likely to, result in either: (i) an alteration to the terms of any
Transaction Document to the detriment of any Acacia party; or (ii)
any erosion of the 50/50 Principle to the detriment of any Acacia
party;
- the Acacia parties having received from the GoT certain closing
deliverables, including:i. each of the Transaction Documents, duly
executed by the GoT;ii. letters seeking an order of termination of
the relevant arbitration proceedings, duly executed by the GoT;iii.
an opinion, addressed to and in a form reasonably satisfactory to
the Acacia parties, from and duly signed by the Hon. Attorney
General of the GoT covering matters such as the legalisation of the
Transaction Documents and the capacity, power and authority of the
GoT;iv. evidence, in a form reasonably satisfactory to the Acacia
parties, that the 2018 tax year corporate income tax return and VAT
return, all opening non-refunded VAT balances, opening carry
forward loss balances and opening shareholder loan balances have
been agreed or determined with the Tanzania Revenue Authority and
any other relevant agency of GoT;v. evidence, in a form reasonably
satisfactory to the Acacia parties, that the GoT has procured a
legal, valid, binding and enforceable waiver addressed to each of
the TMCs in respect of (i) the requirement for each TMC to have a
minimum local shareholding of 30% obtained through a public offer
in Tanzania and to list their shares in Tanzania; and (ii) the
right of the GoT to acquire shares over and above its 16% free
carried interest shares in respect of the total tax expenditure
incurred by the GoT for the benefit of the TMCs;vi. evidence, in a
form reasonably satisfactory to the Acacia parties, of approval by
the Tanzanian Mining Commission in accordance with Tanzanian law of
the Local Content and CSR Plan of each TMC and approval not having
lapsed or been revoked or withdrawn at any time before the Closing
Date;vii. evidence, in a form reasonably satisfactory to the Acacia
parties, that the Export Ban has been lifted with respect to the
TMCs and that all authorisations, actions and steps necessary to
ensure that the TMCs can export minerals (including concentrate and
doré) consistent with the terms of the other Transaction Documents,
have been given, obtained or taken by the GoT; andviii.
confirmation, in a form reasonably satisfactory to the Acacia
parties, of the release of all minerals (including concentrate)
belonging to Bulyanhulu Gold Mine Limited and Pangea Minerals
Limited which the GoT has currently seized;
- the Acacia parties having received from the Tanzania Revenue
Authority (or the GoT on behalf of the Tanzania Revenue Authority)
duly executed deliverables required to fully settle all taxation
proceedings (and any other documents needed to settle the disputes
(including letters seeking an order of termination of the
proceedings between the GoT parties and the Acacia parties,
including tax proceedings and the arbitration proceedings));
- the GoT having received from the Acacia parties certain closing
deliverables, including:i. each of the Transaction Documents, duly
executed by the Acacia parties;ii. certificates, notes and other
documents evidencing the GoT’s 16% free carried interest in the
capital and shareholder loans of each of the TMCs and New OpCo;
andiii. letters seeking an order of termination of the relevant
arbitration proceedings, duly executed by the relevant TMCs;
and
- the Tanzania Revenue Authority (or the GoT on behalf of the
Tanzania Revenue Authority) having received from the Acacia
parties, on the Closing Date, duly executed deliverables required
to fully settle all taxation proceedings (and any other documents
needed to settle the disputes).
11. The conditions set out in (a) to (g)
of paragraph A10 above may be waived by the Acacia parties and the
conditions set out in (h) to (i) of paragraph A10 above may be
waived by the GoT.
12. Those provisions which are stated to
become effective on signing of the Framework Agreement include
provisions relating to the settlement of disputes (to the extent
specified in the operative clause or schedule), the initial upfront
“payment”, the conditions and the dispute resolution
provisions.
Settlement
13. The Framework Agreement seeks to
provide for a comprehensive settlement of all disputes between the
GoT and the Acacia Group and waiver of actual or potential claims
on a mutual basis. Under the terms of the Framework Agreement
the GoT on the one hand and the Acacia Group on the other will
release and forever discharge one another (and their respective
related persons) from all and any Claims that they have ever had,
now have or hereafter can, shall or may have against one another or
their related persons or their respective assignees, transferees or
successors or any of them, arising however and in whatever capacity
relating to the facts, circumstances or matters subject to the
Existing Disputes existing or arising from facts which occurred
prior to the Closing Date, or in the case of Tax Disputes or
taxation or any liability to taxation only, 31 December 2018.
14. The definitions of Claims, Existing
Disputes, Tax Disputes and Tax Proceedings in the Framework
Agreement are drafted broadly with a view to providing for a
comprehensive settlement. The definition of Existing Disputes
includes reference to underlying facts, circumstances, claims,
disputes and/or allegations relating, as applicable, to matters
referred to or raised in:
- proceedings of any nature or description between the GoT
parties and the Acacia parties (or any of them and/or their
respective related persons), Tax Proceedings and the arbitration
proceedings;
- the existing MDAs and related mining licences and all alleged
acts and omissions in relation to any of them or any other
agreement or arrangement between or any act or omission by any of
the parties or their respective related persons;
- tax or any actual or potential liability to or any actual or
potential audit, assessment, claim, enquiry, investigation or
communication of whatever nature in respect of tax; and
- any other matter arising out of or connected with the
relationship(s) as between the GoT parties and the Acacia parties,
or any of them, and/or their respective related persons (save to
the extent preserved or provided for by Transaction
Documents).
15. The settlement seeks to be
comprehensive but at a high level. With there being multiple
disputes, the mechanics to finally dispose of all claims, in
particular those relating to tax, are varied and complex. The
Framework Agreement states that the parties will work together in
good faith and without delay to agree and finalise the deliverables
required to fully settle all taxation proceedings and all other
documents needed to give effect to the settlement provisions, with
a view to these being agreed within 60 days from the date of the
Framework Agreement. The Tanzania Revenue Authority will be
party to the tax deliverables given the ongoing tax cases to which
the Tanzania Revenue Authority is party.
16. The settlement terms have been
prepared on the following assumptions:
- The aggregate sum of US$300 million will be payable by the
Acacia parties in consideration for the full, final and complete
settlement of the disputes and the liability to taxation of the
Acacia parties.
- There will be an initial upfront “payment” by way of assignment
to the GoT of minerals contained in containers at Dar es Salaam
port with a value of US$100 million, such value to be determined
pursuant to a protocol separately agreed between the parties.
Such assignment will be made within a prescribed period following
the later of (i) signing of the Framework Agreement, and (ii) the
lifting of the Export Ban imposed on the TMCs. The Framework
Agreement provides that if completion does not occur, the TMCs will
be entitled to offset this amount against any tax liabilities
payable to the GoT after termination of the Framework
Agreement.
- Conditional on and following completion under the Framework
Agreement, six subsequent payments of US$33.33 million each will be
made to the GoT starting on the first anniversary of completion and
then annually thereafter for five years. Each such payment
will not exceed 75% of the aggregate post-tax free cash flow in any
year attributable to Acacia’s 84% share in the TMCs. Where
payment in full would exceed that cap, the excess shall be deferred
without interest and paid as part of the next subsequent payment
(subject to the cap for that subsequent payment).
- The Framework Agreement allows for the US$300 million
settlement payment to be reduced by an amount equal to any excess
claimed by the Tanzania Revenue Authority if an assessment arising
from the Tanzania Revenue Authority’s audit in respect of the 2018
tax year results in a total tax liability for the Acacia parties in
excess of what is expected (i.e. exceeds the total of the 2018
amounts paid by Acacia prior to the date of the Framework
Agreement).
- The effective date of settlement for all non-tax related claims
will be the Closing Date and for tax-related claims the effective
date will be 31 December 2018.
- Neither party admits any liability or wrongdoing
whatsoever.
17. The Framework Agreement also sets out
certain tax principles (consistent with the basis of the 50/50
Principle) which will be applied to the audit for the 2018 tax year
and then going forward from 1 January 2019. These principles
are also reflected in the Amended and Restated MDAs.
B. Amended
and Restated MDAs
1. The Amended and Restated MDAs set out
in detail the deal going forward on a mine by mine basis and
implement the equal sharing of the economic benefits (on an
aggregate basis) deriving from the respective mining
operations. The Amended and Restated MDAs will be executed at
or immediately prior to completion under the Framework
Agreement. Key terms in the Amended and Restated MDAs include
that:
- the GoT will receive its share of the economic benefits through
the fiscal measures, a 16% free carried shareholding interest in
each of the TMCs and a 16% interest in the shareholder loans to the
TMCs (with the exception of shareholder loans made for the purpose
of new investment into the mines or operations of the TMCs, amounts
received or offset as a result of any entitlement to a credit under
the annual true-up mechanism or, where the GoT gives its consent,
shareholder loans created for the purpose of on-lending).
Distributions (whether loan repayments, dividends or returns of
capital) will therefore be shared 84% as to the Acacia Group and
16% as to the GoT;
- the GoT will not unilaterally seek to increase its share
ownership or economic participation rights in the TMCs;
- subject to the GoT’s 16% free carried interest and the sharing
of economic benefits under the 50/50 Principle, no requirement or
obligation of any kind applies to or shall otherwise be imposed on
the TMCs or their direct or indirect shareholders or affiliates to
make any public offer in respect of, or issue or transfer any
shares, other securities or economic participation rights to the
GoT or any third party (including any member of the public) or to
list shares, other securities or economic participation rights on
any stock exchange in Tanzania;
- in order to achieve the 50/50 Principle, VAT, carry forward
loss and shareholder loan balances will be confirmed and agreed in
advance, as will the taxes, royalties, duties, fees and levies
payable by the TMCs;
- the TMCs may open and maintain bank accounts outside of
Tanzania in accordance with the Foreign Exchange Act with the
approval of the GoT (such consent not to be unreasonably withheld
or delayed);
- the TMCs will have the unfettered right to export minerals
(including doré and concentrates) until refining (in the case of
doré) and smelting (in the case of concentrates) are available in
Tanzania and the GoT will provide assistance so all required
authorisations and/or waivers be granted to the TMCs so as to
facilitate export of doré and concentrates;
- there will be no obligation on the TMCs to construct
beneficiation facilities in country; and
- the tax principles apply in relation to (or to determine) the
liability to tax of the TMCs.
2. The Amended and Restated MDAs contain
the fiscal stabilisation provisions and the annual true-up
mechanism set out in the Framework Agreement which seek to ensure
that the projected sharing of the economic benefits between the GoT
and the Acacia Group arising from the particular mining operation
will remain equal going forward in accordance with the 50/50
Principle based on the life of mine plan then in effect.
3. In the event of a failure to reach
agreement under any of these fiscal stabilisation or annual true-up
mechanisms, any party may refer the matter to dispute resolution as
set out in the Amended and Restated MDAs (which is summarised
below).
C. TMC
Shareholders’ Agreements
1. The TMC Shareholders’ Agreements set
out the manner in which each TMC is to be governed and the
relationship between the GoT shareholder and the other shareholding
entities of the TMCs. These shareholders’ agreements will be
executed at or immediately prior to completion under the Framework
Agreement.
2. The TMC Shareholders’ Agreements
provide that the shareholders of the TMCs will hold their shares in
the following proportionate interests:
- Acacia shareholder – 84% (held in the form of Class A shares);
and
- the GoT shareholder – 16% free carried interest (held in the
form of Class B shares), with such free carry interest being
non-transferable (directly or indirectly).
3. The articles of association for the
TMCs, which will be entered into on the Closing Date, provide that
Class A shares and Class B shares rank pari passu in all respects
except that: (i) Class B shares may only be issued to, held by or
transferred to the GoT shareholder and may not be pledged, charged
or otherwise disposed of (whereas the Class A shares are
transferable to: (a) a financial institution by way of a pledge to
secure bona fide debt; (b) an affiliate (with GoT shareholder
consent, not to be unreasonably withheld); or (c) a third party
(subject to the GoT shareholder’s right of first refusal and with
Government consent, not to be unreasonably withheld or delayed),
provided, in each case, the transferee enters into a deed of
adherence); (ii) regardless of the number of Class B shares in
issue, the Class B shares will at all times be deemed to represent
16% of the shares holding voting and economic rights in the TMC
(being collectively, the Class A shares and the Class B shares);
(iii) a holder of Class B shares will not have any pre-emption
rights over any allotment of new Class A shares and its
proportionate interest will not be affected by such allotment
(whereas a holder of Class A shares has pre-emption rights over any
allotment of new Class A shares); and (iv) the holder of Class A
shares will elect from amongst the directors appointed by them, a
chairman of the board of the TMC (whereas a holder of Class B
shares has no such right).
4. Directors of each TMC will be nominated
by the shareholders in accordance with their proportionate
interests. Notwithstanding the composition of the board of
each TMC, at any meeting of the board at which a quorum is present,
the aggregate voting power of the directors of the TMC nominated by
a shareholder and present at the meeting will be equal to that
shareholder’s proportionate interest, divided equally among its
director nominees. For example, if the Acacia shareholder
holds 84% of the outstanding equity shares in the TMC, its director
nominees will be entitled to cast an aggregate of 84% of the vote
on any matter, notwithstanding that there may be only one director
in attendance.
5. Prior to appointment or replacement of
the CEO of each TMC, the Acacia shareholders shall consult with the
GoT shareholder and, whilst the ultimate decision resides
exclusively with the Acacia shareholder, give due consideration to
the GoT shareholder’s views and preferences. Except as
otherwise provided in the TMC Shareholders’ Agreements, all
questions proposed for consideration by the directors at a board
meeting of the TMC will be determined, and all resolutions, in
order to be effective, will be passed, by the directors nominated
by the shareholder holding at least a majority of the issued and
outstanding equity shares in the TMC.
6. As well as setting out the
proportionate interests of each shareholder, details on governance
and transfer restrictions, each TMC Shareholders’ Agreement
provides that, subject to applicable laws in Tanzania, each TMC
board will be entitled to make a distribution (in the form of
dividends, repayment of shareholder loans, or return of capital) of
all of the distributable profits as determined by that TMC board
for each fiscal year to the respective shareholders of the TMC in
proportion to their 84%/16% proportionate interest.
7. Certain actions cannot be taken by the
TMCs without the prior approval of the GoT shareholder (in each
case not to be unreasonably withheld or delayed) (being the
“Reserved Matters”). The list of Reserved
Matters includes, but is not limited to:
- amendment to the articles of association of the TMCs;
- any merger, sale of all or substantially all assets,
reorganisation, joint venture, acquisition of more than 50% of the
shares then in issue by any person other than the Acacia
shareholder or its affiliates, application to list any shares on
any recognized national or international stock exchange or public
offer of securities or similar in respect of the TMCs;
- issuance to any party (other than to shareholders or their
affiliates on a pro rata basis) of any shares, whether Class A or
Class B shares, in the capital of the TMC, or any securities,
options or rights etc.;
- provision by the TMC of any credit, the making of a loan or
advance, or the granting of a guarantee, in each case other than in
the ordinary course of the business (ordinary course includes, for
the purpose of obtaining third party finance for the TMC’s
operations or business or as part of the usual terms of contracts
for the sale of the TMC’s products on arm’s length terms); and
- authorization or entering into of any shareholder loan from an
affiliate of the TMC to the TMC (i) for the purpose of on-lending
of proceeds raised through external third party financing, and (ii)
which does not require the TMC to issue, grant or deliver loan
notes to the GoT shareholder representing a 16% interest
therein.
8. There is a deadlock resolution
mechanism which may be initiated by either shareholder in the event
of a deadlock in respect of any Reserved Matter. The board may,
notwithstanding the Reserved Matters, take necessary actions to (i)
cure breach of financial covenants, (ii) meet an immediate need for
the obtaining of finance or funding, which cannot reasonably be
avoided nor legitimately postponed, in carrying out duly approved
business of the TMC in the ordinary course, or (iii) prevent or
respond to an emergency in certain circumstances.
D. New OpCo
Shareholders’ Agreement
1. New OpCo will be incorporated in
Tanzania and the New OpCo Shareholders’ Agreement will be signed at
or immediately prior to the Closing Date. New OpCo will be
the management services company for the TMCs with its head office
located in Mwanza, Tanzania and will have the rights and
obligations and provide the services to the TMCs as set out in the
Management and Administrative Services Agreement. New OpCo
will be owned 84%/16% by a subsidiary of the Acacia Group and a
nominee of the GoT respectively. Acacia will hold its shares
in New OpCo as Class A shares and the GoT will hold by way of Class
B shares. The rights attaching to the Class A and Class B
shares set out in the articles of association for New OpCo and are
expected to be identical to those described above at paragraph
C3. The New OpCo Shareholders’ Agreement also provides that
the New OpCo board will consist of directors nominated by the
shareholders of New OpCo in proportion to their 84%/16%
proportionate interest. Except as otherwise provided in the
New OpCo Shareholders’ Agreement, all questions proposed for
consideration by the directors at a board meeting of New OpCo will
be determined, and all resolutions, in order to be effective, will
be passed, by the directors nominated by the shareholder holding at
least a majority of the issued and outstanding equity shares in the
New OpCo.
2. The New OpCo Shareholders’ Agreement
contains a largely identical list of Reserved Matters to those
described above at paragraph C7 in relation to the TMCs
Shareholders’ Agreements, save for an additional reserved matter
with respect to the appointment and dismissal (other than for
cause) of the CEO, CFO or COO of New OpCo, and over which the GoT
shareholder will have an effective veto right (not to be
unreasonably withheld or delayed). There is a deadlock
resolution mechanism in the event of a deadlock in respect of any
Reserved Matter but, in contrast to the TMC Shareholders’
Agreements, there is no ability to override the Reserved Matters in
certain operational circumstances.
E. Management and
Administrative Services Agreement
The Management and Administrative Services
Agreement is a customary agreement between the TMCs and New OpCo
under which the TMCs contract New OpCo to act as their service
provider to carry out certain management and operational functions
and discharge such responsibilities as detailed therein. The
Management and Administrative Services Agreement will only be
signed and become effective at completion under the Framework
Agreement at which time New OpCo will be owned 84%/16% by a
subsidiary of the Acacia Group and a nominee of the GoT
respectively.
F. Dispute
resolution
All the Transaction Documents (except the
Management and Administrative Services Agreement) will contain
identical Dispute Resolution provisions, these provisions provide
that:
- in the first instance, the parties will seek to resolve all
disputes arising out of or in connection with the relevant
Transaction Document through negotiations between the parties;
- in the event that the dispute is not resolved through
negotiation within 30 days, the parties may refer the dispute to
conciliation in accordance with the UNCITRAL Conciliation
Rules. The conciliator will be independent of the parties,
and will not be a national of Tanzania, the United Kingdom, Canada
or the United States. If a conciliator is not appointed
within 14 days of acceptance of a request for conciliation, the
President of the Singapore International Arbitration Centre will
appoint the conciliator. A conciliator can make proposals to
the parties as to how they might resolve any dispute, but cannot
make any binding decision. To resolve a dispute through
conciliation the parties would have to reach an agreement, recorded
in a binding agreement; and
- where a dispute is not resolved by conciliation within 75 days
of the expiry of the negotiation period (or where it is urgent and
requires immediate reference to arbitration such that negotiation
and conciliation are not appropriate), any party has the right to
refer the dispute for final resolution by arbitration in accordance
with the UNCITRAL Arbitration Rules. Upon issuance of a
notice of arbitration commencing the arbitration, the parties shall
seek to mutually agree on the arbitral seat or legal place of
arbitration. The seat shall be in a jurisdiction which is
internationally recognized and experienced in handling complex
international commercial arbitration (not being Tanzania, a state
which is a member of the East African Community, the UK, Canada or
the United States) and is a party to the New York Convention of the
Recognition and Enforcement of Foreign Arbitral Awards, 1958.
If within 30 days of the date of the notice of arbitration, the
parties fail to mutually agree on the choice of arbitral seat, any
of the parties will refer the matter to the President of the
Singapore International Arbitration Centre to determine the
arbitral seat. If a matter is urgent and requires immediate
reference to arbitration, or if there is a dispute about the choice
of seat by the President of the Singapore International Arbitration
Centre or his/her capacity to so determine, the default seat of
arbitration will be Singapore. The physical venue for the
arbitration hearings will need to be agreed between the parties,
subject to agreed criteria or otherwise determined by the President
of the Singapore International Arbitration Centre if they cannot
agree. While the contracts are to be governed by Tanzanian law, the
agreement to arbitrate is itself an agreement separable from the
rest of the contract in which it sits and will be governed by the
laws of the arbitral seat, i.e. the laws of a neutral jurisdiction
which is a party to the New York Convention and is experienced in
international arbitration, with consideration to the governing law
of the Transaction Documents being Tanzanian law. The arbitration
will be in English and there will be a tribunal comprising three
arbitrators who will be appointed in accordance with the UNCITRAL
Rules. The appointing authority has not been agreed. The UNCITRAL
Rules provide that the Secretary-General of the Permanent Court of
Arbitration in The Hague shall designate an appointing authority at
the request of a party, if the parties are unable to agree on one
within 30 days of a party proposing an appointing authority (e.g.
in its notice of arbitration). The arbitral tribunal’s award will
be final and binding on the parties. The parties each waive their
rights to claim immunity from any proceedings or in respect of the
enforcement of any award or judgment against their assets.
Appendix 5
Definitions
The following definitions apply throughout this
Announcement unless the context requires otherwise.
“$”, “US$”, “US Dollars” or “cent” |
|
the lawful currency of the US |
“£”, “Sterling”, “pence” or “p” |
|
the lawful currency of the UK |
“Acceptance Condition” |
|
means the acceptance condition to any Takeover Offer |
“Acquisition” |
|
the direct or indirect acquisition of the entire issued and to be
issued share capital of Acacia by Barrick (other than the Acacia
Shares already held by Barrick) to be effected by way of: (i) the
Scheme; or (ii) (should Barrick so elect, subject to the consent of
the Panel) a Takeover Offer |
“Acquisition Document” |
|
(i) if the Scheme is (or is to be) implemented, the Scheme
Document; or (ii) if the Takeover Offer is (or is to be)
implemented, the Offer Document |
“Acacia” or "the Company” |
|
Acacia Mining plc |
“Acacia Articles” |
|
the memorandum and articles of association of Acacia |
“Acacia Board Recommendation” |
|
means an unqualified recommendation from the Transaction Committee
Directors to Acacia Shareholders in respect of the Acquisition: (i)
to vote in favour of the Special Resolution; or (ii) if Acacia
elects to implement the Acquisition by means of a Takeover Offer,
to accept the Takeover Offer |
“Acacia Exploration Properties” |
|
- a 100% equity interest in the Liranda Corridor Project located
in Kenya;
- a 75% equity interest in the Nyanzaga Gold Project located in
Tanzania and managed through Nyanzaga Mining Company Limited;
- a 50% equity interest in the Sarama Joint Venture comprising,
inter alia, the Tankoro Gold Project (also referred to herein as
“South Houndé Project”) located in Burkina Faso;
- a 100% equity interest in the two licences (which comprise the
majority of the total licence area in Kenya) and an 85% interest in
three licences (through a joint venture with Advance Gold – Gold
Rim licences), which together comprise the “West Kenya Project”
which extends over 1,630km2 encompassing a large portion of the
Busia Kakagme Greenstone Belt which is inclusive of the Lirandor
Corridor Project;
- a 51% equity interest in the Central Houndé joint venture
comprising three exploration licences extending over a total area
of 414km2 located in Burkina Faso;
- a 100% equity interest in the Pinarello & Konkolikan joint
venture comprising six exploration licences extending over a total
area of 975km2 located in Burkina Faso;
- a 100% equity interest in the Frontier joint venture comprising
two exploration licences extending over a total area of 497km2
located in Burkina Faso;
- Through the “Tintaba Agreement” an opportunity to earn a 95%
equity interest in three exploration licences extending over a
total area of 144km2 located in Mali; and
- a 100% equity interest in the Gourbassi East Property
comprising a single exploration licence extending over a total area
of 23km2 located in Mali
|
“Acacia Exploration Properties Special Dividends” |
|
has the meaning given in paragraph 3 of this Announcement |
“Acacia Group” |
|
Acacia and its subsidiary undertakings |
“Acacia Mining Rights Condition” |
|
the Condition set out in paragraph 8 of Part A of Appendix 1 to
this Announcement |
“Acacia Share Plans” |
|
the Acacia Mining plc Long‑Term Incentive Plan, the Acacia Mining
plc Stock Option Plan and the Acacia Mining plc Non-Executive
Deferred Share Unit Plan (each as amended from time to time) |
“Acacia Shareholders” |
|
the registered holders of Acacia Shares from time to time |
“Acacia Shares” |
|
the ordinary shares of 10 pence each in the capital of Acacia |
“Amended and Restated MDAs” |
|
the amended and restated mining development agreements between each
of the TMCs (and their respective shareholders other than the GoT)
and the GoT in relation to the mines |
“Announcement Date” |
|
19 July 2019, being the date of release of this Announcement |
“Authorisations” |
|
authorisations, orders, grants, recognitions, confirmations,
consents, licences, clearances, certificates, permissions or
approvals |
“Barrick” |
|
Barrick Gold Corporation |
“Barrick CDIs” |
|
CREST Depositary Interests through the existing unsponsored CREST
Depositary Interests programme administered through CREST in
respect of Barrick Shares |
“Barrick Group” |
|
Barrick and its subsidiary undertakings |
“Barrick Shareholders” |
|
the holders of Barrick Shares from time to time |
“Barrick Shares” |
|
the common shares in the capital of Barrick |
“BGML” |
|
has the meaning given in paragraph 4 of this Announcement |
“Board” |
|
board of directors |
“business day” |
|
means a day other than a Saturday or Sunday or public holiday in
England and Wales, Canada or the United States on which banks in
London, Toronto and New York are open for general commercial
business |
“Canadian Holders” |
|
holders of Acacia Shares in Canada, resident in Canada or with a
registered address in Canada, and any custodian, nominee or trustee
holding Acacia Shares for persons in Canada or with a registered
address in Canada |
“Closing Date” |
|
the 10th business day after the date on which the last condition in
the Framework Agreement is satisfied, or where permitted
waived |
“Closing Price” |
|
in respect of Barrick, the last reported sale price in US Dollars
of a Barrick Share as quoted on NYSE |
“Code” |
|
means the City Code on Takeovers and Mergers, as issued from time
to time by or on behalf of the Panel |
“Companies Act” |
|
the Companies Act 2006, as amended from time to time |
“Competent Persons’ Report” |
|
the “Competent Persons’ Report on the Mineral Assets of Acacia
Mining plc” published on 9 July 2019 |
“Conditions” |
|
- for so long as the Acquisition is being implemented by means of
the Scheme, the terms and conditions to the implementation of the
Acquisition (including the Scheme) as set out in Part A of Appendix
1 to this Announcement and to be set out in the Scheme Document, as
may be amended by Barrick with the consent of Acacia and the Panel;
and
- for so long as the Acquisition is being implemented by means of
a Takeover Offer, the terms and conditions referred to in (a)
above, as amended by replacing the conditions set out in paragraph
2 of Part A of Appendix 1 to this Announcement with the Acceptance
Condition and as may be further amended by Barrick with the consent
of the Panel,and Condition shall be construed accordingly;
|
“Consideration” |
|
the consideration payable to the Scheme Shareholders in connection
with the Acquisition |
“Court” |
|
the High Court of Justice of England and Wales |
“Court Meeting” |
|
the meeting of the Scheme Shareholders to be convened by order of
the Court pursuant to section 896 of the Companies Act, notice of
which will be set out in the Scheme Document, for the purpose of
approving the Scheme, including any adjournment thereof |
“CREST” |
|
the operator’s system (as defined in the Uncertificated Securities
Regulations 2001 (SI 2001/375)) in respect of which Euroclear
UK & Ireland Limited is the authorised operator (as defined in
such Order) in accordance with which securities may be held and
transferred in uncertificated form |
“Dar es Salaam Stock Exchange” or “DSE” |
|
Dar es Salaam Stock Exchange PLC or its successor |
“Dealing Disclosure” |
|
an announcement pursuant to Rule 8 of the Code containing details
of dealings in interests in relevant securities of a party to an
offer |
“Deferred Cash Consideration” |
|
has the meaning given in paragraph 3 of this Announcement |
“Deferred Cash Consideration Dividend” |
|
has the meaning given in paragraph 3 of this Announcement |
“Disclosed” |
|
in respect of Acacia means, information which has been fairly
disclosed by or on behalf of Acacia: (i) in the annual report
and accounts of the Acacia Group for the 12 month period to 31
December 2018; (ii) in this Announcement; (iii) in any other
public announcement by, or on behalf of, Acacia including those
made in accordance with the Listing Rules, Disclosure Guidance and
Transparency Rules of the FCA (as applicable) after 31 December
2018 but prior to the date of this Announcement; (vi) in writing to
Barrick prior to the date of this Announcement (including to
Barrick’s officers, employees, agents or advisers in their capacity
as such) |
“Effective Date” |
|
(i) the date on which the Scheme becomes effective in
accordance with its terms; or (ii) if Barrick elects, with the
consent of the Panel, to implement the Acquisition by means of a
Takeover Offer, the date that the Takeover Offer becomes or is
declared unconditional in all respects |
“Excluded Assets” |
|
- a 75% equity interest in the Nyanzaga Gold Project located in
Tanzania and managed through Nyanzaga Mining Company Limited;
and
- a 50% equity interest in the Sarama Joint Venture comprising,
inter alia, the Tankoro Gold Project (also referred to herein as
“South Houndé Project”) located in Burkina Faso
|
“Excluded Shares” |
|
any Acacia Shares registered in the name of or beneficially owned
by Barrick or any other member of the Barrick Group |
“Exploration Value” |
|
has the meaning given in paragraph 2 of this Announcement |
“Export Ban” |
|
has the meaning given in paragraph 4 of this Announcement |
“FCA” |
|
the UK Financial Conduct Authority |
“First EPO” |
|
has the meaning given in paragraph 10 of this Announcement |
“First PUSU Deadline” |
|
has the meaning given in paragraph 4 of this Announcement |
“Forms of Proxy” |
|
the forms of proxy in connection with each of the Court Meeting and
the General Meeting, which shall accompany the Scheme Document |
“Framework Agreement” |
|
an agreement principally between the GoT, the TMCs and the
shareholders of the TMCs (other than the GoT). In the most recent
draft under discussions with the GoT Acacia was included as an
additional party solely for the purpose of agreeing to and being
bound by terms of settlement of disputes, which are contained in
the Framework Agreement, but the GoT has stated that it is not
prepared to enter into a settlement directly with Acacia |
“General Meeting” |
|
the general meeting of Acacia to be convened in connection with the
Scheme, notice of which will be set out in the Scheme Document,
including any adjournment or postponement thereof |
“GoT” |
|
the Government of the United Republic of Tanzania, including all
relevant organs and agencies as applicable |
“GoT Negotiating Team Letter” |
|
has the meaning given in paragraph 4 of this Announcement |
“High Value” |
|
SRK valuation which 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 |
“Independent Acacia Directors” |
|
the independent directors on the Board of Acacia |
“Inferred Mineral Resources” |
|
has the meaning given to it in JORC (2012) Code |
“ITV” |
|
independent technical value |
“JORC (2012) Code” |
|
the Joint Ore Reserves Committee of the Australasian Institute of
Mining and Metallurgy, Australian Institute of Geoscientists and
Minerals Council of Australia |
“Law” |
|
any applicable statute, law, rule, regulation, ordinance, code,
order, judgment, injunction, writ, decree, directive, policy,
guideline, interpretation or rule of common law issued,
administered or enforced by any Government Authority, or any
judicial or administrative interpretation thereof |
“Listing Rules” |
|
the rules and regulations made by the FCA under the Financial
Services and Markets Act 2000, and contained in the FCA’s
publication of the same name |
“London Stock Exchange” or “LSE” |
|
London Stock Exchange plc or its successor |
“Longstop Date” |
|
31 December 2019 or such later date as may be agreed in writing by
Barrick and Acacia (with the Panel’s consent and (if such approval
is required) as the Court may approve) |
“Low Value” |
|
SRK valuation which 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. |
“Management and Administrative Services Agreement” |
|
the management agreement between the BTMCs and New OpCo |
“NASDAQ” |
|
the NASDAQ Global Select Market |
“NEMC” |
|
has the meaning given in paragraph 3 of this Announcement |
“Net Deferred Cash Consideration” |
|
has the meaning given in paragraph 3 of this Announcement |
“Net Proceeds” |
|
the cash proceeds actually received in cleared funds by Barrick or
any Barrick subsidiary (including Acacia or any of its
subsidiaries) in consideration of any Sale or Sales excluding any
escrow, holdback, deferred cash consideration or similar amounts
pursuant thereto at any time during the Sale Period after tax and
less any out of pocket transaction costs, fees or expenses incurred
by Barrick or any Barrick subsidiary in connection with such Sale
or Sales |
“New Barrick Shares” |
|
the new Barrick Shares to be issued pursuant to the
Acquisition |
“New Laws” |
|
the National Wealth and Resources (Permanent Sovereignty) Act,
2017; Natural Wealth and Resources Contracts (Review and
Re-Negotiation of Unconscionable Terms) Act, 2017; and the Written
Laws (Miscellaneous Amendments) Act, 2017 |
“New OpCo” |
|
the proposed new operating company in respect of the TMCs’
operations in Tanzania |
“New OpCo Shareholders’ Agreement” |
|
the shareholders' agreement between New OpCo and its
shareholders |
“No Export Letter” |
|
has the meaning given in paragraph 4 of this Announcement |
“NYSE” |
|
the New York Stock Exchange |
“NMGML” |
|
has the meaning given in paragraph 4 of this Announcement |
“Offer Document” |
|
If, with the consent of the Panel, Barrick elects to implement the
Acquisition by way of the Takeover Offer, the document to be sent
to (among others) Acacia Shareholders setting out, among other
things, the full terms and conditions of the Takeover Offer |
“Official List” |
|
the official list maintained by the FCA |
“Opening Position Disclosure” |
|
an announcement containing details of interests or short positions
in, or rights to subscribe for, any relevant securities of a party
to the offer if the person concerned has such a position, as
defined in Rule 8 of the Code |
“Overseas Shareholders” |
|
Acacia Shareholders who are resident in, ordinarily resident in, or
citizens of, jurisdictions outside Canada, the United States or the
United Kingdom or who are nominees of, or custodian or trustee for
the same |
“Panel” or “Takeover Panel” |
|
the UK Panel on Takeovers and Mergers |
“PCCB” |
|
has the meaning given in paragraph 4 |
“PML” |
|
has the meaning given in paragraph 4 of this Announcement |
“Possible Offer” |
|
has the meaning given in paragraph 4 of this Announcement |
“Preferred Value” |
|
SRK valuation which incorporates life-of-mine plans based on (i)
ore reserves and certain higher confidence Mineral Resources for
Bulyanhulu and North Mara, and (ii) the Tier 1 LoM plan for
Buzwagi, modified to include all necessary adjustments and
modifications identified by SRK throughout its review process |
“Prohibition Notice” |
|
has the meaning given in paragraph 4 of this Announcement |
“Randgold” |
|
Randgold Resources Limited |
“Registrar of Companies” |
|
the Registrar of Companies in England and Wales |
“Regulation” |
|
Council Regulation (EC) 139/2004 (as amended) |
“Regulatory Information Service” |
|
any information service authorised from time to time by the FCA for
the purpose of disseminating regulatory announcements |
“Restricted Jurisdiction” |
|
any jurisdiction (excluding Canada, the United Kingdom and the
United States) where local laws or regulations may result in a
significant risk of civil, regulatory or criminal exposure for
Barrick or Acacia if information concerning the Acquisition is sent
or made available to Acacia Shareholders in that jurisdiction |
“Sale” or “Sales” |
|
has the meaning given in paragraph 3 of this Announcement |
“Sale Exploration Properties” |
|
has the meaning given in paragraph 2 of this Announcement |
“Sale Period” |
|
has the meaning given in paragraph 3 of this Announcement |
“Scheme” |
|
the scheme of arrangement proposed to be made under Part 26 of the
Companies Act between Acacia and the Scheme Shareholders, with or
subject to any modification, addition or condition approved or
imposed by the Court and agreed to by Acacia and Barrick |
“Scheme Court Hearing” |
|
the hearing of the Court to sanction the Scheme |
“Scheme Court Order” |
|
the order(s) of the Court sanctioning the Scheme under Part 26 of
the Companies Act |
“Scheme Document” |
|
the document to be sent to (among others) Acacia Shareholders
containing and setting out, among other things, the full terms and
conditions of the Scheme and containing the notices convening the
Court Meeting and General Meeting |
“Scheme Record Time” |
|
the time and date specified in the Scheme Document, expected to be
6.00 p.m. on the date of the Scheme Court Hearing or such later
time as Acacia and Barrick may agree immediately prior to the
Effective Date |
“Scheme Shareholders” |
|
the holders of Scheme Shares |
“Scheme Shares” |
|
all Acacia Shares which are:
- in issue as at the date of the Scheme Document;
- (if any) issued after the date of the Scheme Document and prior
to the Scheme Voting Record Time; and
- (if any) issued on or after the Scheme Voting Record Time and
before the Scheme Record Time, in respect of which the original or
any subsequent holders thereof shall be bound by the Scheme or in
respect of which the holders thereof shall have agreed in writing
to be bound by the Scheme,
in each case other than the Excluded Shares |
“Scheme Voting Record Time” |
|
the time and date specified in the Scheme Document by reference to
which entitlement to vote on the Scheme will be determined |
“SEC” |
|
the U.S. Securities and Exchange Commission |
"Second Committee" |
|
has the meaning given in paragraph 10 of this Announcement |
“Second EPO” |
|
has the meaning given in paragraph 10 of this Announcement |
“Second PUSU Deadline” |
|
has the meaning given in paragraph 4 of this Announcement |
“Share for Share Exchange Ratio” |
|
for every Scheme Share: 0.168 New Barrick Shares |
“Special Resolution” |
|
the special resolution to be proposed by Acacia at the General
Meeting in connection with the approval of the Scheme and the
alteration of the Acacia Articles and such other matters as may be
necessary to implement the Scheme |
“SRK” |
|
SRK Consulting (UK) Limited |
“Substantial Interest” |
|
a direct or indirect interest in 20 per cent. or more of the
voting equity capital of an undertaking |
“Takeover Offer” |
|
means a take-over offer (as defined in Chapter 3 of Part 28 of the
Companies Act) to be made by or on behalf of Barrick to acquire the
entire issued and to be issued share capital of Acacia that Barrick
does not already own on the terms and conditions to be set out in
the Offer Document; |
“Third Party” |
|
any central bank, ministry, governmental, quasi-governmental,
supranational (including the European Union), statutory,
regulatory, environmental or investigative body, authority or
tribunal (including any national or supranational anti-trust,
competition or merger control authority, any sectoral ministry or
regulator and foreign investment review body), national, state,
municipal or local government (including any subdivision, court,
tribunal, administrative agency or commission or other authority
thereof), any entity owned or controlled by any of them, any
private body exercising any regulatory, taxing, importing or other
authority, trade agency, association, institution or professional
or environmental body in any jurisdiction; including for the
avoidance of doubt, the Panel |
“Tier 1 LoM plan” |
|
life-of-mine plans based on ore reserves only |
“TMCs” |
|
those Tanzanian incorporated subsidiaries of Acacia which operate
mines in Tanzania, namely BGML, NMGML and PML |
“TMC Shareholders’ Agreements” |
|
the shareholders' agreements between each TMC and its
shareholders |
“Transaction Committee” |
|
a committee formed by the Acacia Board comprising of the
Transaction Committee Directors |
“Transaction Committee Directors” |
|
all the directors of Acacia other than Stephen Galbraith |
“Transaction Documents” |
|
are expected (when finalized) to comprise of the following:
- the Framework Agreement;
- Amended and Restated MDAs;
- TMC Shareholders’ Agreements;
- the New OpCo Shareholders’ Agreement; and
- the Management and Administrative Services Agreement
|
“Transaction Documents Condition” |
|
the Condition set out in paragraph 13 of Part A of Appendix 1 to
this Announcement |
“TSF” |
|
has the meaning given in paragraph 4 of this Announcement |
“UK” or “United Kingdom” |
|
the United Kingdom of Great Britain and Northern Ireland |
“United States of America”, “United States” or “US” |
|
the United States of America, its territories and possessions, any
state of the United States of America, the District of Columbia and
all other areas subject to its jurisdiction and any political
sub-division thereof |
“US Holders” |
|
holders of Acacia Shares in the US, resident in the US or with a
registered address in the US, and any custodian, nominee or trustee
holding Acacia Shares for persons in the US or with a registered
address in the US |
“US Securities Act of 1933” |
|
the United States Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder |
“US Securities Exchange Act of 1934” |
|
the United States Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder |
“Wider Acacia Group” |
|
Acacia and the subsidiaries and subsidiary undertakings of Acacia
and associated undertakings (including any joint venture,
partnership, firm or company in which any member of the Acacia
Group is interested or any undertaking in which Acacia and such
undertakings (aggregating their interests) have a Substantial
Interest) |
“Wider Barrick Group” |
|
Barrick and the subsidiaries and subsidiary undertakings of Barrick
and associated undertakings (including any joint venture,
partnership, firm or company in which any member of the Barrick
Group is interested or any undertaking in which Barrick and such
undertakings (aggregating their interests) have a Substantial
Interest) |
For the purposes of this Announcement,
“subsidiary”, “subsidiary undertaking”, “undertaking”, “associated
undertaking” have the meanings given by the UK Companies Act as
amended.
References to an enactment include references to
that enactment as amended, replaced, consolidated or re-enacted by
or under any other enactment before or after the date of this
Announcement. All references to time in this Announcement are
to London time unless otherwise stated.
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