Response to Acacia’s announcement
PRESS RELEASE
NYSE : GOLD TSX : ABX
Response to Acacia’s announcement
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
TORONTO, June 26, 2 019 – Further to its announcement dated June 19, 2019 (“the Barrick
Announcement”), Barrick Gold Corporation (NYSE: GOLD) (TSX: ABX) (“Barrick” or the “Company”) today
provides the following response to the announcement made by Acacia Mining plc (“Acacia”) on June 24,
2019 headed “Response to announcement from Barrick regarding the situation in Tanzania and Acacia’s
mine plans” (“the Acacia Announcement”).
Barrick notes Acacia’s stated position that:
• Barrick acquiring the remaining shares in Acacia it does not currently own would be an attractive
solution for all key stakeholders subject to an offer price which is fair and commands the requisite
support of shareholders;
• unless a resolution is achieved in the near term, Acacia’s Tanzanian assets face further risks to
their operations and ability to deliver against their plans; and
• in the absence of a negotiated settlement and only as a fallback, Acacia has sought to protect
Acacia’s business through the contractual arbitrations, but has noted that there are significant
collateral risks in Acacia’s subsidiaries continuing to seek to protect their businesses through
maintaining the arbitrations pending a negotiated resolution.
Barrick continues to believe that the terms of its Proposal (as defined in the Barrick Announcement) reflect
the fair value of Acacia, not taking into account any further discount which could be applied to reflect the
significant risk inherent in the Acacia business and remaining uncertainties of any settlement with the
Government of Tanzania.
In the absence of a take -private transaction, Barrick does not consider there is any credible alternative
solution which will preserve, to the extent possible, value for all stakeholders.
Barrick has considered the statements made in the Acacia Announceme nt and has concluded that the
Acacia Announcement contains no information of which Barrick was not already aware. Barrick therefore
remains firmly of the view that certain assumptions made by Acacia in relation to its mine plans are not
appropriately risked or supportable and that adjustments should be made. Whilst Barrick does not consider
it necessary to respond to each and every statement made by Acacia in its announcement, it wishes to
underline the following key points:
• Barrick notes the reference to C anadian Institute of Mining, Metallurgy and Petroleum Definition
Standards (2014), (“CIM Standards”) in the Acacia Announcement, and fully endorses the Acacia
2018 Mineral Resources and Mineral Reserves Statement, which included the update to the
classification of previously reported Indicated Mineral Resources to the Inferred Resources
category at Bulyanhulu to reflect the wide spaced drill data for the Deep West zone of the orebody.
• Barrick maintains that the inclusion of the Deep West Inferred Mineral Resources inventory on an
equal footing to the Measured and Indicated Mineral Resources within the Optimisation Study of
Bulyanhulu materially overstates the value of the mine, is incon sistent with acceptable industry
practice and not in compliance with the CIM Standards. If Acacia’s Optimisation Study had been
compliant with the CIM Standards, Acacia would not have been able to attribute any economic
BARRICK GOLD CORPORATION PRESS RELEASE
value to the Deep West Inferred Resources, as per the CIM 2014 Definitions and Standards which
states that “Inferred Mineral Resources must not be included in the economic analysis, production
schedules, or estimated mine life in publicly disclosed Pre -Feasibility or Feasibility Studies, or in
the Life of Mine plans and cash flow models of developed mines” 1, the reasoning for which is that
Inferred Mineral Resources are based on very limited information, have a materially lower level of
confidence than Measured and Indicated Resources, may no t prove to be economic when further
drilling is completed, and thus cannot be assumed to fully convert to Mineral Reserves.
• Barrick also notes that Acacia’s rebuttal of Barrick’s views on conversion and dilution rates by
reference to the 96.5% reconcilia tion factor of gold mined versus the historical Mineral Resource
Model over the life of mine (“LOM”) is misleading. The 96.5% historic reconciliation is reflective of
Mineral Resources supported by 25m spaced drill sample data and development face sample data
and thus should not be considered applicable to the expected conversion of Deep West Inferred
Mineral Resources, which are based upon on an average of 200m spaced drill data. Barrick is
content with the utilization of the Measured and Indicated Resourc es by Acacia in its Optimisation
Study, but not the Inferred Resources in the Deep West. Furthermore, Barrick is of the opinion that
the Deep West Inferred Mineral Resources still require full geotechnical stress modelling and
therefore any current mine plans should acknowledge this related risk.
• The Barrick model attributes fair value to Bulyanhulu, reflecting the uncertainty of the Deep West
Inferred Mineral Resources currently defined with drill data at an average spacing of 200m. This
results in a grad e of 10.2g/t during steady state UG production. This steady state grade profile is
consistent with both the average LOM gold grade of 9.98 g/t achieved at Bulyanhulu and the
Bulyanhulu Proven and Probable Underground gold Mineral Reserve grade of 10.7 g/t gold (as of
31 December 2018). This contrasts to the assumed grade in the Acacia Optimisation Study of
12.3g/t during steady state UG production. In Barrick’s model, the Bulyanhulu grade drops to 8.6g/t
over the LOM after taking into account the initial low-grade Tailings Storage Facility (“TSF”) feed.
• The Barrick production and dilution rates are justified through the uncertainty inherent in the
Inferred Mineral Resource and the geotechnical stress regime, at 1.7 -2.6km below surface. The
previous diluti on rates achieved at Bulyanhulu are not reflective of the anticipated increased
geotechnical stress regime.
• Barrick notes that its additional US$50m capital expenditure modelled at Bulyanhulu and US$77m
at North Mara, has been benchmarked against its own similar-sized underground operations in
Africa and is not just based on conceptual studies. Notably, at North Mara the additional capital for
the TSF is reflective of the increased rate of water drawdown rate required from the TSF and
additional remediation work required to ensure safety of the existing TSF and construction of a fully
compliant new lined TSF facility together with the appropriate land acquisition costs.
Barrick intends to continue to engage on these points, and on the merits of its proposal, with shareholders,
Acacia’s Board of Directors, its management and other stakeholders.
Takeover Code notes
The Proposal is subject to the satisfaction of a number of customary conditions, including receiving the
recommendation of the Acacia board. Barrick reserves the right to waive all or any of such conditions at its
discretion. The Proposal does not constitute an offer or impose any obligation on Barrick to make an offer.
There can be no certainty that any offer for Acacia will ultimately take pl ace, nor as to the structure of any
such offer, should one be forthcoming, even if the pre -conditions are satisfied or waived. Barrick reserves
the right to: (a) vary the form and/or mix of consideration referred to in this announcement and/or introduce
other forms of consideration; and (b) make an offer or other proposal on less favourable terms than an
1 CIM Definition Standards for Mineral Resources & Mineral Reserves 2014, page 4 definition of “Inferred
Mineral Resources”.
BARRICK GOLD CORPORATION PRESS RELEASE
exchange ratio of 0.153 Barrick shares for each ordinary share of Acacia referred to in this announcement
with the agreement, recommendation or consent of the board of Acacia.
Barrick will have the right to reduce the number of new Barrick shares that Acacia minority shareholders
will receive under the terms of the Proposal by the amount of any dividend (or other distribution) which is
declared, paid or made by Acacia to Acacia shareholders.
This announcement does not amount to a firm intention to make an offer under Rule 2.7 of the Code, which
regulates the making of offers for public companies listed in the UK. There can be no certainty any offer will
be made, even if the pre-conditions referred to are satisfied or waived.
In accordance with Rule 2.6(a) of the Code, Barrick must, by not later than 5.00 p.m. on 9 July 2019, either
announce a firm intention to make an offer for Acacia in accordance with Rule 2.7 of the Code or announce
that it does not intend to make an offer, in which case the announcement will be treated as a statement to
which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the UK Takeover
Panel in accordance with Rule 2.6(c) of the Code.
A further announcement will be made as and when appropriate.
Enquiries:
Kathy du Plessis
Investor and Media Relations
+44 20 7557 7738
Mark Bristow
President and CEO
+1 647 205 7694
+44 788 071 1386
Website: www.barrick.com
Publication on Website
A copy of this announcement will be made available (subject to certain restrictions relating to persons
resident in restricted jurisdictions) at www.barrick.com no later than 12.00 noon (London time) on 27 June
2019 (being the business day following the date of this announcement) in accordance with Rule 26.1(a) of
the Code. The content of the website referred to in this announcement is not incorporated into and does
not form part of this announcement.
Overseas jurisdictions
The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom
may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other
than the United Kingdom should inform themselves about, and observe, any applicable requirements. The
information disclosed in this announcement may not be the same as that which would have been disclosed
if this announcement had been prepared in accordance w ith the laws of jurisdictions outside the United
Kingdom.
The Barrick shares mentioned in this announcement (the "Shares") have not been and will not be registered
under the US Securities Act of 1933 (the “Securities Act”) or under the securities laws of any state or other
jurisdiction of the United States. This announcement does not constitute an offer to sell, or the solicitation
of any offer to buy the Shares in the United States. Accordingly, the Shares may not be offered, sold, resold,
delivered, dist ributed or otherwise transferred, directly or indirectly, in or into the United States absent
registration under the Securities Act or an exemption therefrom, nor shall there by any sale of the Shares
in any jurisdiction in which such offer, solicitation or sale would be lawful.
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by reference in this press release, including any information
as to our strategy, projects, plans, or future financial or operating performance, constitutes “forward-looking
statements”. All statements, other than statements of historical fact, are forward -looking statements. The
words “will”, “imply”, “could”, “possible”, “seek”, “propose”, “may”, “can”, “should”, “could”, “would”, and
BARRICK GOLD CORPORATION PRESS RELEASE
similar expressions identify forward -looking statements. In particular, this press release contains forward -
looking statements including, without limitation, with respect to the future growth, results of operations,
performance, business prospects and opp ortunities of Barrick and Acacia, including gold production from
Acacia’s mines; the Proposal; the integration of Acacia’s business with the existing operations of Barrick;
the impact of the Proposal on the financial position of Barrick and Acacia; impairm ent charges to be
recorded by Barrick; and the outlook for Barrick’s and Acacia’s respective businesses and the gold mining
industry generally based on information currently available. These expectations may not be appropriate for
other purposes.
Forward-looking statements are necessarily based upon a number of estimates and assumptions including
material estimates and assumptions related to the factors set forth below that, while considered reasonable
by the Company as at the date of this press release in light of management’s experience and perception of
current conditions and expected developments, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. Known and unknown factors could cause actual resu lts
to differ materially from those projected in the forward -looking statements, and undue reliance should not
be placed on such statements and information. Such factors include, but are not limited to: expectations
regarding whether the Proposal will be f ormally announced including whether the pre -conditions to formal
announcement of the Proposal will be satisfied, and the anticipated timing of a formal announcement;
expectations regarding whether the Proposal will be completed, including whether any condi tions to
completion of the Proposal will be satisfied, and the anticipated timing for completion; the combined
company’s future 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; expectations regarding the receipt of any necessary regulatory and third party
approvals and the expiration of all relevant waiting periods; the anticipated n umber of Barrick common
shares to be issued as consideration for the Proposal, the expected total capitalization of Barrick on a
consolidated basis following the Proposal and the ratio of the Barrick common shares to be held by Barrick
shareholders and Acacia shareholders, respectively, following the Proposal; the anticipated benefits of the
Proposal; expectations regarding the value and nature of the consideration payable to Acacia shareholders
as a result of the Proposal; the anticipated mineral reserves of Barrick following completion of the Proposal;
and the expenses of the Proposal; 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
exploration and development; changes in mineral production performance, exploitation, and exploration
successes; risks associated with projects in the early stages of evaluation, and for which additional
engineering and other analysis is require d to fully assess their impact; 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 metal content of concentrate exports from Tanzania and related matters;
diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges
associated with the constructi on of capital projects; 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 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 regulat ions 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 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 Company’s reputation due to the actual or perceived
occurrence of any number of events, in cluding negative publicity with respect to the Company’s handling
of environmental matters or dealings with community groups, whether true or not; the possibility that future
BARRICK GOLD CORPORATION PRESS RELEASE
exploration results will not be consistent with the Company’s expectations; risks that exploration data may
be incomplete and considerable additional work may be required to complete further evaluation, including
but not limited to drilling, engineering and socioeconomic studies and investment; risk of loss due to acts
of war, terroris m, sabotage and civil disturbances; 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 opportuniti es that may be presented to, or pursued by, the
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 employe es;
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 labor. In addition, there
are risks and hazards associated with t he 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 th e risk of
inadequate insurance, or inability to obtain insurance, to cover these risks).
Many of these uncertainties and contingencies can affect our actual results and could cause actual results
to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf
of, us. Readers are cautioned that forward -looking statements are not guarantees of future performance.
All of the forward -looking statements made in this press release are qualified by these cautionary
statements. Specific reference is made to the most recent Form 40- F/Annual Information Form on file with
the United States Securities and Exchange Commission (“ SEC”) and Canadian provincial securities
regulatory authorities for a more detailed discussion of s ome 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.
The Company disclaims any intention or obligat ion to update or revise any forward -looking statements
whether as a result of new information, future events or otherwise, except as required by applicable law.