Acacia Mining - ACA ⛏

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1

Worth investigating, here’s a brief overview. DO YOUR OWN RESEARCH THOUGH

At 260p, Acacia Mining (LON:ACA) is worth £910million. By any measure, this is cheap when you look at the company’s staggering world-class asset portolio alongside the extraordinary tonnage of stockpiled gold ore (unable to be exported).

Prior to the mammoth disruption that has been Magufuli’s well-orchestrated shenanigans, Acacia was priced at 574p.

Thus, Acacia’s shares will need to double from here for the company to be valued at anything approaching a reasonable valuation (comparable with its peers). Of course, if that happens it will mean the market will have woken up by then.

Have a look at the last 2 years of the company to gain an idea as to how big of an effect the Magufuli’s intervention was, their supply lines are hitting above targets and their huge stock pile of gold ore during a high in gold prices. Also possible buyout by Barrack fairly soon.

at 260p, and disregarding the rising gold price – should the company’s valuation begin to normalise, Acacia is trading well below its intrinsic and optionality value.

Optionality value, for those unaware, is based on the quality of a company’s project pipeline (exploration projects that have an implied value based on the varying degrees of probability that the projects will eventually be developed into producing mines).

The share price should, therefore, could begin to normalise to ‘pre-Magufuli intervention’ prices (574p) where the company reported annual gold production of 829,705 ounces, EBITDA of US$415 million, operational cash flow of US$318 million, and a substantive increase in the net cash position to US$219 million on $1.1billion of revenue

Good luck, and always do your research!

2 Likes
2

Up 18% today! Making me around £5 up

3

Just checked its shooting up today. What’s going on? I bought some a few months ago. Do you sell now or wait???

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Barrack look like they will buy Acacia?

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What happens to our shares if Acacia is taken over?

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If a certain majority agrees, you get paid per share what Barrick offers.

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Not really. The Acacia shares will convert into Barrick shares. I am holding a big position on Acacia through my SIPP and IMO, ideally Acacia valuation should have been more than current offer and value will unlock when after this merger. Unfortunately due to some personal egos, GoT doesn’t want to deal with Acacia directly so the dispute will be resolved only after this merger. I will continue to hold Converter Barrick shares until the dispute is resolved and then hopefully I will get much better return then the current one

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Are Barrick on Freetrade?

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Is there a source you can give me for that? All articles i have seen disclose it as buyout, not merger. Thanks

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(Sharecast News) - Acacia Mining has agreed to be bought by Barrick Gold in a deal that values the UK gold miner at about £951m and concludes two months of fractious talks between the companies.
Barrick, the world’s biggest gold miner, said it would pay 0.168 new Barrick share for each share it does not own of the FTSE 250 company. The Canadian miner already owns 64% of Acacia.

Acacia shareholders will also receive any special dividends from the sale of Acacia Exploration Properties and any deferred cash dividends. Acacia is selling its exploration assets in Tanzania, Kenya, Mali and Burkina Faso and Barrick will continue with the sale.

Based on the closing price for Barrick shares in New York on 18 July, the deal values Acacia shares at about 232p each. The price is 53.5% more than Acacia’s closing share price on 20 May, the day before takeover talks were announced, and 24.2% higher than Acacia’s closing share price on 18 July.

Acacia shares rose 19% to 220p at 0810 BST.

The agreed price is an improvement on Barrick’s indicative offer in May of 0.153 of its own shares for each Acacia share. Canada’s Barrick and Acacia disputed Acacia’s valuation and plans in a series of public comments during takeover talks. Barrick’s increased offer reflects a higher valuation for the assets that were part of the dispute.

Acacia, which owns three goldmines in Tanzania, is in dispute with Tanzania’s government over tax and has not able to export gold-bearing ore since 2017.

Barrick claimed Acacia’s relationship with Tanzania’s government was damaged beyond repair and that the UK company’s shareholders faced a catastrophic loss of value if they did not accept its offer. Acacia replied that it was still talking to high-level government officials and that a takeover had to be at the right price.

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Although the term is used as buyout but IMO it’s not a buyout as they are offering 0.168 new shares of Barrick so effectively it is a merger

12

This is interesting, what happens if a stock on Freetrade merges with and converts shares to a stock not on freetrade?

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It will be a forced sale before the closing date for this arrangement. Luckily I am holding Acacia on other platform where Barrick is available so no issue for me. I am seriously hoping that FT should be able to roll.out new platform which will give them flexibility for wider coverage than current one. To be honest it is a pain at the moment as whenever I recommend FT to my friends, they find it like a prototype due to non availability of lots of popular Shares as well as missing Limit order functionality.

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That would be annoying if the price of the Barrick shares you would get values the Acacia shares higher than the current market price

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The best source would be to go to HL website and check Acacia share price and there you will find company updates under “news” as well as “announcement”
https://www.hl.co.uk/shares/shares-search-results/a/acacia-mining-plc-ordinary-10p

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FT should get Barrick on, can someone please confirm this?

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It don’t work like that mate. You will have to add them one future stocks or vote if they already on.

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Surely FT will have to/want to offer Barrick shares if Acacia shares get moved to them?

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That could be a challenge since Barrick is paying 0.168 of their own shares for 1 Acacia share.
Until fractional shares are released that will be a problem, it’s far from an easy conversion.

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I’ve been contacted to say I’ll have to sell my acacia mining shares if they are brought by barrick because its not listed by freetrade :frowning: Acacia has been doing so well recently too