Yahoo Finance Endeavour Mining dumps £3bn gold merger talks with Acacia
The £3bn gold mining merger talks between Acacia Mining and Canada’s Endeavour Mining have been brought to a halt, weeks after the Tanzanian government slapped Acacia with an export ban on its copper and gold concentrate.
In separate statements, made after the London markets closed, both companies said they ended preliminary talks due to doubts over whether the deal would deliver value to their respective shareholders.
The discussions were first revealed in January this year, raising investor hopes of a African giant to rival London’s largest gold miner Randgold Resources. The new company would have spanned Acacia’s assets in Tanzania and Endeavour’s mines in Côte d’Ivoire, Burkina Faso, Mali and Ghana.
But earlier this month Acacia’s value plummeted over 22pc to below 415p a share following the shock export ban by Tanzania’s government. Its share price has recovered to 475p but investors remain concerned that the ban could deliver a 30pc blow to the miner’s revenue and dash hopes that Acacia will be able to grow its cash flows and shareholder payouts.
Brad Gordon, Acacia’s chief executive, said the company still believes it can continue to unlock value at its Tanzanian mines. He added the company is also excited by the potential of the recently announced high-grade gold discovery in Kenya.
Acacia said initial tests on the “multi-million ounce” Kenyan gold stream suggested the find was “one of the highest grade projects in Africa today” and could be the first step in unearthing a gold-rich corridor in the east African country.
