Acacia Mining PLC (LON:ACA) reported a 19% increase in gold production for the second quarter as one of its top shareholders complained about Barrick Gold Corp.'s (NYSE:GOLD) plan to buy out the Tanzanian miner.
Legal and General, which owns just under 1% of Acacia, has become the latest investor to oppose Barrick’s preliminary offer to buy the 36.1% of the company it does not already own.
"In our opinion the proposal raises serious questions about fair treatment of minority shareholders and as such is not acceptable to us as long-term Acacia shareholders," said Nick Stansbury, a fund manager at Legal & General, at the weekend.
On Monday, Acacia said gold production rose to 158,774 ounces in the second quarter as higher output at its North Mara mine offset declines at Buzwagi and Bulyanhulu.
The company fixed production issues at North Mara, leading to a 39% increase in production to 119,113 ounces.
Acacia has been banned from exporting unprocessed metals, such as gold, from Tanzania since March 2017 due to a dispute with the country’s government over unpaid taxes.
Barrick wants to take over Acacia, arguing that is the only way to end the row. The Canadian miner has until Tuesday to make a formal offer.
Barrick’s initial proposal, announced in May, represented an 8% discount to Acacia’s share price. It has been opposed by shareholders including Fidelity and Odey Asset Management for undervaluing the company.
Barrick has been negotiating with the government on behalf of Acacia because it says Tanzania president John Magufuli has refused to deal directly with the London-listed miner.
Acacia claims Barrick has tried to take advantage of its issues in Tanzania to take over the firm at a mark-down price.
Stansbury added that Legal and General did not endorse “any historic activities by Acacia in Tanzania, and acknowledge[s] there is significant uncertainty about the value remaining in the company”.