The partnership between Barrick Gold and the government will create a company called Twiga, which is the Swahili word for giraffe.
After making headlines earlier this year following its mega merger with Randgold Resources, international gold miner Barrick Gold (TSX:ABX,NYSE:GOLD) has entered into a new deal, this time with the government of Tanzania.
The deal was born out of an agreement to settle all disputes between the government of Tanzania and several companies that were previously owned by Acacia Mining. Barrick now manages the assets once controlled by Acacia, which was delisted from trading in mid-September.
The partnership between Barrick and the government will converge in a new operating company, dubbed Twiga Minerals; Twiga is the Swahili word for giraffe.
The newly established Twiga will manage the Bulyanhulu, North Mara and Buzwagi mines.
For its part, the government will acquire a free carried shareholding of 16 percent in each of the mines and will receive half of the economic benefits from taxes, royalties, clearing fees and participation in all cash distributions made by the mines and Twiga.
Barrick gained control of Acacia’s portfolio in September and has been working to reopen the North Mara project since, with a special emphasis on restoring social license.
“Rebuilding these operations after three years of value destruction will require a lot of work, but the progress we’ve already made will be greatly accelerated by this agreement,” said Mark Bristow, president and chief executive at Barrick, after the Twiga announcement.
“Twiga, which will give the government full visibility of and participation in operating decisions made for and by the mines, represents our new partnership not only in spirit but also in practice.”
Bristow also noted that Twiga will take a page out of Barrick’s operational handbook, replacing the expat workforce at the host of projects with local Tanzanians, something Barrick has done at its operations across the continent.
This recent news follows Barrick’s announcement last week that the gold major is well on track to meet its annual guidance of 5.1 million to 5.6 million gold ounces.
It’s been a busy year for the miner. Not only did it finalize its purchase of Randgold in a merger that rocked the precious metals sector, but Barrick has also partnered with Newmont Goldcorp (TSX:NGT,NYSE:NEM) to create Nevada Gold Mines, the world’s largest gold complex.
Shares of Barrick slid slightly on Monday (October 21) to trade at C$22.12.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.