Tanzania's largest gold miner Acacia Mining is in discussions with Endeavour Mining Corporation about a merger of their gold prospecting and production assets in Africa.
Acacia’s investor relations manager Giles Blackham said the talks may result in an agreement.
Endeavour’s market value is about $1.66 billion, and Acacia, which is 63.9 per cent majority owned by Barrick Gold Corporation of Canada, is valued at about $2.1 billion.
Acacia is listed on the London Stock Exchange while Endeavour is listed on the Toronto Stock Exchange.
Gold prices are expected to rise from the current $1,213.38 to about $1,500 per ounce by mid-2017 as a result of high demand for the precious metal, currently considered a safe haven for investors.
Barrick is keen to reduce its stake in Acacia to about 30 per cent, as the world’s leading gold producer does not consider the company a core asset.
Last year, several South African firms including Harmony Gold Mining Company Ltd and Sibanye Gold Ltd said they were considering buying the shares of Acacia that Barrick wanted to sell, but the transaction was not completed.
The preliminary discussions for the merger could result in a mining giant. Acacia’s Bulyanhulu, Buzwagi, and North Mara gold producing mines are located in northwest Tanzania.
Acacia, which has secondary listing on the Dar es Salaam Stock Exchange, owns exploration projects in Tanzania and western Kenya with a portfolio of prospecting interests in Burkina Faso and Mali.
Endeavour’s strategy and investor relations vice president Martino De Ciccio said the company routinely evaluates business development opportunities.
“As part of its regular discussions with peer group mining companies, Endeavour confirms preliminary discussions have taken place with Acacia on a confidential basis,” he said.