BARRICK Gold has issued a cease and desist notice to AJN Resources, the Toronto-listed firm that claimed it had negotiated the purchase of a 10% stake in Kibali, currently held by the government of the Democratic Republic of Congo (DRC).
Citing Mark Bristow, CEO of Barrick Gold, Reuters said his company had not been consulted and that his company and AngloGold Ashanti – which both own 45% of the mine – held pre-emptive rights over the DRC government’s shares.
“From what little we know, it’s a deeply discounted transaction,” Bristow told the newswire of AJN’s offer. “It’s cheeky at best,” he said.
Based on a valuation made by Investec in 2014 of $2.1bn for a 45% stake in Kibali, the DRC’s stake – held throughSociete Miniere de Kilo-Moto (SOKIMO) is worth $467m, said Reuters. Kibali produced about 830,000 ounces of gold in 2019.
However, AJN is paying for the stake by offering 60% of its shares and a couple of board seats which does not give SOKIMO voting control. AJN is worth about C$12m, although its CEO, Klaus Eckhof, said there would be a rerating if the deal with the DRC is concluded.
Barrick and AngloGold say the proposed deal was prematurely announced; a view even SOKIMO expresses. Its chairwoman, Annie Kithima, told Reuters she was “surprised” by AJN’s statement and that the make-up of the board was still to be negotiated.
“The way AJN rushed to make this public is quite puzzling to me because at the board level we were still waiting for the full report from our management,” she told Reuters.
Eckhof said the MoU had been approved by the minister of portfolio, who manages state-owned enterprises.
