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Barrick Gold Corp. and Acacia Mining PLC have reached agreement on terms of a takeover deal that could put an end to a geopolitical quagmire that has engulfed both companies for more than two years.

On Friday, Barrick announced plans to acquire the 36.1 per cent of Acacia it doesn’t already own for US$428-million by paying 0.168 of its own stock for each Acacia share.

In 2017, the Tanzanian government accused London-based Acacia of US$200-billion in tax fraud and banned it from exporting gold and copper concentrate. The development crippled production at two of its three mines in the East African country. Tanzania has refused, for the most part, to even engage with Acacia in talks to end the dispute.

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Despite Barrick’s insistence that it wouldn’t budge from its original proposal, the Toronto-based miner increased the worth of its offer by 10 per cent.

In May, Barrick said it was willing to pay only 0.153 of its shares for each Acacia share, or about 9 per cent below the market value for the company at the time.

“It’s a fair offer and a good bump up," Peter Geleta, chief executive officer of Acacia, said in an interview on Friday.

Shares in Acacia rose by 20 per cent on the London Stock Exchange on Friday to close at 222 pence apiece.

The agreement with Barrick comes as Acacia faces an increasingly difficult operating environment in Tanzania, with production at its biggest mine set to grind to a halt.

Earlier this month, Tanzania banned Acacia from shipping gold out of its North Mara mine, pending a site inspection. This week, Tanzania’s environmental regulator ordered Acacia to shut its waste management facility at the same site by Saturday, citing environmental breaches. Without a tailings facility in operation, the mine can’t operate. Last year, North Mara produced 336,000 ounces of gold, accounting for two-thirds of Acacia’s already diminished output.

With Barrick set to take over the company, Mr. Geleta expressed optimism that Acacia’s operational problems will drift away over time. And there are early signs from the Tanzanians that could be the case.

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“We commend the two parties for the mutual agreement," a spokesperson with the Tanzanian government tweeted on Friday.

"We will eagerly wait for official communication from Barrick to chart the way forward.”

On two separate occasions over the past few years, Barrick announced tentative agreements with the government of Tanzania to end the dispute but neither pact got over the finishing line. Both times, Barrick said Acacia would pay Tanzania a US$300-million fine and agree to a profit-sharing plan with the government from then on. However, a few months ago, Barrick said that Tanzania wouldn’t consider any deal if Acacia remained as a counterparty. That event essentially forced Barrick into making a takeover attempt for Acacia as a way out of the morass.

In 2010, Barrick spun off a minority stake in Acacia (then African Barrick) in an attempt to lower its exposure to geopolitically risky and high-cost Africa. A few years later, Barrick almost sold its remaining stake to state-owned China National Gold Group Corp., but talks collapsed when the price of gold nosedived.

With Barrick now poised to take Acacia back into its fold, some observers think it will end up flipping the assets over the longer term.

“Any rational board will say, how can you operate in a country like this?” Kerry Smith, analyst with Haywood Securities Inc. said in an interview.

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“My expectation is that Barrick will liquidate all these assets and then be gone from Tanzania."

Mr. Smith says a state-owned Chinese firm is the likely and rational buyer of Acacia. With its immense resources, such a firm may be better equipped to deal with the whims of a capricious foreign government, such as Tanzania, he added.

“They’re not afraid to use their big stick if they have to.”

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