Endeavour Mining Corp. (TSX:EDV) and Acacia Mining PLC (LSE:ACA) are discussing a merger, according to Bloomberg.
The merger negotiations also concern Barrick Gold Corp. (ABX, Financial) since the world’s largest gold producer holds a 64% stake in Acacia.
An eventual realization of the deal would allow Barrick to cut its stake in Acacia. Barrick is already considering divesting its stake in Acacia, however, since the asset is not considered an essential activity in the Canadian gold producer's portfolio, as reported by Bloomberg.
From Acacia, Barrick produced 468,000 ounces of gold in 2015, about 7.65% of the company's total gold output, at a cash cost per ounce of $772 and at an all-in sustaining cost (AISC) per ounce of $1,112.
Cash costs and AISC per ounce of gold produced from Acacia were 29.53% and 33.81% higher than the overall numbers sustained by Barrick in 2015.
Endeavour Mining closed at 22.83 Canadian dollars (approximately $17.37) per share on Friday, down 54 cents or -2.3% from the previous trading day, with a volume of 332,574 shares traded on the Toronto Stock Exchange.
Currently Endeavour Mining is trading around CA$22.59 per share and gained 12.26% year to date.
The analysts’ average target price is CA$22.83 and the recommendation rating is 1.7. The recommendation rating ranges between 1.0 (Strong Buy) and 5.0 (Sell).
The gold mining company had about CA$137.09 million in cash on hand and CA$139.29 million in total debt as of the most recent quarter.
Over the trailing 12 months, the company generated about CA$115.95 million from operations.
Acacia Mining closed at 418.20 pounds (approximately $509.07) per share, down 2.4 pounds or -0.57% from the previous trading day, with a volume of 730,051 shares traded on the London Stock Exchange.
Acacia Mining PLC is currently trading around 435.10 pounds per share, up 16.90 pounds per share, and gained 16.4% year to date.
The prevailing recommendation rating is between buy and hold.
Acacia Mining had 284.36 million pounds in cash on hand and 114.35 million pounds in total debt as of the most recent quarter.
Concerning Barrick, its shares went down on the New York Stock Exchange last Friday. Barrick closed at $16.87 per share, down 2 cents or -0.12% from the previous trading day.
Disclosure: I have no positions in any stock mentioned in this article.
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