Nairobi — Many Tanzanian retail investors have probably lost a chance to buy shares in the largest goldmine in the world, after the Tanzania government failed to persuade African Barrick Gold to offload part of its shares on the Dar es Salaam Stock Exchange.

Barrick Gold's upcoming initial public offering will put 25 per cent of its enlarged share capital on the market as it bids to raise $1 billion to take its capitalisation to $4 billion; the firm starts pre-marketing the IPO this Monday, March 8, in stock exchanges in the United Kingdom, the United States, Australia, the United Arabs Emirates and Canada.

The EastAfrican has learnt that the government of Tanzania could have pressed for the IPO to be listed on the Dar es Salaam bourse parallel to the London Stock Exchange, but was too slow off the mark.

African Barrick Gold has mines in Buzwagi, Bulyanhulu, Tulawaka and North Mara representing 9.8 per cent of the total production of the parent company.

However, now that the Bank of Tanzania has announced that it is relaxing capital control rules to allow Tanzanians to participate in the IPO, the focus is on "warehousing" - whereby large fund managers such as the Unit Trust of Tanzania (UTT) acquire a chunk of shares at the London IPO for sale to Tanzanian citizens at a later date.

Deputy Minister for Finance and Economic Affairs Omar Yusuph Mzee told The EastAfrican in Dar es Salaam last week that the government is waiting to see the IPO prospectus before deciding on the country stance on the warehousing proposal.

The world's top gold miner said underwriters exercised in full their option to purchase an additional 14.21 million shares at a price of $36.95.

The prospectus was expected to be out last Friday and trading is pegged for this Monday.

Core Securities Ltd CEO George Fumbuka told The EastAfrican that the government should enable town councils surrounding the four mines to participate in the IPO in order to acquire a stake in their own mineral resources.

UTT has already used warehousing in buying shares in in Tanzania Breweries Ltd and Tanzania Cigarette Company, which were later transferred to UTT's collective investment scheme.

Laurian Malauri, chief executive officer of Orbit Securities Ltd, told The EastAfrican that the Tanzania government should warehouse the share offering by "buying a chunk of them on behalf of Tanzanians" using its own institution such as Umoja Trust Fund and later selling them to citizens at placement prices.

"To avoid foreign exchange fluctuations, the shares should be traded in local currency," he said.

DSE listing will commence after the closure of the IPO in London and ABG will furnish BoT with a written commitment showing preparation for listing of its shares at DSE.

ABG plans to use the IPO proceeds to repay debt and is expected to hold a net cash of $280 million after the listing.