TIDMRRS TIDMMOE TIDMAGD
RNS Number : 9519W
Randgold Resources Ld
05 August 2009
RANDGOLD RESOURCES LIMITED
Incorporated in Jersey, Channel Islands
Reg. No. 62686
LSE Trading Symbol: RRS
Nasdaq Trading Symbol: GOLD
("Randgold")
RANDGOLD RESOURCES AND MOTO GOLDMINES ENTER INTO BUSINESS COMBINATION
Not for release, publication or distribution, in whole or in part in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction.
London, United Kingdom, 5 August, 2009 - Randgold Resources Limited (LSE:RRS)
(NASDAQ:GOLD) ("Randgold") and Moto Goldmines Limited ("Moto" or the "Company")
(TSX:MGL) (AIM:MOE) today announced that the offer from Randgold, which was
announced on 27 July 2009, has been accepted by Moto and that they have entered
into an arrangement agreement (the "Arrangement Agreement") providing for the
exchange of each outstanding common share of Moto for the equivalent of
C$4.84 per share (as at 4 August 2009) on the basis of each Moto common share
being exchanged for 0.07061 of a Randgold ordinary share or American Depositary
Share ("ADS") of Randgold (the "Randgold Transaction").
Immediately prior to accepting the Randgold Transaction, Moto terminated the
existing arrangement agreement with Red Back Mining Inc. ("Red Back") in
accordance with its terms and initiated payment to Red Back of the agreed
termination fee of C$15,250,000. The voting agreements of the Moto directors
and officers regarding the Red Back transaction have also been terminated.
Moto has also cancelled the meeting of Moto shareholders and optionholders that
was scheduled for 4:00 pm (Vancouver, British Columbia time) on 5 August 2009.
Moto will advise of the new date for a meeting of Moto shareholders and
optionholders to consider the Randgold Transaction once that date is set.
Under the Randgold Transaction, Moto shareholders will receive 0.07061 of an
ordinary share of Randgold (or, where applicable, 0.07061 of an ADS of Randgold)
per Moto share. In addition, Moto shareholders will be provided the option to
elect to receive (in lieu of Randgold shares or ADSs) cash consideration of
US$4.47 per Moto share in respect of all or some of their Moto shares, subject
to proration based on an aggregate maximum cash amount payable to all Moto
shareholders under the Randgold Transaction of US$244 million (the "Cash
Election"). Assuming full take-up of the Cash Election Randgold would expect to
issue a total of approximately 3.9 million shares (including shares represented
by ADSs) and pay a total cash amount of approximately US$244 million to Moto
shareholders.
Moto's Board of Directors has unanimously recommended that the shareholders and
optionholders of Moto vote in favour of the Randgold Transaction. Concurrently
with Moto entering into the Arrangement Agreement with Randgold, the directors
and officers of Moto have entered into voting agreements in respect of the
Randgold Transaction (representing an aggregate of 2,782,472 million shares
(2.5%) of Moto). Together with the support of shareholders of Moto representing
an aggregate of 39.4 million shares, a total of 42.2 million shares, or 38.2% of
the issued and outstanding common shares of Moto, have agreed to support the
Randgold Transaction. In addition, Randgold has received formal written support
for the Randgold Transaction from the Government of the DRC.
Based on the closing price of Randgold ADSs on NASDAQ on 4 August 2009 of
US$64.11 per ADS, the Randgold Transaction values Moto at approximately US$500
million (C$534 million based on the noon exchange rate published by the Bank of
Canada on 4 August 2009) and represents a premium to Moto shareholders of:
* approximately 7%, based on the closing price of Moto's common shares on the
Toronto Stock Exchange as at 29 May 2009, the last business day prior to the
announcement of the offer by Red Back (the "Red Back Transaction") and the
closing price of Randgold's ADSs on NASDAQ, adjusted to Canadian dollars, as at
4 August 2009; and
* approximately 51%, based on the 20-day volume-weighted average price of
Moto's common shares on the Toronto Stock Exchange to 29 May 2009, the last
business day prior to the announcement of the Red Back Transaction and the
20-day volume weighted average price of Randgold's ADSs on NASDAQ, adjusted to
Canadian dollars, to 4 August 2009.
Joint Venture with AngloGold Ashanti
Randgold and AngloGold Ashanti Limited ("AngloGold") have agreed to cooperate in
respect of the Randgold Transaction. In that regard, AngloGold has agreed to
fully fund the Cash Election described above in partial payment for an indirect
50% interest in Moto which it will acquire upon completion of the Randgold
Transaction. In addition, following completion of the Randgold Transaction,
AngloGold will be jointly responsible with Randgold for funding the development
of the Moto Gold Project for the collective benefit of the shareholders of all
three companies. Randgold will be appointed operator of the project.
Randgold and AngloGold have received the full support from their respective
boards of directors for the Randgold Transaction. Neither Randgold nor
AngloGold requires shareholder approval in order to proceed with the Randgold
Transaction.
Key benefits of the Randgold Transaction to Moto shareholders
Randgold is a gold producer with a proven track record of finding, financing,
developing and operating mines in West Africa. Randgold has a history of
building strong relationships with the governments in whose countries it
operates, especially in Francophone Africa, and has a proven track record of
delivering profits and real value to shareholders through long term disciplined
growth based on maintaining a pipeline of high-quality development projects,
strict cost control and operational excellence. AngloGold is one of the largest
gold producers in the world with meaningful production and exploration
activities in Africa, including exploration activities in the Democratic
Republic of the Congo ("DRC"). The agreement to develop jointly the Moto Gold
Project combines Randgold's and AngloGold's regional business knowledge and
government relationships with their extensive gold mining expertise.
Randgold and Moto see the following key attractions to the Randgold Transaction:
* Ability to bring the Moto Gold Project into production. Moto shareholders
will benefit from Randgold's strong, experienced technical and management teams
that have proven their ability to bring assets into production in West Africa.
Randgold and AngloGold, together, bring the scale and the access to capital
required to bring the Moto Gold Project into production, together with their
experience in governmental relationships. Randgold's capital projects team is
the same team that has successfully built three mines in West Africa, including
one underground mine, and has proven its ability to build mining projects to
first world standards within acceptable capital constraints.
* Political support and regional knowledge. Randgold has a successful track
record of unlocking the mineral wealth of other countries in the region, in
particular in Francophone Africa, whilst at the same time being regarded as a
good corporate citizen and socially responsible. Across its six operations in
three West African countries, together with its Geita gold mine in Tanzania,
AngloGold has a well established mining track record in West and Eastern Africa.
AngloGold has been a joint venture partner with Randgold in the Morila mine in
Mali since July 2000, where the two companies continue to enjoy a successful
partnership. Following its business combination with Ashanti Goldfields Company
Limited in April 2004, AngloGold acquired exploration properties in the DRC,
with current greenfield exploration activities focused around the town of
Mongbwalu in the north-eastern part of the country. In addition to its
extensive exploration activities in the north-east, AngloGold also maintains a
fully staffed country office in the DRC capital, Kinshasa. As such, Randgold
and Moto believe that Randgold's and AngloGold's relationships in Africa will
assist in unlocking the value of the Moto Gold Project. Randgold has received
formal written support for the Randgold Transaction from the Government of the
DRC.
* Continued participation in the Moto Gold Project. Moto shareholders, through
their interest in the enlarged Randgold, will continue to benefit from any
upside in the Moto Gold Project when it is developed by Randgold and AngloGold.
* Liquidity. Over the last month the average aggregate daily trading value of
Randgold shares on the London Stock Exchange and Randgold ADSs on NASDAQ was
US$95 million, compared to an aggregate of US$2 million for Moto's shares on the
Toronto Stock Exchange and the London Stock Exchange's Alternative Investment
Market, adjusted to United States dollars, to 4 August 2009.
* Diversification of risk. Through their continued participation in the
enlarged Randgold, Moto shareholders will have an interest in a company that is
active across West and Central Africa, with assets that span the developmental
lifecycle, from exploration and highly prospective opportunities through to
immediately pre-development projects and producing assets.
* Participation in the upside in Randgold's portfolio. Moto shareholders will
participate in any upside in Randgold's existing assets and successful
exploration portfolio. In particular, Randgold sees significant continued
exploration upside at both Loulo and Tongon, whilst Massawa and Randgold's
latest discovery, Gounkoto, have the potential to be truly world class assets.
* Financial strength in challenging times. Randgold and AngloGold are well
funded and, together with their existing strong cash flows from operations, are
capable of funding current development and future projects, including the Moto
Gold Project.
* Ability to exit for certain value at a premium. In the event that any Moto
shareholder is not attracted to the merits of the Randgold Transaction as
outlined above, an option to elect for up to 100% cash consideration (subject to
proration) and lock in the premium being offered is available.
Transaction
The Randgold Transaction will be carried out by way of statutory plan of
arrangement, on substantially similar terms to that which had been contained in
the arrangement agreement with Red Back. On closing of the Randgold
Transaction, Moto will become indirectly jointly-owned by Randgold and
AngloGold. Under the terms of the Randgold Transaction, assuming that Moto
shareholders elect to receive the maximum aggregate amount of cash offered under
the Cash Election, being US$244 million, it is expected that Randgold will issue
approximately 3.9 million shares (including shares represented by ADSs) to Moto
shareholders as consideration, representing approximately 4.6% of Randgold's
shares in issue following closing. If no Moto shareholders elect to receive the
Cash Election, it is expected that Randgold would issue approximately 7.8
million shares (including shares represented by ADSs) to Moto shareholders as
consideration, representing approximately 8.6% of Randgold's shares in issue
following closing.
If Moto shareholders elect to receive, in aggregate, more than the maximum
aggregate amount of cash offered under the Randgold Transaction, (a) the amount
of cash consideration available to Moto shareholders making a cash election
pursuant to the Randgold Transaction will be allocated pro rata among all Moto
shareholders making valid cash elections; and (b) each Moto shareholder electing
cash will instead receive Randgold ordinary shares (or ADSs, as applicable) in
exchange for the remainder of their Moto shares for which they did not receive
cash due to proration.
Entitlements to fractions of a Randgold share (or ADS, as applicable), as well
as the entitlements of any Moto shareholders who are resident in any
jurisdictions where it is or may be unlawful for them to receive Randgold shares
(or ADS, as applicable), will be paid in cash pro rata to entitlements, based on
a whole Randgold share being valued at US$63.26, and such cash payments, if any,
will not reduce the amount available to pay the Cash Election.
The Arrangement Agreement includes a commitment by Moto not to solicit or
initiate discussions concerning alternative transactions, including the sale of
material assets. Moto has agreed to pay a break fee of US$14,627,300 to
Randgold in certain circumstances and has granted Randgold the right to match
competing offers. Randgold has agreed to reimburse Moto for the Red Back
termination fee in certain circumstances where the Randgold Transaction does not
close. Each party has also been provided with certain other rights,
representations and warranties and covenants customary for a transaction of this
nature.
Completion of the Randgold Transaction is subject to certain customary
conditions, including the receipt of all necessary court and regulatory
approvals, third party consents and the approval of the Randgold Transaction by
not less than 66 2/3% of the outstanding shares and options of Moto, voting as a
single class and a simple majority of the votes cast in person or by proxy by
Moto shareholders at the special meeting that will be called to approve the
Randgold Transaction.
Full details of the transaction will be included in a Moto Management
Information Circular to be filed with applicable Canadian securities regulatory
authorities and mailed to Moto shareholders in accordance with applicable
Canadian securities laws. Moto expects to mail the Management Information
Circular in September 2009. The transaction is expected to close in October
2009.
BMO Capital Markets has provided an opinion to the Moto Board of Directors that
the consideration to be received by the shareholders of Moto in connection with
the Randgold Transaction is fair, from a financial point of view, to Moto
shareholders. Randgold's financial advisor is HSBC Bank plc.
This release is for informational purposes only and it is not intended to be
proxy solicitation materials and it does not constitute an offer to sell or a
solicitation of an offer to buy securities of Randgold, Moto or AngloGold.
ENQUIRIES:
For further information, please contact:
Randgold Resources Limited
+---------------------------------+------------------------------------+
| Dr Mark Bristow | Kathy du Plessis |
| Chief Executive | Investor & Media Relations |
| Tel: +44 788 071 1386 or | Tel: +44 20 7557 7738 |
| Tel: +44 779 775 2288 | email: randgoldresources@dpapr.com |
+---------------------------------+------------------------------------+
Moto Goldmines Limited
+---------------------------------+--------------------------------------+
| Andrew Dinning | Mark Arnesen |
| President and Chief Operating | Financial Director and Chief |
| Officer | Financial Officer |
| Tel: +61 8 9273 4222 | Tel: +61 8 9273 4222 |
| email: | email: marnesen@motogoldmines.com |
| adinning@motogoldmines.com | |
+---------------------------------+--------------------------------------+
RFC Corporate Finance Ltd (Nominated Advisor to Moto for the purposes of AIM)
+---------------------------------+
| Steve Allen |
| Tel: +61 8 9480 2508 |
| email: Steve.Allen@rfc.com.au |
| |
+---------------------------------+
GMP Securities Europe LLP (AIM Broker to Moto)
+---------------------------------+
| James Cassley |
| Tel: +44 20 7647 2803 |
| email: |
| james.cassley@gmpeurope.com |
| |
+---------------------------------+
+----------------------------------------------------------------------+
| |
| |
| Randgold Resources Limited website: www.randgoldresources.com |
+----------------------------------------------------------------------+
| Moto Goldmines Limited website: www.motogoldmines.com |
+----------------------------------------------------------------------+
About Randgold
Randgold is a gold mining and exploration company with its principal activities
focused on West and East Africa and stated reserves of 8.87Moz. In Mali,
Randgold has an 80% controlling interest in the Loulo mine, which is currently
mining from two open pits and has just commenced mining from one underground
mine whilst developing a second underground mine. In the Loulo region,
Gounkoto, on the Loulo permit, is shaping up as a significant new discovery.
Also in Mali, Randgold owns a 40% interest in the Morila Joint Venture, the
owner of the Morila mine, which it also operates. In Côte d'Ivoire, Randgold
owns an effective 84% controlling interest in the Tongon development project,
where it has commenced construction and expects to be in production towards the
end of 2010. In Senegal, Randgold has a new discovery, Massawa, which is at
prefeasibility stage and which it believes has multi million ounce potential and
the makings of a world-class orebody. Randgold also has exploration permits and
licenses covering substantial areas in Mali, Côte d'Ivoire, Burkina Faso, Ghana,
Senegal and Tanzania. The acquisition of Moto will increase Randgold's
attributable mineral reserves, measured and indicated resources, and inferred
resources by 1.9Moz, 4.0Moz, and 3.9Moz, respectively.
About Moto
Moto is an emerging gold producer committed to developing its key asset, a 70%
interest in the Moto Gold Project ("the Project") which is one of the largest
undeveloped gold deposits in Africa. The project is a joint venture between
L'Office des Mines d'or de Kilo-Moto ("OKIMO") and Moto and covers an area of
approximately 1,836km2 with significant mineral resources and growth potential.
The company completed an Optimized Feasibility Study in March 2009 which
contemplates an open pit and underground mining operation producing
approximately 2.4Moz in the first five years of operation, with total mineral
reserves estimated to be 5.5Moz. The Project hosts significant inferred mineral
resources of 11.2Moz which provide a solid platform for growth. As at 31 March
2009, Moto had gross assets of approximately AUS$245.8m. For the year ended 31
December 2008, Moto made a net loss of approximately AUS$14.1m.
The information in this news release that relates to the Moto Gold Project's
Mineral Resources is based on information compiled by Rick Adams and Ted Hansen
who are members of the Australasian Institute of Mining and Metallurgy (AusIMM)
and are qualified persons under NI 43-101. Rick Adams and Ted Hansen are
directors of Cube Consulting Pty Ltd and consent to the inclusion in this report
of the information, in the form and context in which it appears.
The information in this news release that relates to the Moto Gold Project's
open pit Mineral Reserves is based on information compiled by Cube Consulting
Pty Ltd under the direction of Quinton de Klerk who is a member of the
Australasian Institute of Mining and Metallurgy (AusIMM) and a qualified person
under NI 43-101. Quinton de Klerk is a director of Cube Consulting Pty Ltd and
consents to the inclusion in this report of the Information, in the form and
context in which it appears.
The Information in this news release that relates to the Moto Gold Project's
underground Mineral Reserves is based on information compiled by SRK Consulting
Pty Ltd under the direction of Paul Kerr who is a member of the Australasian
Institute of Mining and Metallurgy (AusIMM) and a qualified person under NI
43-101. Paul Kerr is an employee of SRK Consulting Pty Ltd and consents to the
inclusion in this report of the Information, in the form and context in which it
appears.
Legends
HSBC, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively for Randgold and no one else in
connection with the Randgold Transaction and will not be responsible to anyone
other than Randgold for providing the protections afforded to clients of HSBC,
nor for providing advice in relation to the Randgold Transaction, the contents
of this announcement or any other matter referred to herein.
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
Except for the historical information contained herein, the matters discussed in
this news release are forward-looking statements within the meaning of Section
27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities
Exchange Act of 1934, and applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to, statements with
respect to the future price of gold, the estimation of mineral reserves and
resources, the realization of mineral reserve estimates, the timing and amount
of estimated future production, costs of production, reserve determination and
reserve conversion rates. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "will", "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved". Assumptions upon which such forward looking
statements are based include that Randgold and Moto will be able to satisfy the
conditions in the Arrangement Agreement, that the required approvals will be
obtained from the shareholders of Moto, that all third party regulatory and
governmental approvals to the transaction will be obtained and all other
conditions to completion of the transaction will be satisfied or waived. Many
of these assumptions are based on factors and events that are not within the
control of Randgold or Moto and there is no assurance they will prove to be
correct. Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of Randgold and Moto to be materially
different from those expressed or implied by such forward-looking statements,
including but not limited to: risks related to the integration of the combined
companies, risks related to mining operations, including political risks and
instability and risks related to international operations, actual results of
current exploration activities, conclusions of economic evaluations, changes in
project parameters as plans continue to be refined, as well as those factors
discussed in the section entitled "Risk Factors" in Randgold's annual report on
Form 20-F for the year ended December 31, 2008 which was filed with the U.S.
Securities and Exchange Commission on May 15, 2009 and in the section entitled
"Risk Factors" in Moto's Amended and Restated Annual Information Form of the
year ended December 31, 2008. Although Randgold and Moto have attempted to
identify important factors that could cause actual results to differ materially
from those contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. Randgold and Moto do not undertake to update any
forward-looking statements herein, except in accordance with applicable
securities laws.
Cautionary note to US investors; the U.S. Securities and Exchange Commission
(the "SEC") permits companies, in their filings with the SEC, to disclose only
proven and probable ore reserves. We use certain terms in this release, such as
"resources", that the SEC does not recognise and strictly prohibits us from
including in our filings with the SEC. Investors are cautioned not to assume
that all or any parts of our resources will ever be converted into reserves
which qualify as 'proven and probable reserves' for the purposes of the SEC's
Industry Guide number 7.
Randgold and Moto will be filing important documents relating to the Randgold
Transaction with the SEC and with applicable Canadian securities regulatory
authorities, including a copy of the Arrangement Agreement. The description of
the Arrangement Agreement contained herein does not purport to be complete and
is qualified in its entirety by reference to the full text of the Arrangement
Agreement. Investors and security holders are urged to carefully read the
Arrangement Agreement and all such documents filed with the SEC and applicable
Canadian securities regulatory authorities, because these documents will contain
important information. Investors and security holders will be able to obtain a
free copy of such documents at the SEC's web site at www.sec.gov, at the website
of the Canadian securities regulators at www.sedar.com, or by directing a
request to Moto as provided above or to:
Randgold Resources Limited
David Haddon
General Counsel and Secretary
This information is provided by RNS
The company news service from the London Stock Exchange
END
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