A superior offer
July 20, 2009
Randgold Resources' offer for gold exploration and development company Moto Goldmines is superior to that of any rival bidder, Randgold Resources chief executive officer Mark Bristow said on Friday.
Bristow told a news conference that the Randgold Resources offer valued Moto at around C$488 million (or about $546 million) which represented a premium of about 7 percent.
The offer by the gold mining and exploration company rivals a C$513 million all-share offer for Moto Goldmines by Red Back Mining, launched in June.
Signalling a potential takeover battle for the African gold developer, which is sitting on an enormous gold deposit in the Democratic Republic of Congo (DRC), Randgold has proposed an exchange that would result in Moto shareholders receiving receive 0.07061 of an ordinary Randgold share or American Depositary Share (ADS) per Moto share.
In addition, Moto shareholders have the option of receiving C$5 ($4.47) a share instead of Randgold shares or ADSs. This is subject to proration based on aggregate maximum cash amount payable to all Moto shareholders of $244 million.
"Assuming full take-up of the cash alternative 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 $244 million to Moto shareholders," Randgold said in a regulatory notice.
"Suffice it to say we're very excited about the prospects. But we're under no illusion as to the challenges involved in starting up a gold mine in the DRC," Bristow said.
He added that the offer enjoyed the support of Moto's major shareholders.
He also stressed that the offer was a joint bid with AngloGold Ashanti.
The latter announced earlier that it has entered into a series of agreements with Randgold Resources, which, upon the closing of Randgold Resources' proposed acquisition of 100 percent of the issued share capital and outstanding options and warrants of Moto, would result in AngloGold Ashanti acquiring an indirect 50 percent interest in Moto for about $244 million in cash.
At the same time, AngloGold Ashanti and Randgold Resources will form a joint venture for the development and operation of the Moto gold project, located in the DRC.
Moto owns 70 percent of the project, which is at an advanced exploration stage with a JORC compliant Mineral Resource of some 22.5 million ounces of gold as published in January 2009.
The other 30 percent joint venture interest in the project is owned by Offices des Mines d'Or de Kilo-Moto (Okimo), a DRC state-owned company.
"Under the terms of the proposed joint venture agreement, Randgold Resources will be appointed operator of the project," said AngloGold in a separate statement.
AngloGold Ashanti chief executive officer Mark Cutifani said the company was pleased to build on the partnership it has enjoyed with Randgold at Morila over the past nine years
"Our agreement to acquire for cash a 50 percent joint venture interest on closing enables Randgold Resources to present terms to Moto which make its offer clearly superior to those already offered by Red Back Mining Inc. in its offer for Moto," Cutifani said.
"This partnership will benefit all stakeholders, especially the people of the DRC, by successfully developing one of the world's most exciting gold ore-bodies in a joint effort that shares risk and rewards," he said, adding that it was a further step in the company's Africa growth strategy.
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