Randgold Resources Proposes business combination with Moto Goldmines
2009-07-16 07:18 ET - News Release
JERSEY, CHANNEL ISLANDS -- (MARKET WIRE) -- 07/16/09
RANDGOLD RESOURCES LIMITED
Incorporated in Jersey, Channel Islands
Reg. No. 62686
LSE Trading Symbol: RRS
Nasdaq Trading Symbol: GOLD
("Randgold")
Randgold Resources Proposes Business Combination with Moto Goldmines
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, 16 July, 2009 - Randgold Resources Limited
today announced that it has approached the Board of Directors
of Moto Goldmines Limited ("Moto") (TSX: MGL) (AIM: MOE) and proposed to
enter into an arrangement agreement providing for the exchange of each
outstanding common share of Moto for the equivalent of CUSD5.00 per share
(as at 15 July 2009) (the "Proposed Randgold Transaction"). Under the
Proposed Randgold Transaction, Moto shareholders would
receive 0.07061 of an ordinary share of Randgold (or, where
applicable, 0.07061 of an American Depositary Share ("ADS")
of Randgold) per Moto share. In addition, Moto shareholders would be
provided the option to elect to receive (in lieu of Randgold shares or
ADSs) cash consideration of USUSD4.47 per Moto share (CUSD5.00 based on the
noon exchange rate published by the Bank of Canada on 15 July 2009) 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 Proposed Randgold Transaction of USUSD244 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 USUSD244 million
to Moto shareholders.
As detailed more fully below, the Board of Randgold believes that the
Proposed Randgold Transaction is superior to the transaction proposed
by Red Back Mining Inc. ("Red Back") in the Red Back Agreement (as
defined below) (the "Red Back Transaction").
Based on the closing price of Randgold ADSs on 15 July 2009 of
USUSD63.26 per ADS, the Proposed Randgold Transaction values Moto at
approximately USUSD488 million (CUSD546 million) 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 and the closing price of Randgold's ADSs
on NASDAQ, adjusted to Canadian dollars, as at 15 July 2009;
* approximately 12%, based on the 20-day volume-weighted average price
of Moto's common shares on the Toronto Stock Exchange and the 20-day
volume weighted average price of Randgold's ADSs on NASDAQ, adjusted to
Canadian dollars, to 15 July 2009;
* approximately 11%, 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 Red Back Transaction and
the closing price of Randgold's ADSs on NASDAQ, adjusted to Canadian
dollars, as at 15 July 2009; and
* approximately 60%, 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 15 July
2009.
Joint Venture with AngloGold Ashanti
Randgold and AngloGold Ashanti Limited ("AngloGold") have agreed to
cooperate in respect of the Proposed Randgold Transaction. In that
regard, AngloGold has agreed to fully fund the cash alternative
described above in partial payment for an indirect 50% interest
in Moto which it would acquire upon completion of
the Proposed Randgold Transaction. Pursuant to AngloGold's agreement to
acquire its indirect interest as described, as is customary for
transactions of this nature, an application has been made by AngloGold
and is currently under consideration by the South African Reserve
Bank. In addition, following completion of the
Proposed Randgold Transaction, AngloGold would 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 would be appointed operator of the project.
Randgold and AngloGold have received the full support from their
respective boards of directors for the Proposed Randgold Transaction.
Neither Randgold nor AngloGold requires shareholder approval in order
to proceed with the Proposed Randgold Transaction.
Conditions to the Proposed Randgold Transaction
The Proposed Randgold Transaction is subject to Moto terminating its
arrangement agreement dated 1 June 2009 between Red Back and Moto, as
amended effective 26 June 2009 (the "Red Back Agreement"), Randgold and
Moto entering into a definitive arrangement agreement and Moto
announcing its recommendation of the Proposed Randgold Transaction.
The Proposed Randgold Transaction would also be subject to certain
other customary closing conditions, which would be set forth in a
definitive agreement governing the terms of the
Proposed Randgold Transaction and would be substantially similar to the
conditions set forth in the Red Back Agreement, including the receipt
of any regulatory approvals and the approval of
the Proposed 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 called to approve
the Proposed Randgold Transaction.
The definitive agreement would also provide that if Moto shareholders
elect to receive in aggregate more than the maximum aggregate amount of
cash offered under the Proposed Randgold Transaction, (a) the amount
of cash consideration available to Moto shareholders making a cash
election pursuant to the Proposed Randgold Transaction would be
allocated pro rata among all Moto shareholders making valid cash
elections; and (b) each Moto shareholder electing cash would
instead receive Randgold ordinary shares (or ADSs, as applicable) as
consideration for the amount by which the value of such Moto
shareholder's original cash election exceeds the amount of cash so
allocated to such Moto shareholder, in lieu of the cash
that the Moto shareholder would have received absent proration.
Superior proposal
Randgold believes that the Proposed Randgold Transaction satisfies all
the requirements of a "Superior Proposal", as defined in the Red
Back Agreement, as it:
* is reasonably capable of being completed without undue delay;
* relates to the acquisition of 100% of the outstanding Moto shares;
* is available to all Moto shareholders on the same terms and
conditions;
* is not subject to a due diligence condition; and
* is fully financed.
In addition, Moto shareholders would benefit from:
* a premium to the value of the Red Back Transaction of
approximately 9% based on the closing share prices of Red Back and
Randgold as at 15 July 2009 and approximately 17% based on the 20-day
volume-weighted average prices of Red Back and Randgold to 15 July
2009;
* the certainty of cash to lock in the offer premium. This compares to
the Red Back Transaction, which was initially worth CUSD4.70
per Moto share, is currently worth only CUSD4.59 and, since announcement
of the Red Back Transaction, has traded as low as CUSD3.83;
* the liquidity of Randgold's stock - over the last month the average
aggregate daily trading value of Randgold shares on the London Stock
Exchange and Randgold ADSs on NASDAQ was USUSD108 million, compared to
USUSD10 million for Red Back's shares on the Toronto Stock
Exchange and an aggregate of USUSD1 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 15 July 2009;
* the ability to participate in the upside of the Moto Gold Project as
well as Randgold's gold mines and world class development and
exploration pipeline; and
* Randgold's strong, experienced technical and management teams that
have proven their ability to bring assets into production in West
Africa which will be combined in the development of the Moto Gold
Project with the technical and financial capabilities of AngloGold,
Africa's largest gold producer.
Support from Moto shareholders
Shareholders of Moto representing an aggregate of 39.4 million shares,
or 36.1% of the issued and outstanding common shares of Moto, have
agreed to support the Proposed Randgold Transaction and to vote against
the existing Red Back Transaction if it is not withdrawn ("Irrevocable
Undertakings"). Of these, Irrevocable Undertakings representing
approximately 24.5 million shares (22.4%) remain binding in the event
of a higher competing offer from Red Back or any other third
party, and Irrevocable Undertakings representing
approximately 15.0 million shares (13.7%) may be terminated in the
event of a higher competing offer in excess of CUSD5.25 per Moto share.
Support from the Government of the Democratic Republic of the Congo
Randgold has received formal written support for the
Proposed Randgold Transaction from the Government of the Democratic
Republic of the Congo which recognises significant merits
in Randgold as operator of the Moto Gold Project.
About Randgold
Randgold is a gold mining and exploration company with its principal
activities focused on West and East Africa and stated reserves of
8.87 Moz. 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 Cote
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,
Cote d'Ivoire, Burkina Faso, Ghana, Senegal and Tanzania.
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".
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 has 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 does not undertake to update any forward-looking
statements that are incorporated by reference herein, except in
accordance with applicable securities laws.
2009-07-16 07:18 ET - News Release
JERSEY, CHANNEL ISLANDS -- (MARKET WIRE) -- 07/16/09
RANDGOLD RESOURCES LIMITED
Incorporated in Jersey, Channel Islands
Reg. No. 62686
LSE Trading Symbol: RRS
Nasdaq Trading Symbol: GOLD
("Randgold")
Randgold Resources Proposes Business Combination with Moto Goldmines
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, 16 July, 2009 - Randgold Resources Limited
today announced that it has approached the Board of Directors
of Moto Goldmines Limited ("Moto") (TSX: MGL) (AIM: MOE) and proposed to
enter into an arrangement agreement providing for the exchange of each
outstanding common share of Moto for the equivalent of CUSD5.00 per share
(as at 15 July 2009) (the "Proposed Randgold Transaction"). Under the
Proposed Randgold Transaction, Moto shareholders would
receive 0.07061 of an ordinary share of Randgold (or, where
applicable, 0.07061 of an American Depositary Share ("ADS")
of Randgold) per Moto share. In addition, Moto shareholders would be
provided the option to elect to receive (in lieu of Randgold shares or
ADSs) cash consideration of USUSD4.47 per Moto share (CUSD5.00 based on the
noon exchange rate published by the Bank of Canada on 15 July 2009) 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 Proposed Randgold Transaction of USUSD244 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 USUSD244 million
to Moto shareholders.
As detailed more fully below, the Board of Randgold believes that the
Proposed Randgold Transaction is superior to the transaction proposed
by Red Back Mining Inc. ("Red Back") in the Red Back Agreement (as
defined below) (the "Red Back Transaction").
Based on the closing price of Randgold ADSs on 15 July 2009 of
USUSD63.26 per ADS, the Proposed Randgold Transaction values Moto at
approximately USUSD488 million (CUSD546 million) 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 and the closing price of Randgold's ADSs
on NASDAQ, adjusted to Canadian dollars, as at 15 July 2009;
* approximately 12%, based on the 20-day volume-weighted average price
of Moto's common shares on the Toronto Stock Exchange and the 20-day
volume weighted average price of Randgold's ADSs on NASDAQ, adjusted to
Canadian dollars, to 15 July 2009;
* approximately 11%, 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 Red Back Transaction and
the closing price of Randgold's ADSs on NASDAQ, adjusted to Canadian
dollars, as at 15 July 2009; and
* approximately 60%, 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 15 July
2009.
Joint Venture with AngloGold Ashanti
Randgold and AngloGold Ashanti Limited ("AngloGold") have agreed to
cooperate in respect of the Proposed Randgold Transaction. In that
regard, AngloGold has agreed to fully fund the cash alternative
described above in partial payment for an indirect 50% interest
in Moto which it would acquire upon completion of
the Proposed Randgold Transaction. Pursuant to AngloGold's agreement to
acquire its indirect interest as described, as is customary for
transactions of this nature, an application has been made by AngloGold
and is currently under consideration by the South African Reserve
Bank. In addition, following completion of the
Proposed Randgold Transaction, AngloGold would 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 would be appointed operator of the project.
Randgold and AngloGold have received the full support from their
respective boards of directors for the Proposed Randgold Transaction.
Neither Randgold nor AngloGold requires shareholder approval in order
to proceed with the Proposed Randgold Transaction.
Conditions to the Proposed Randgold Transaction
The Proposed Randgold Transaction is subject to Moto terminating its
arrangement agreement dated 1 June 2009 between Red Back and Moto, as
amended effective 26 June 2009 (the "Red Back Agreement"), Randgold and
Moto entering into a definitive arrangement agreement and Moto
announcing its recommendation of the Proposed Randgold Transaction.
The Proposed Randgold Transaction would also be subject to certain
other customary closing conditions, which would be set forth in a
definitive agreement governing the terms of the
Proposed Randgold Transaction and would be substantially similar to the
conditions set forth in the Red Back Agreement, including the receipt
of any regulatory approvals and the approval of
the Proposed 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 called to approve
the Proposed Randgold Transaction.
The definitive agreement would also provide that if Moto shareholders
elect to receive in aggregate more than the maximum aggregate amount of
cash offered under the Proposed Randgold Transaction, (a) the amount
of cash consideration available to Moto shareholders making a cash
election pursuant to the Proposed Randgold Transaction would be
allocated pro rata among all Moto shareholders making valid cash
elections; and (b) each Moto shareholder electing cash would
instead receive Randgold ordinary shares (or ADSs, as applicable) as
consideration for the amount by which the value of such Moto
shareholder's original cash election exceeds the amount of cash so
allocated to such Moto shareholder, in lieu of the cash
that the Moto shareholder would have received absent proration.
Superior proposal
Randgold believes that the Proposed Randgold Transaction satisfies all
the requirements of a "Superior Proposal", as defined in the Red
Back Agreement, as it:
* is reasonably capable of being completed without undue delay;
* relates to the acquisition of 100% of the outstanding Moto shares;
* is available to all Moto shareholders on the same terms and
conditions;
* is not subject to a due diligence condition; and
* is fully financed.
In addition, Moto shareholders would benefit from:
* a premium to the value of the Red Back Transaction of
approximately 9% based on the closing share prices of Red Back and
Randgold as at 15 July 2009 and approximately 17% based on the 20-day
volume-weighted average prices of Red Back and Randgold to 15 July
2009;
* the certainty of cash to lock in the offer premium. This compares to
the Red Back Transaction, which was initially worth CUSD4.70
per Moto share, is currently worth only CUSD4.59 and, since announcement
of the Red Back Transaction, has traded as low as CUSD3.83;
* the liquidity of Randgold's stock - over the last month the average
aggregate daily trading value of Randgold shares on the London Stock
Exchange and Randgold ADSs on NASDAQ was USUSD108 million, compared to
USUSD10 million for Red Back's shares on the Toronto Stock
Exchange and an aggregate of USUSD1 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 15 July 2009;
* the ability to participate in the upside of the Moto Gold Project as
well as Randgold's gold mines and world class development and
exploration pipeline; and
* Randgold's strong, experienced technical and management teams that
have proven their ability to bring assets into production in West
Africa which will be combined in the development of the Moto Gold
Project with the technical and financial capabilities of AngloGold,
Africa's largest gold producer.
Support from Moto shareholders
Shareholders of Moto representing an aggregate of 39.4 million shares,
or 36.1% of the issued and outstanding common shares of Moto, have
agreed to support the Proposed Randgold Transaction and to vote against
the existing Red Back Transaction if it is not withdrawn ("Irrevocable
Undertakings"). Of these, Irrevocable Undertakings representing
approximately 24.5 million shares (22.4%) remain binding in the event
of a higher competing offer from Red Back or any other third
party, and Irrevocable Undertakings representing
approximately 15.0 million shares (13.7%) may be terminated in the
event of a higher competing offer in excess of CUSD5.25 per Moto share.
Support from the Government of the Democratic Republic of the Congo
Randgold has received formal written support for the
Proposed Randgold Transaction from the Government of the Democratic
Republic of the Congo which recognises significant merits
in Randgold as operator of the Moto Gold Project.
About Randgold
Randgold is a gold mining and exploration company with its principal
activities focused on West and East Africa and stated reserves of
8.87 Moz. 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 Cote
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,
Cote d'Ivoire, Burkina Faso, Ghana, Senegal and Tanzania.
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".
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 has 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 does not undertake to update any forward-looking
statements that are incorporated by reference herein, except in
accordance with applicable securities laws.
Greeny