Proposes business combination with Moto Goldmines

 

TIDMRRS TIDMMOE 
 
RNS Number : 8003V 
Randgold Resources Ld 
16 July 2009 
 

The headline for the Randgold Resources announcement released on 16 July 2009 at 
11:56 under RNS No 7874V should read Randgold Resources proposes business 
combination with Moto Goldmines. 
 
 
The announcement text is unchanged and is reproduced in full below. 
 
 
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 C$5.00 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 US$4.47 
per Moto share (C$5.00 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 US$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 US$244 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 US$63.26 per ADS, 
the Proposed Randgold Transaction values Moto at approximately US$488 million 
(C$546 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 C$4.70 per Moto share, is currently 
worth only C$4.59 and, since announcement of the Red Back Transaction, has 
traded as low as C$3.83; 
*  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 US$108 million, compared to US$10 million for Red Back's 
shares on the Toronto Stock Exchange and an aggregate of US$1 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 C$5.25 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. 
 
 
Current Status 
Subject to the fulfilment of the conditions described above, Randgold intends to 
proceed with the Proposed Randgold Transaction. However, shareholders are 
reminded that while Randgold has approached Moto about entering into the 
Proposed Randgold Transaction, to date, due to the restrictions imposed by the 
Red Back Agreement, there have been no negotiations with Moto, and to Randgold's 
knowledge the Red Back Agreement remains in full force and effect. There can be 
no assurance that the parties will enter into a definitive arrangement agreement 
for the Proposed Randgold Transaction, that the Proposed Randgold Transaction 
will be implemented, or that any other transaction will be entered into with 
Moto. Consequently, holders of Randgold and Moto securities are advised to 
continue to exercise caution when dealing in relevant securities until a further 
announcement is made. 
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: [phone]    | Tel: [phone]              | 
| Tel: [phone]      | email:                             | 
|                          | [e-mail]        | 
+--------------------------+------------------------------------+ 
 
 
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 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. 
 
 
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. 
 
 
In the event a transaction is entered into between Randgold and Moto, of which 
there can be no assurance, Randgold will file important documents with the SEC 
and with applicable Canadian securities regulatory authorities. In the event a 
transaction is entered into, investors and security holders are urged to 
carefully read all such documents, 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: 
 
 
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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