e425
Filed by Randgold Resources Limited
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Moto Goldmines Limited
Commission File Number: 132-02694
PRESS RELEASE:
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 p.m. (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.
Motos 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:
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approximately 7%, based on the closing price of Motos 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 Randgolds
ADSs on NASDAQ, adjusted to Canadian dollars, as at 4 August 2009; and |
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approximately 51%, based on the 20-day volume-weighted average price of Motos
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 Randgolds ADSs on NASDAQ, adjusted to Canadian dollars, to 4 August
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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 Randgolds and AngloGolds regional business knowledge and government relationships with
their extensive gold mining expertise.
Randgold and Moto see the following key attractions to the Randgold Transaction:
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Ability to bring the Moto Gold Project into production. Moto shareholders will benefit from
Randgolds 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. Randgolds 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. |
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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 Randgolds and AngloGolds 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. |
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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. |
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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 Motos shares on the Toronto Stock Exchange and the London Stock
Exchanges Alternative Investment Market, adjusted to United States dollars, to 4 August 2009. |
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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. |
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Participation in the upside in Randgolds portfolio. Moto shareholders will participate in
any upside in Randgolds existing assets and successful exploration portfolio. In particular,
Randgold sees significant continued exploration upside at both Loulo and Tongon, whilst
Massawa and Randgolds latest discovery, Gounkoto, have the potential to be truly world class
assets. |
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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. |
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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
Randgolds 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 Randgolds 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. Randgolds 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
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Dr Mark Bristow
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Kathy du Plessis |
Chief Executive
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Investor & Media Relations |
Tel: +44 788 071 1386
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Tel: +44 20 7557 7738 |
Tel: +44 779 775 2288
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email: randgoldresources@dpapr.com |
Moto Goldmines Limited
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Andrew Dinning
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Mark Arnesen |
President and Chief Operating Officer
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Financial Director and Chief Financial Officer |
Tel: +61 8 9273 4222
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Tel: +61 8 9273 4222 |
email: adinning@motogoldmines.com
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email: marnesen@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
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Randgold Resources Limited website:
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www.randgoldresources.com |
Moto Goldmines Limited website:
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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 8.87 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
dIvoire, 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 dIvoire, Burkina
Faso, Ghana, Senegal and Tanzania. The acquisition of Moto will increase Randgolds attributable
mineral reserves, measured and indicated resources, and inferred resources by 1.9 Moz, 4.0 Moz, and
3.9 Moz, 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 LOffice des Mines dor de Kilo-Moto (OKIMO) and Moto and
covers an area of approximately 1,836 km2 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 2.4 million ounces in the first
five years of operation, with total mineral reserves estimated to be 5.5 Moz. The Project hosts
significant inferred mineral resources of 11.2 Moz 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 Projects 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 Projects 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 Projects 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 Randgolds 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 Motos 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 SECs 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 SECs 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