Moto Goldmines backs Randgold, AngloGold Ashanti offer

Moto Goldmines Ltd has backed a takeover offer by African miners Randgold Resources Ltd and AngloGold Ashanti, saying it is superior to a competing offer.

Moto, which owns a project in the mineral-rich Democratic Republic of Congo, said the Randgold/AngloGold offer worth

C$546 million was better than one from Red Back Mining announced on June 1.

Randgold’s cash-and-shares offer was “financially superior” to the all-share offer from Red Back, but Red Back had until August 4 to amend its offer, Moto said.

Randgold has said it would offer 0.7061 of one of its London shares or C$5.00 in cash for each Moto share, with the total cash payment capped at $244 million.

Randgold said in a separate statement that on July 24, its offer valued each Moto share at C$5.01 while Red Back’s offer valued Moto shares at only C$4.50.

Moto shares fell 1.3 percent to C$5.19 by 1508 GMT.

Randgold also said it had support for its offer from shareholders representing 36 percent of Moto’s total shares and also support from the government of Congo.

The deal would boost growth prospects for Randgold as its extends its reach from West Africa into Congo, where many rivals have been wary of entering due to an unstable political situation and continued unrest in the east.

Randgold has experience in risky countries — it is currently developing the Tongon mine in Ivory Coast, which is still recovering from a bitter civil war in 2002-03.

South Africa’s AngloGold, the world’s third-biggest gold producer, will finance the cash portion of the offer as partial payment for a 50 percent interest in Moto. Randgold and AngloGold are already partners at the Morila gold mine in Mali.

Randgold would be the operator of the Moto project, which is located in the northeast of Congo and has a lease area of 1,841 sq km. In March, a feasibility study estimated the project contained 5.5 million ounces of probable mineral reserves.

Randgold shares rose 0.1 percent to 4,050 pence, lagging a 1.5 percent rise in the UK mining index, while AngloGold shares in Johannesburg shed 1.7 percent to 300.56 rand.

Source: Reuters

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