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Randgold Resources proposes merger with Moto Goldmines to rival Red Back plan

Published: 22:42 16 Jul 2009 AEST

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Randgold Resources Ltd (LSE: RRS; Nasdaq: GOLD) proposed a business combination with Moto
Goldmines Ltd (TSX: MGL; AIM: MOE) at terms which it considers superior to those laid out in the merger deal announced by Moto and Red Back Mining Inc (TSX: RBI) last month.

Randgold said it has approached the Moto board with the proposal of a C$5.00 per share paper deal with a partial cash alternative.

Based on the closing price of Randgold’s American Depositary Shares on July 15, the deal would value Moto at approximately US$488 million, or C$546 million, Randgold said.
 
Red Back and Moto on June 1 announced a merger deal, under which Moto shareholders would receive 0.45 of a Red Back share for each Moto share, valuing the transaction at approximately C$513 million.  In a joint statement, the groups had said the combination creates a formidable African mining house and sets the stage for the development of the Moto gold project into a major African gold producer.

Randgold said that under the proposed deal, Moto shareholders would receive 0.07061 of an ordinary share of Randgold or, where applicable, 0.07061 of an ADS of Randgold per Moto share, or cash of US$4.47 per Moto share - C$5.00 based on the noon exchange rate published by the Bank of Canada on July 15 2009.

Randgold and AngloGold Ashanti Ltd have agreed to cooperate in respect of the Randgold/Moto merger. In that regard, AngloGold has agreed to fully fund the cash alternative described above in partial payment for an indirect 50 percent interest in Moto in Moto which it would acquire upon completion of the merger.

Randgold said the proposed deal is subject to Moto terminating its agreement with Red Back and Moto announcing its recommendation of the merger with Randgold.

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