All amounts expressed in U.S. dollars unless
otherwise indicated
Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or the
“Company”) today announced that it has reached agreement on the
terms of a recommended share-for-share merger of Barrick and
Randgold Resources Limited (the “Merger”).
The Merger will create an industry-leading gold
company with the greatest concentration of Tier One Gold Assets1 in
the industry, led by a proven management team of owners. Superior
operating metrics, including the highest Adjusted EBITDA margin2
and the lowest total cash cost3 position among Senior Gold Peers4,
will support sustainable investment in growth and shareholder
returns.
The Merger is subject to approval by both sets
of shareholders, regulatory approvals and other customary closing
conditions.
It is intended that the Merger will be
implemented by means of a court-sanctioned scheme of arrangement of
Randgold Resources Limited (“Randgold”) and the Randgold
Shareholders under Article 125 of the Companies (Jersey) Law 1991,
with the entire issued and to be issued share capital of Randgold
being acquired by Barrick. Under the terms of the Merger, each
Randgold Shareholder will receive 6.1280 New Barrick Shares for
each Randgold Share. Following completion of the Merger, Barrick
Shareholders will own approximately 66.6 per cent and Randgold
Shareholders will own approximately 33.4 per cent of the New
Barrick Group on a fully-diluted basis.
Commenting on today’s announcement, John L.
Thornton, Executive Chairman of Barrick, said:
“The combination of Barrick and Randgold will
create a new champion for value creation in the gold mining
industry, bringing together the world’s largest collection of Tier
One Gold Assets, with a proven management team that has
consistently delivered among the best shareholder returns in the
gold sector over the past decade. Our overriding measure of success
will be the returns we generate and not the number of ounces we
produce, balancing boldness and prudence to deliver consistent and
growing returns to our fellow owners, a truly simple but radical
and achievable concept. There are no premiums in the merger because
we strongly believe in the opportunity to add significant value for
our shareholders from the disciplined management of our combined
asset base and a focus on truly profitable growth.”
Commenting on today’s announcement, Mark
Bristow, Chief Executive Officer of Randgold, said:
“Our industry has been criticised for its
short-term focus, undisciplined growth and poor returns on invested
capital. The merged company will be very different. Its goal will
be to deliver sector leading returns, and in order to achieve this,
we will need to take a very critical view of our asset base and how
we run our business, and be prepared to make tough decisions. By
employing a strategy similar to the one that proved very successful
at Randgold, but on a larger scale, the New Barrick Group will
leverage some of the world’s best mines and talent to create real
value for all stakeholders.”
The Merger is expected to close by Q1 2019.
Following completion of the Merger:
- John L. Thornton, Executive Chairman of Barrick, will become
Executive Chairman of the New Barrick Group.
- Mark Bristow, Chief Executive Officer of Randgold, will become
President and Chief Executive Officer of the New Barrick Group.
- Graham Shuttleworth, Finance Director and Chief Financial
Officer of Randgold, will become Senior Executive Vice President
and Chief Financial Officer of the New Barrick Group.
- Kevin Thomson, Senior Executive Vice President, Strategic
Matters of Barrick, will become Senior Executive Vice President,
Strategic Matters of the New Barrick Group.
- Two-thirds of the directors of the Board of the New Barrick
Group will be nominated by Barrick, and one-third will be nominated
by Randgold.
Shares in the New Barrick Group issued to
Randgold Shareholders will be admitted to trade on the New York
Stock Exchange and the Toronto Stock Exchange, subject to the
approval or acceptance of each exchange.
A Rule 2.7 announcement has been published in
accordance with the City Code on Takeovers And Mergers (United
Kingdom) and can be accessed at the following
link:https://www.barrick.com/files/br/Recommended-All-Share-Merger-of-Barrick-and-Randgold.pdf
or on Barrick’s SEDAR profile (www.sedar.com).
Joint Analyst and Investor Webcast and
Conference Call
Two analyst and investor conference calls to
discuss the Merger will be held on Monday, September 24, 2018.
1:00 a.m. Mountain Daylight Time3.00 a.m.
Eastern Daylight Time8.00 a.m. British Summer Time
- U.S. and Canada: 1-888-240-9284
- International: +1 323 794-2084
- Conference ID: 454952
10:00 a.m. Mountain Daylight Time12:00 p.m.
Eastern Daylight Time5:00 p.m. British Summer Time
- U.S. and Canada: 1-800-230-1085
- International: +1 612 332-0107
- Conference ID: 454839
The webcasts will be available at
www.barrick.com/a-new-champion.
This summary should be read in
conjunction with, and is subject to, the full text of the following
announcement (including its Appendices). The Merger will be subject
to the Conditions and certain further terms set out in Appendix 1
and to the full terms and conditions to be set out in the Scheme
Document. Appendix 2 contains the sources and bases of certain
information contained in this summary and the following
announcement. Appendix 3 contains details of the irrevocable
undertakings received by, and voting agreements entered into by,
Barrick. Appendix 4 contains the definitions of certain terms used
in this summary and the following announcement. Appendix 5 contains
a reconciliation of certain non-GAAP financial performance measures
used in this announcement.
INVESTOR CONTACTDeni
NicoskiSenior Vice PresidentInvestor RelationsTelephone:
+1 416 307-7474Email: dnicoski@barrick.com
MEDIA CONTACTAndy
Lloyd Senior Vice PresidentCommunicationsTelephone: +1 416
307-7414Email: alloyd@barrick.com
Forward-Looking Statements
This announcement (including information
incorporated by reference in this announcement), oral statements
made regarding the Merger, and other information published by
Barrick and Randgold contain statements which are, or may be deemed
to be, “forward-looking statements” (or “forward-looking
information”), under applicable securities laws including for the
purposes of the US Private Securities Litigation Reform Act of
1995. Forward-looking statements are prospective in nature and are
not based on historical facts, but rather on current expectations
and projections of the management of Barrick and Randgold about
future events, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the
future results expressed or implied by the forward-looking
statements. The forward-looking statements contained in this
announcement include statements relating to the expected effects of
the Merger on Barrick and Randgold, the expected timing and scope
of the Merger and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words such as “plans”, “expects” or
“does not expect”, “is expected”, “is subject to”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or
“does not anticipate”, or “believes”, or variations of such words
and phrases or statements that certain actions, events or results
“may”, “could”, “should”, “would”, “might” or “will” be taken,
occur or be achieved. Although Barrick and Randgold believe that
the expectations reflected in such forward-looking statements are
reasonable, Barrick and Randgold can give no assurance that such
expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These
factors include: risks relating to the Barrick Group’s and the
Randgold Group’s credit rating; local and global political and
economic conditions; the Barrick Group’s and the Randgold Group’s
economic model and liquidity risks; fluctuations in the spot and
forward price of gold, copper, or certain other commodities (such
as silver, diesel fuel, natural gas, and electricity); financial
services risk; the risks associated with Barrick’s and Randgold’s
brand, reputation and trust; environmental risks; safety and
technology risks; the ability to realise the anticipated benefits
of the Merger or implementing the business plan for the New Barrick
Group, including as a result of a delay in completing the Merger or
difficulty in integrating the businesses of the companies involved
(including the retention of key employees); changes in or
enforcement of national and local government legislation, taxation,
controls or regulations and/or changes in the administration of
laws, policies and practices, expropriation or nationalization of
property and political or economic developments in Canada, the
United States, the Democratic Republic of Congo, Mali and other
jurisdictions in which the Barrick Group and Randgold Group carry
on business or in which the New Barrick Group may carry on business
in the future; lack of certainty with respect to foreign legal
systems, corruption and other factors that are inconsistent with
the rule of law; legal or regulatory developments and changes; the
outcome of any litigation, arbitration or other dispute proceeding;
the impact of any acquisitions or similar transactions; competition
and market risks; the impact of foreign exchange rates; pricing
pressures; the possibility that future exploration results will not
be consistent with expectations; risks that exploration data may be
incomplete and considerable additional work may be required to
complete further evaluation, including but not limited to drilling,
engineering and socioeconomic studies and investment; risk of loss
due to acts of war, terrorism, sabotage and civil disturbances;
contests over title to properties, particularly title to
undeveloped properties, or over access to water, power and other
required infrastructure; and business continuity and crisis
management. Other unknown or unpredictable factors could cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Neither
Barrick nor Randgold, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
will actually occur. You are cautioned not to place undue
reliance on these forward-looking statements. Other than in
accordance with their legal or regulatory obligations (including
under the Listing Rules and the Disclosure and Transparency Rules
of the FCA), neither Barrick nor Randgold is under any obligation,
and Barrick and Randgold expressly disclaim any intention or
obligation, to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
No profit forecasts or quantified
financial benefit statement.
No statement in this announcement is intended as
a profit forecast, profit estimate or quantified financial benefits
statement.
Non-GAAP Financial Performance
Measures
Certain financial performance measures used in
this announcement—namely Adjusted EBITDA margin and total cash
costs—are not prescribed by IFRS. These non-GAAP financial
performance measures are included because management has used the
information to analyze the combined business performance and
financial position of the New Barrick Group. These non-GAAP
financial measures are intended to provide additional information
only and do not have any standardized meaning under IFRS and may
not be comparable to similar measures presented by other companies.
These non-GAAP financial measures should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
In order to provide the combined business
performance and financial position of the New Barrick Group,
certain non-GAAP financial performance measures of each of Barrick
and Randgold have been combined.
In order to provide a relative comparison of the
New Barrick Group to its Senior Gold Peers, certain financial
comparisons between the New Barrick Group and its Senior Gold Peers
are made on the basis of data presented by either Factset or Wood
Mackenzie which contain non-GAAP financial performance measures.
These non-GAAP financial performance measure comparisons are based
solely on the data presented by Factset or Wood Mackenzie (as
applicable) and are intended to provide additional information only
and do not have any standardized meaning under IFRS. See “Third
Party Data” below for further information.
Third Party Data
Certain comparisons of the New Barrick Group to
its Senior Gold Peers (such as Adjusted EBITDA margin and total
cash costs) are based on data obtained from Wood Mackenzie and
Factset as of 31 August 2018 (unless otherwise stated). Wood
Mackenzie is an independent third party research and consultancy
firm that provides data for, among others, the metals and mining
industry. Factset is a financial data and software company which
provides financial information and analytic software for, among
others, investment professionals. Neither Wood Mackenzie nor
Factset has any affiliation to Barrick or Randgold.
Where figures for the New Barrick Group are
compared to its Senior Gold Peers, the data from either Wood
Mackenzie or Factset (as applicable) has been used to ensure
consistency in the compared measures across the New Barrick Group
and the comparator group. Neither Barrick nor Randgold has the
ability to verify the Wood Mackenzie or Factset figures and the
non-GAAP financial performance measures used by Wood Mackenzie and
Factset may not correspond to the non-GAAP financial performance
measures calculated by Barrick, Randgold or any of the other Senior
Gold Peers.
Endnotes
- A “Tier One Gold Asset” is a mine with a stated mine life in
excess of ten years with 2017 production of at least five hundred
thousand ounces of gold, 2017 total cash cost per ounce in the
bottom half of all gold mines contained in Wood Mackenzie’s Metals
Cost Curves Tool (<$748/oz total cash cost).
- “Highest Adjusted EBITDA margin” is based on data from Factset
as of 31 August 2018. “Adjusted EBITDA margin” is a non-GAAP
financial performance measures with no standardized meaning under
IFRS and therefore may not be comparable to similar measures
presented by other issuers. Financial comparisons between the
New Barrick Group and its Senior Gold Peers are made on the basis
of the data presented by Factset which may not be calculated in the
same manner as Barrick and Randgold calculate comparable measures.
Barrick and Randgold use “Adjusted EBITDA margin” because they
believe that this non-GAAP financial performance measure is an
important indicator of recurring operations, as it excludes items
that may not be indicative of, or are unrelated to, their core
operating results, and provides a measure of profitability.
- “Lowest total cash cost” is based on data from Wood Mackenzie
as of 31 August 2018. “Total cash cost” is a non-GAAP financial
performance measure with no standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. Financial comparisons between the New Barrick Group
and its Senior Gold Peers are made on the basis of the data
presented by Wood Mackenzie which may not be calculated in the same
manner as Barrick and Randgold calculate comparable measures.
Barrick and Randgold believe that total cash cost is a useful
indicator for investors and management of a mining company’s
performance as it provides an indication of a company’s
profitability and efficiency, the trends in cash costs as the
company’s operations mature, and a benchmark of performance to
allow for comparison against other companies.
- “Senior Gold Peers” means Agnico Eagle Mines Limited, Goldcorp
Inc., Newcrest Mining Limited, and Newmont Mining Corporation.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Not for release, publication or distribution, in
whole or in part, in or into any jurisdiction where to do so would
constitute a violation of the relevant laws of such
jurisdiction
For immediate release
24 September 2018
RECOMMENDED ALL-SHARE MERGER of BARRICK
GOLD CORPORATION and RANDGOLD RESOURCES LIMITED
Summary
The Boards of Barrick Gold Corporation
(“Barrick”) and Randgold Resources Limited (“Randgold”) are pleased
to announce that they have reached agreement on the terms of a
recommended share-for-share merger of Barrick and Randgold (the
“Merger”) to create an industry-leading gold company. It is
intended that the Merger will be implemented by means of a
court-sanctioned scheme of arrangement of Randgold and the Randgold
Shareholders under Article 125 of the Companies (Jersey) Law 1991,
with the entire issued and to be issued share capital of Randgold
being acquired by Barrick.
Under the terms of the Merger, each Randgold
Shareholder will receive:
6.1280 New Barrick Shares for each
Randgold Share
This exchange ratio (the “Exchange Ratio”) has
been agreed based on the volume-weighted average prices of Barrick
Shares traded on NYSE, and Randgold ADSs traded on NASDAQ,
respectively, over the 20 trading days ended on 21 September 2018
(being the last business day before this announcement).
Following completion of the Merger, Barrick
Shareholders will own approximately 66.6 per cent. and Randgold
Shareholders will own approximately 33.4 per cent. of the New
Barrick Group on a fully-diluted basis.
Under the terms of the Merger, Barrick and
Randgold have agreed that:
- Randgold Shareholders will be entitled to receive a Randgold
dividend for the 2018 financial year of USD 2.00 per Randgold
Share, subject to approval of the Board of Randgold (the “Randgold
Permitted Dividend”). The Randgold Permitted Dividend is expected
to be declared on or before the Effective Date, payable to Randgold
Shareholders on or around the Effective Date by reference to the
Scheme Record Time; and
- subject to the discretion of the Barrick Board with respect to
the declaration of dividends, Barrick Shareholders will receive a
total 2018 annualized dividend of up to USD 0.14 per Barrick Share.
A Barrick quarterly dividend of: (i) up to USD 0.03 per
Barrick Share will be paid for the three month period ending 30
September 2018; and (ii) up to USD 0.05 per Barrick Share (with a
record date prior to the Effective Date) will be paid for the three
month period ending 31 December 2018, in each case if, as and when
declared by the Board of Barrick (together, the “Barrick Permitted
Dividends”).
Following completion of the Merger, Randgold
Shareholders will be entitled to receive and retain any Barrick
dividends with a record date after the Effective Date. The New
Barrick Group intends to grow its dividend from the Barrick level
for the financial year ended 31 December 2018 over time,
underpinned by stronger cash flow generation, additional overhead
cost savings, asset sale proceeds and lower interest costs.
Further details of the arrangements in respect
of dividends are set out in section 3 (Dividends) below.
Strategic Rationale for the
Merger
The Boards of Barrick and Randgold believe that
the Merger will create an industry-leading gold company with the
greatest concentration of Tier One Gold Assets in the industry, the
lowest total cash cost position among Senior Gold Peers,1 and a
diversified asset portfolio positioned for growth in many of the
world’s most prolific gold districts.
Based on Barrick and Randgold’s Closing Prices
as of 21 September 2018 (being the last business day prior to the
date of this announcement), the New Barrick Group will have an
aggregate market capitalization of USD 18.3 billion. In addition,
based on the 2017 financial results for both companies, the New
Barrick Group would have generated aggregate revenue of
approximately USD 9.7 billion and aggregate Adjusted EBITDA2 of
approximately USD 4.7 billion.
The New Barrick Group will, on completion of the
Merger, have the following advantages:
- Ownership of five of the world’s top ten Tier One Gold Assets
by total cash cost,1 with two potential Tier One Gold Assets under
development or expansion:
- Tier One Gold Assets: Cortez, Goldstrike, Kibali (45%),
Loulo-Gounkoto (80%) and Pueblo Viejo (60%);
- Potential to become Tier One Gold Assets: Goldrush/Fourmile and
Turquoise Ridge (75%).
- The highest Adjusted EBITDA3 and highest Adjusted EBITDA
margin3 and the lowest total cash cost position among Senior Gold
Peers1 on a combined basis based on the 2017 financial results of
both companies.
- A proven management team of owners with the ability to operate
successfully in complex jurisdictions.
- Strong cash flow generation to support robust investment and
ability to return cash to shareholders.
- Established partnerships with leading Chinese mining
companies.
- Superior scale and the largest gold reserves amongst Senior
Gold Peers.
- Strong balance sheet with expected investment grade
ratings.
- Ownership of a strategic Copper Business that produced 413
million pounds of copper in 2017.
- Significant re-rating potential.
Following completion of the Merger, the
management team will be tasked with implementing a business plan
that will focus on the following:
Asset Quality
- Grow and invest in a portfolio of Tier One Gold Assets and
Strategic Assets with an emphasis on organic growth.
- Sell Non-Core Assets over time in a disciplined manner.
- Invest in exploration across extensive land positions in many
of the world’s most prolific gold districts.
- Maximize the long-term value of a strategic Copper
Business.
Operational Excellence
- Fully implement a decentralized management ethos with a strong
ownership culture.
- Streamline management and operations, and eliminate
non-essential costs.
- Leverage innovation and technology to accelerate operational
improvement.
- Build trust-based partnerships with host governments and local
communities to drive shared long-term value.
- Strive for zero harm workplaces.
Sustainable Profitability
- Disciplined approach to growth, emphasizing a partnership
strategy.
- Increased returns to shareholders driven by focus on return on
capital, IRR and free cash flow per share growth.
Governance, trading and branding of the
New Barrick Group
The Merger is expected to close by Q1 2019.
Following completion of the Merger:
- John L. Thornton, Executive Chairman of Barrick, will become
Executive Chairman of the New Barrick Group.
- Mark Bristow, Chief Executive Officer of Randgold, will become
President and Chief Executive Officer of the New Barrick
Group.
- Graham Shuttleworth, Finance Director and Chief Financial
Officer of Randgold, will become Senior Executive Vice President
and Chief Financial Officer of the New Barrick Group.
- Kevin Thomson, Senior Executive Vice President, Strategic
Matters of Barrick, will become Senior Executive Vice President,
Strategic Matters of the New Barrick Group.
- Two-thirds of the directors of the Board of the New Barrick
Group will be initially appointed by Barrick and one-third will be
initially appointed by Randgold.
- Shares in the New Barrick Group issued to Randgold Shareholders
will be admitted to trade on the New York Stock Exchange and the
Toronto Stock Exchange, subject to the approval or acceptance of
each exchange. The listing of Randgold Shares on the Official
List, the trading in Randgold Shares on the main market of the
London Stock Exchange and the trading in Randgold ADSs on NASDAQ
will be cancelled.
- The New Barrick Group will operate under the branding of the
Barrick Group.
Randgold Recommendation and Irrevocable
Undertakings
The Board of Randgold, which has been so advised
by CIBC and Barclays as to the financial terms of the Merger,
considers the terms of the Merger to be fair and reasonable. In
providing its advice, each of CIBC and Barclays has taken into
account the commercial assessments of the directors of Randgold.
Accordingly, the Board of Randgold intends to recommend to Randgold
Shareholders to vote in favour of the Scheme at the Jersey Court
Meeting and the resolutions to be proposed at the Extraordinary
General Meeting as those directors of Randgold who hold Randgold
Shares have irrevocably undertaken to do in respect of their own
Randgold Shares (representing approximately 1.06 per cent. of the
issued ordinary share capital of Randgold).
Barrick Recommendation, Voting and
Support Agreements and Break Payment
The issuance of New Barrick Shares under the
Merger requires the Barrick Shareholder Resolution to be approved
by a simple majority of the votes cast by Barrick Shareholders
represented in person or by proxy at the Barrick Special
Meeting.
The Board of Barrick, which has been advised by
M. Klein and Co. and Morgan Stanley as to the financial terms of
the Merger, considers the Exchange Ratio to be fair and reasonable.
The Board of Barrick intends to recommend to Barrick Shareholders
to vote in favour of the Barrick Shareholder Resolution at the
Barrick Special Meeting. The directors of Barrick have agreed to
vote their own Barrick Shares (representing approximately 0.238 per
cent. of the Barrick Shares currently in issue) in favour of the
Barrick Shareholder Resolution and the Continuance. In providing
its advice, each of M. Klein and Co. and Morgan Stanley has taken
into account the commercial assessments of the directors of
Barrick.
Barrick has agreed to pay to Randgold a break
fee payment in the amount of USD 300 million in certain
circumstances, as agreed in the Cooperation Agreement and described
further in paragraph 14 below.
General
It is intended that the Merger will be
implemented by means of a court-sanctioned scheme of arrangement of
Randgold and the Randgold Shareholders under Article 125 of the
Companies (Jersey) Law 1991. However, Barrick reserves the right,
with the consent of the Panel and subject to the terms of the
Cooperation Agreement, to implement the Merger by way of a takeover
offer (as defined in Article 116 of the Companies (Jersey) Law
1991), in accordance with the terms of the Cooperation
Agreement.
The Merger will be conditional on, among other
things: (i) the requisite approvals of the Randgold
Shareholders for the Scheme and the Merger; (ii) the requisite
approval of the Barrick Shareholders for the Barrick Shareholder
Resolution at the Barrick Special Meeting; (iii) relevant
regulatory clearances being received and other conditions
satisfied; and (iv) the Jersey Court sanctioning the Scheme
and the Merger becoming effective, no later than the Longstop
Date.
It is expected that the Scheme Document,
containing further information about the Merger and notices of the
Jersey Court Meeting and Extraordinary General Meeting, together
with the Forms of Proxy, will be mailed to Randgold Shareholders
and (for information only) participants in the Randgold Share Plans
as soon as practicable.
It is expected that the Barrick Information
Circular, containing further information about the Merger and
notice of the Barrick Special Meeting, will be mailed to Barrick
Shareholders at or around the same time as the Scheme
Document. It is also expected that the Barrick Special
Meeting will be held on the same day as the Randgold Meetings,
which will be on or around 5 November 2018. The Scheme is expected
to be effective by Q1 2019, subject to the satisfaction or waiver
of all relevant conditions.
Comments
Commenting on today’s announcement, John L.
Thornton, Executive Chairman of Barrick, said:
“The combination of Barrick and Randgold will
create a new champion for value creation in the gold mining
industry, bringing together the world’s largest collection of Tier
One Gold Assets, with a proven management team that has
consistently delivered among the best shareholder returns in the
gold sector over the past decade. Our overriding measure of success
will be the returns we generate and not the number of ounces we
produce, balancing boldness and prudence to deliver consistent and
growing returns to our fellow owners, a truly simple but radical
and achievable concept. There are no premiums in the merger because
we strongly believe in the opportunity to add significant value for
our shareholders from the disciplined management of our combined
asset base and a focus on truly profitable growth.”
Commenting on today’s announcement, Mark
Bristow, Chief Executive Officer of Randgold, said:
“Our industry has been criticised for its
short-term focus, undisciplined growth and poor returns on invested
capital. The merged company will be very different. Its goal will
be to deliver sector leading returns, and in order to achieve this,
we will need to take a very critical view of our asset base and how
we run our business, and be prepared to make tough decisions. By
employing a strategy similar to the one that proved very successful
at Randgold, but on a larger scale, the New Barrick Group will
leverage some of the world's best mines and talent to create real
value for all stakeholders.”
This summary should be read in
conjunction with, and is subject to, the full text of the following
announcement (including its Appendices). The Merger will be subject
to the Conditions and certain further terms set out in
Appendix 1 and to the full terms and
conditions to be set out in the Scheme Document.
Appendix 2 contains the sources and bases
of certain information contained in this summary and the following
announcement. Appendix 3 contains
details of the irrevocable undertakings received by Barrick and
voting and support agreements entered into by the directors of
Barrick with Randgold. Appendix 4
contains the definitions of certain terms used in this
summary and the following announcement. Appendix 5 contains a
reconciliation of certain non-GAAP financial performance measures
used in this announcement to the most directly comparable measure
under IFRS.
Joint Analyst and Investor Webcast and
Conference Call
Two analyst and investor conference calls to
discuss the Merger will be held on Monday 24 September 2018.
The first will start at 1.00 a.m. (Mountain Daylight Time) /
3.00 a.m. (Eastern Standard Time) / 8.00 a.m. (British
Summer Time). The second will start at 10.00 a.m.
(Mountain Daylight Time) / 12.00 p.m. (Eastern Standard Time)
/ 5.00 p.m. (British Summer Time).
To participate in the conference calls, use the
following dial-in numbers and conference IDs, or join the webcasts
using the links below:
1.00 a.m. MDT / 3.00 a.m. EST / 8.00
a.m. BST
U.S. and Canada: +1 (888) 240 9284 International: +1 (323)
794 2084Conference ID: 454952 Webcast URL:
https://webcast.merchantcantoscdn.com/webcaster/dyn/4000/7464/16531/107449/Lobby/default.htm
10.00 a.m. MDT / 12.00 p.m.
EST / 5.00 p.m. BST
U.S. and Canada: +1 (800) 230
1085International: +1 (612) 332 0107Conference ID: 454839 Webcast
URL: https://streams.merchantcantos.com/BarrickRandgold
Enquiries
Barrick |
|
|
Deni Nicoski Senior Vice
President Investor Relations Telephone: +1 416 307-7474 Email:
dnicoski@barrick.com |
Andy Lloyd Senior
Vice President Communications Telephone: +1 416 307-7414 Email:
alloyd@barrick.com |
Carole Cable
PartnerBrunswick Group LLPTel +44 (0)20 7404
5959 Direct +44 (0)20 7396 7458Mob +44 (0)7974 982
458ccable@brunswickgroup.com |
M.
Klein and Co. (financial adviser to
Barrick) |
David Friedman |
+1-212-380-7500 |
|
Peter Seibold |
|
|
Cyrus Hiramanek |
|
|
Morgan
Stanley (financial adviser to Barrick) |
Colm Donlon |
+44 207 425 8000 |
|
Richard Tory |
+1 416 943 8400 |
|
Jan Lennertz |
+1 212 761 4000 |
|
Randgold |
|
|
Chief
Executive Mark Bristow |
Finance Director and Chief
Financial Officer Graham Shuttleworth |
Investor & Media
Relations Kathy du Plessis+44 20 7557 7738randgold@dpapr.com |
CIBC
(financial adviser to Randgold) |
Neil Johnson |
+44 20 7234 6000 |
|
Oliver Ward |
|
|
Barclays (financial adviser and corporate broker to
Randgold) |
|
Paul Knight |
+1 (416) 863 8900 |
|
Nishant Amin |
+44 (0) 20 7623 2323 |
|
|
|
|
Davies Ward Phillips & Vineberg LLP,
Freshfields Bruckhaus Deringer LLP, Cravath, Swaine & Moore LLP
and Carey Olsen are retained as legal advisers for Barrick.
Norton Rose Fulbright LLP, Norton Rose Fulbright
US LLP, Stikeman Elliott LLP and Ogier are retained as legal
advisers for Randgold.
Further information
This announcement is for information purposes
only and is not intended to and does not constitute, or form part
of, an offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Merger or otherwise,
nor shall there be any sale, issuance or transfer of securities of
Randgold in any jurisdiction in contravention of applicable law.
Subject to the right of Barrick to implement the Merger by way of a
Takeover Offer in accordance with the terms of the Cooperation
Agreement, the Merger will be implemented solely by means of the
Scheme Document, which will contain the full terms and conditions
of the Merger including details of how to vote in respect of the
Merger. Barrick will prepare the Barrick Information Circular to be
distributed to Barrick Shareholders, containing details of the
Merger, notice of the Barrick Special Meeting and information on
the New Barrick Shares. Barrick and Randgold urge Randgold
Shareholders to read the Scheme Document carefully when it becomes
available, because it will contain important information in
relation to the Merger and the New Barrick Shares. Barrick also
urges Barrick Shareholders to read the Barrick Information Circular
carefully when it becomes available because it will contain
important information in relation to the Merger and the New Barrick
Shares.
Any vote in respect of resolutions to be
proposed at the Randgold Meetings to approve the Merger, the Scheme
or related matters, or other responses in relation to the Merger,
should be made only on the basis of the information contained in
the Scheme Document. Similarly, any vote in respect of resolutions
to be proposed at the Barrick Special Meeting to approve the
issuance of New Barrick Shares under the Merger should be made only
on the basis of the information contained in the Barrick
Information Circular.
Please be aware that addresses, electronic
addresses and certain other information provided by Randgold
Shareholders, persons with information rights and other relevant
persons for the receipt of communications from Randgold may be
provided to Barrick during the offer period as required under
Section 4 of Appendix 4 of the Code to comply with Rule
2.11(c).
M. Klein and Co., which is authorized by the
U.S. Securities & Exchange Commission and regulated in the
United States by the Financial Industry Regulatory Authority
(“FINRA”) and the U.S. Securities & Exchange Commission, is
acting exclusively for Barrick and no one else in connection with
the Merger and will not be responsible to anyone other than Barrick
for providing the protections afforded to clients of M. Klein and
Co. or for providing advice in relation to the Merger or any other
matter referred to in this announcement. Neither M. Klein and Co.
nor any of its subsidiaries, branches or affiliates owes or accepts
any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of M. Klein and Co. in connection
with any matter referred to in this announcement or otherwise.
Morgan Stanley, which is authorised by the
Prudential Regulation Authority (“PRA”) and regulated by the FCA
and the PRA in the United Kingdom, is acting exclusively as
financial adviser to Barrick and no one else in connection with the
Merger, this announcement and the matters described herein, and
shall not be responsible to anyone other than Barrick for providing
the protections afforded to clients of Morgan Stanley or for
providing advice in connection with the Merger, this announcement
or any matter referred to herein. Neither Morgan Stanley nor any of
its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Morgan Stanley in connection with the
Merger, this announcement or any matter referred to herein.
CIBC, which is supervised and regulated by the
Office of the Superintendent of Financial Institutions in Canada
and, in the UK, authorised by the PRA, subject to regulation by the
FCA and limited regulation by the PRA, is acting exclusively as
financial adviser to Randgold and for no one else in connection
with the Merger and will not be responsible to anyone other than
Randgold for providing the protections afforded to clients of CIBC
or for providing advice in relation to the Merger, the content of
this announcement or any matter or other document referred to
herein. Neither CIBC nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of CIBC in connection with this announcement, any statement
contained herein, the Merger or otherwise.
Barclays, which is authorised by the PRA and
regulated in the United Kingdom by the FCA and the PRA, is acting
exclusively for Randgold and no one else in connection with the
Merger and will not be responsible to anyone other than Randgold
for providing the protections afforded to clients of Barclays or
for providing advice in relation to the Merger or any other matter
referred to in this announcement. Neither Barclays nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Barclays in connection with any
matter referred to in this announcement or otherwise.
Technical information
The technical and scientific information
contained in this announcement in respect of Randgold has been
reviewed and approved for release by Simon Bottoms, Group Mineral
Resource Manager for Randgold and Rodney Quick Group General
Manager Evaluations for Randgold who are Randgold’s Qualified
Persons as defined by National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
The technical and scientific information
contained in this announcement in respect of Barrick has been
reviewed and approved for release by Rick Sims, Registered Member
SME, Vice President, Resources and Reserves of Barrick, and a
Qualified Person as defined by National Instrument 43-101 –
Standards of Disclosure for Mineral Projects.
Overseas jurisdictions
The release, publication or distribution of this
announcement in or into jurisdictions other than Canada, the United
States, the United Kingdom and Jersey may be restricted by law and
therefore any persons who are subject to the law of any
jurisdiction other than Canada, the United States, the United
Kingdom and Jersey should inform themselves about, and observe, any
applicable legal or regulatory requirements. In particular the
ability of persons who are not citizens of and resident in Canada,
the United States, the United Kingdom or Jersey, to vote their
Randgold Shares with respect to the Scheme at the Jersey Court
Meeting, or to appoint another person as proxy to vote at the
Jersey Court Meeting on their behalf, may be affected by the laws
of the relevant jurisdictions in which they are located or of which
they are citizens. Any failure to comply with the applicable
restrictions may constitute a violation of the securities laws of
any such jurisdiction. Relevant clearances have not been, and will
not be, obtained from the securities commission or similar
regulatory authority of any province or territory of Canada. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Merger disclaim any responsibility or
liability for the violation of such restrictions by any person.
This announcement has been prepared for the purposes of complying
with applicable English law, Jersey law, certain applicable
securities laws in Canada and the United States, the Listing Rules,
the rules of the London Stock Exchange and the Code and the
information disclosed may not be the same as that which would have
been disclosed if this announcement had been prepared in accordance
with the laws of jurisdictions outside of the UK and Jersey.
Copies of this announcement and formal
documentation relating to the Merger will not be and must not be,
mailed or otherwise forwarded, distributed or sent in, into or from
any Restricted Jurisdiction or any jurisdiction where to do so
would violate the laws of that jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. Doing so may render invalid
any related purported vote in respect of the Merger. If the Merger
is implemented by way of Takeover Offer (unless otherwise permitted
by applicable law or regulation), the Takeover Offer may not be
made, directly or indirectly, in or into or by use of the mails or
any other means or instrumentality (including, without limitation,
facsimile, email or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or any facility of
a national, state or other securities exchange of any Restricted
Jurisdiction and the Takeover Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or
from within any Restricted Jurisdiction.
Further details in relation to Overseas
Shareholders will be contained in the Scheme Document and Randgold
Shareholders are advised to read carefully the Scheme Document and
related Forms of Proxy once these have been mailed.
Additional information for US
investors
The Merger is being made to acquire the
securities of a Jersey company by means of a scheme of arrangement
provided for under Jersey law. Any securities issued as a result of
this Merger by means of a scheme of arrangement will be issued in
reliance upon the exemption from the registration requirements of
the US Securities Act of 1933, pursuant to the exemption from
registration set forth in Section 3(a)(10) thereof, and also will
not be subject to the tender offer rules promulgated under the US
Securities Exchange Act of 1934. Accordingly, the Scheme will be
subject to disclosure requirements and practices applicable in the
UK and Jersey to schemes of arrangement, which are different from
the disclosure requirements of the US tender offer rules. Except in
relation to non-GAAP financial performance measures, the financial
information included in this announcement and the Scheme
documentation has been or will have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) and thus
may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US. If Barrick
exercises its right to implement the acquisition of the Randgold
Shares in accordance with the Cooperation Agreement by way of a
Takeover Offer, such offer will be made in compliance with
applicable US laws and regulations, including the registration
requirements of the US Securities Act of 1933 and the tender offer
rules under the US Securities Exchange Act of 1934 and any
applicable exemptions provided thereunder.
Barrick’s mineral reserves and mineral resources
have been estimated in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects, as required by
Canadian securities regulatory authorities. Randgold’s mineral
resource and ore reserve estimates have been prepared according to
the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves standards and guidelines published and
maintained by the Joint Ore Reserves Committee of the Australasian
Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia (the “JORC (2012)
Code”). Randgold has reconciled the mineral resources and ore
reserves to the definition standards incorporated in National
Instrument 43-101 and there are no material differences. For United
States reporting purposes, Industry Guide 7 (under the US
Securities Exchange Act of 1934), as interpreted by the Staff of
the SEC, applies different standards in order to classify
mineralization as a reserve. In addition, while the terms
“measured,” “indicated” and “inferred” mineral resources are
required pursuant to National Instrument 43-101 – Standards of
Disclosure for Mineral Projects, the SEC does not recognize such
terms. Canadian and JORC (2012) Code standards differ significantly
from the requirements of the SEC, and mineral resource information
contained herein and in the documents incorporated herein by
reference is not comparable to similar information regarding
mineral reserves disclosed in accordance with the requirements of
the SEC. Investors should understand that “inferred” mineral
resources have a great amount of uncertainty as to their existence
and as to their economic and legal feasibility. In addition,
investors are cautioned not to assume that any part or all of any
mineral resources constitute or will be converted into reserves.
Accordingly, information contained in this announcement and in the
documents incorporated by reference herein containing descriptions
of Barrick’s and Randgold’s mineral deposits may not be comparable
to similar information made public by United States companies
subject to the reporting requirements of United States federal
securities laws and the rules and regulations thereunder.
US Holders and US Randgold ADS Holders also
should be aware that the transaction contemplated herein may have
tax consequences in the United States and, that such consequences,
if any, are not described herein. US Holders and US Randgold ADS
Holders are urged to consult with independent professional advisors
regarding the legal, tax and financial consequences of the Merger
applicable to them.
It may be difficult for US Holders and US
Randgold ADS Holders to enforce their rights and claims arising out
of the US federal securities laws, since Barrick and Randgold are
located in countries other than the US, and some or all of their
officers and directors may be residents of countries other than the
US. US Holders and US Randgold ADS Holders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to
compel a non-US company and its affiliates to subject themselves to
a US court’s judgment.
In accordance with normal UK practice, Barrick
or its nominees, or its brokers (acting as agents), may from time
to time make certain purchases of, or arrangements to purchase,
Randgold Shares outside of the US, other than pursuant to the
Merger, until the date on which the Merger and/or Scheme becomes
effective, lapses or is otherwise withdrawn. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the UK, will be reported
to a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com.
Additional information for Canadian
investors
The enforcement by Canadian Holders or Canadian
Randgold ADS Holders of civil liabilities under the Canadian
securities laws may be affected adversely by the fact that Randgold
is incorporated or organized under the laws of a jurisdiction other
than Canada, that some or all of Barrick’s and Randgold’s officers
and directors are and will be residents of countries other than
Canada, that some or all of the experts named in this announcement
may be residents of countries other than Canada, and that all or a
substantial portion of the assets of Barrick, Randgold and such
persons are and will be located outside Canada. As a result, it may
be difficult or impossible for Canadian Holders or Canadian
Randgold ADS Holders to effect service of process within Canada
upon Randgold, Barrick’s and Randgold’s respective officers or
directors or the experts named herein, or to realize against them,
upon judgments of courts of Canada predicated upon liabilities
under Canadian securities laws. In addition, Canadian Holders or
Canadian Randgold ADS Holders should not assume that the courts of
Jersey: (a) would enforce judgments of Canadian courts
obtained in actions against such persons predicated upon civil
liabilities under Canadian securities laws; or (b) would
enforce, in original actions, liabilities against such persons
predicated upon civil liabilities under the Canadian securities
laws.
The distribution of the New Barrick Shares
pursuant to the Merger will constitute a distribution of securities
that is exempt from the prospectus requirements of Canadian
securities law and is exempt from or otherwise is not subject to
the registration requirements under applicable securities law. The
New Barrick Shares received pursuant to the Merger will not be
legended and may be resold through registered dealers in each of
the provinces and territories of Canada provided that (i) the
trade is not a “control distribution” as defined in Canadian
securities law, (ii) no unusual effort is made to prepare the
market or to create a demand for Barrick Shares, (iii) no
extraordinary commission or consideration is paid to a person in
respect of such sale, and (iv) if the selling security holder
is an insider or officer of Barrick, as the case may be, the
selling security holder has no reasonable grounds to believe that
Barrick, as the case may be, is in default of applicable Canadian
securities law.
Canadian Holders and Canadian Randgold ADS
Holders should be aware that the Merger described in this
announcement may have tax consequences in Canada and should consult
their own tax advisors to determine the particular tax consequences
to them of the Merger in light of their particular circumstances,
as well as any tax consequences that may arise under the laws of
any other relevant foreign, state, local or other taxing
jurisdiction.
Additional
information for Australian
investors
The New Barrick Shares may not be publicly
offered, sold or advertised, directly or indirectly, in or from
Australia. Neither this announcement nor any other offering or
marketing material relating to the New Barrick Shares constitutes a
disclosure document or product disclosure statement under Part 6D.2
or Chapter 7 of the Australian Corporations Act and this
announcement has not been, and will not be lodged with the
Australian Securities and Investments Commission. This announcement
does not contain the information required to be contained in a
disclosure document or product disclosure statement for the
purposes of the Australian Corporations Act.
Neither this announcement, nor any other
offering or marketing material relating to the New Barrick Shares
or Merger, may be made available or distributed in Australia other
than to Randgold Shareholders with a registered address in
Australia and their advisors and in compliance with Australian law.
Failure to comply with this restriction may contravene applicable
Australian law.
Additional
information for Swiss
investors
The New Barrick Shares may not be publicly
offered, sold or advertised, directly or indirectly, in or from
Switzerland. Neither this announcement nor any other offering or
marketing material relating to the New Barrick Shares constitutes a
prospectus as such term is understood pursuant to article 652a or
article 1156 of the Swiss Federal Code of Obligations or a listing
prospectus within the meaning of the listing rules of the SIX Swiss
Exchange, and neither this announcement nor any other offering or
marketing material relating to the New Barrick Shares or the Merger
may be publicly distributed or otherwise made publicly available in
Switzerland.
Additional information for Singaporean
investors
Neither this announcement nor any other offering
or marketing material relating to the New Barrick Shares will be
lodged or registered as a prospectus with the Monetary Authority of
Singapore and the offering made under this announcement is pursuant
to Section 273 of the Securities and Futures Act, Chapter 289 of
Singapore. Accordingly, neither this announcement nor any other
offering or marketing material relating to the New Barrick Shares
may be issued, circulated, distributed or otherwise made publicly
available in Singapore.
Additional information for Hong Kong
investors
The contents of this announcement have not been
reviewed by any regulatory authority in Hong Kong. The public in
Hong Kong is advised to exercise caution in relation to the Merger
and if the public in Hong Kong is in any doubt about any of the
contents of this announcement, they should obtain independent
professional advice.
This announcement must not be issued, circulated
or distributed in Hong Kong other than (1) to “professional
investors” as defined in the Securities and Futures Ordinance
(“SFO”) and any rules made under the SFO, (2) to persons and in
circumstances which do not result in this announcement being a
“prospectus” as defined in section 2(1) of the Companies (Winding
Up and Miscellaneous Provisions) Ordinance (“CWMO”) or which do not
constitute an offer to the public within the meaning of the CWMO or
an invitation to the public within the meaning of the SFO or (3)
otherwise pursuant to, and in accordance with the conditions of,
any other applicable provisions of the SFO and CWMO.
Forward looking statements
This announcement (including information
incorporated by reference in this announcement), oral statements
made regarding the Merger, and other information published by
Barrick and Randgold contain statements which are, or may be deemed
to be, “forward-looking statements” (or “forward-looking
information”), under applicable securities laws including for the
purposes of the US Private Securities Litigation Reform Act of
1995. Forward-looking statements are prospective in nature and are
not based on historical facts, but rather on current expectations
and projections of the management of Barrick and Randgold about
future events, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the
future results expressed or implied by the forward-looking
statements. The forward-looking statements contained in this
announcement include statements relating to the expected effects of
the Merger on Barrick and Randgold, the expected timing and scope
of the Merger and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words such as “plans”, “expects” or
“does not expect”, “is expected”, “is subject to”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or
“does not anticipate”, or “believes”, or variations of such words
and phrases or statements that certain actions, events or results
“may”, “could”, “should”, “would”, “might” or “will” be taken,
occur or be achieved. Although Barrick and Randgold believe that
the expectations reflected in such forward-looking statements are
reasonable, Barrick and Randgold can give no assurance that such
expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These
factors include the satisfaction of the Conditions and the ability
to consummate the Merger, as well as additional factors, such as:
risks relating to the Barrick Group’s and the Randgold Group’s
credit rating; local and global political and economic conditions;
the Barrick Group’s and the Randgold Group’s economic model and
liquidity risks; fluctuations in the spot and forward price of
gold, copper, or certain other commodities (such as silver, diesel
fuel, natural gas, and electricity); financial services risk; the
risks associated with Barrick’s and Randgold’s brand, reputation
and trust; environmental risks; safety and technology risks; the
ability to realise the anticipated benefits of the Merger or
implementing the business plan for the New Barrick Group, including
as a result of a delay in completing the Merger or difficulty in
integrating the businesses of the companies involved (including the
retention of key employees); changes in or enforcement of national
and local government legislation, taxation, controls or regulations
and/or changes in the administration of laws, policies and
practices, expropriation or nationalization of property and
political or economic developments in Canada, the United States,
the Democratic Republic of Congo, Mali and other jurisdictions in
which the Barrick Group and Randgold Group carry on business or in
which the New Barrick Group may carry on business in the future;
lack of certainty with respect to foreign legal systems, corruption
and other factors that are inconsistent with the rule of law; legal
or regulatory developments and changes; the outcome of any
litigation, arbitration or other dispute proceeding; the impact of
any acquisitions or similar transactions; competition and market
risks; the impact of foreign exchange rates; pricing pressures; the
possibility that future exploration results will not be consistent
with expectations; risks that exploration data may be incomplete
and considerable additional work may be required to complete
further evaluation, including but not limited to drilling,
engineering and socioeconomic studies and investment; risk of loss
due to acts of war, terrorism, sabotage and civil disturbances;
contests over title to properties, particularly title to
undeveloped properties, or over access to water, power and other
required infrastructure; and business continuity and crisis
management. Other unknown or unpredictable factors could cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Neither
Barrick nor Randgold, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
will actually occur. You are cautioned not to place undue reliance
on these forward-looking statements. Other than in accordance with
their legal or regulatory obligations (including under the Listing
Rules and the Disclosure and Transparency Rules of the FCA),
neither Barrick nor Randgold is under any obligation, and Barrick
and Randgold expressly disclaim any intention or obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts or quantified
financial benefits statement
No statement in this announcement is intended as
a profit forecast, profit estimate or quantified financial benefits
statement.
Dealing disclosure
requirements
Under Rule 8.3(a) of the Code, any person who is
interested in 1% or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10th business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the
relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who
is, or becomes, interested in 1% or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details
of the dealing concerned and of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to
an agreement or understanding, whether formal or informal, to
acquire or control an interest in relevant securities of an offeree
company or a securities exchange offeror, they will be deemed to be
a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made
by the offeree company and by any offeror and Dealing Disclosures
must also be made by the offeree company, by any offeror and by any
persons acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in
respect of whose relevant securities Opening Position Disclosures
and Dealing Disclosures must be made can be found in the Disclosure
Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
The defined terms used in this section "Dealing
disclosure requirements" are defined in the Code which can be found
on the Takeover Panel's website.
Non-GAAP Financial Performance
Measures
Certain financial performance measures used in
this announcement – namely EBITDA, Adjusted EBITDA, Adjusted EBITDA
margin, cash costs per ounce, and total cash costs – are not
prescribed by IFRS. These non-GAAP financial performance measures
are included because management has used the information to analyze
the combined business performance and financial position of the New
Barrick Group. These non-GAAP financial measures are intended to
provide additional information only and do not have any
standardized meaning under IFRS and may not be comparable to
similar measures presented by other companies. These non-GAAP
financial measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
In order to provide the combined business
performance and financial position of the New Barrick Group,
certain non-GAAP financial performance measures of each of Barrick
and Randgold have been combined to show an aggregate number.
Where a component of the aggregated non-GAAP financial performance
measure has been previously reported by Barrick or Randgold we have
included in Appendix 5 to this announcement details regarding the
manner in which non-GAAP financial performance measures have been
aggregated for purposes of this announcement as well as
reconciliations to the most directly comparable GAAP measures as
reported by Barrick and Randgold, together with an explanation of
the rationale for including the non-GAAP measure.
In order to provide a relative comparison of the
New Barrick Group to its Senior Gold Peers, certain financial
comparisons between the New Barrick Group and its Senior Gold Peers
are made on the basis of data presented by either Factset, Wood
Mackenzie or Bloomberg which contain non-GAAP financial performance
measures. These non-GAAP financial performance measure comparisons
– namely “lowest total cash costs”, “highest Adjusted EBITDA
margin”, “highest return on capital” and “lowest gross debt to
Adjusted EBITDA ratio” are based solely on the data presented by
Factset, Wood Mackenzie or Bloomberg (as applicable) and are
intended to provide additional information only and do not have any
standardized meaning under IFRS. See “Third Party Data” below for
further information.
Third Party Data
Certain comparisons of the New Barrick Group to
its Senior Gold Peers (such as total cash cost, Adjusted EBITDA
margin, return on capital and gross debt to adjusted EBITDA ratio)
are based on data obtained from Wood Mackenzie, Factset and
Bloomberg as of 31 August 2018 (unless otherwise stated).
Wood Mackenzie is an independent third party research and
consultancy firm that provides data for, among others, the metals
and mining industry. Factset is a financial data and software
company which provides financial information and analytic software
for, among others, investment professionals. Bloomberg is a
software, data and media company which delivers business and market
news, data and analysis. Neither Wood Mackenzie, Factset nor
Bloomberg has any affiliation to Barrick or Randgold.
Where figures for the New Barrick Group are
compared to its Senior Gold Peers, the data from either Wood
Mackenzie, Factset or Bloomberg (as applicable) has been used to
ensure consistency in the compared measures across the New Barrick
Group and the comparator group. Neither Barrick nor Randgold
has the ability to verify the Wood Mackenzie, Factset or Bloomberg
figures and the non-GAAP financial performance measures used by
Wood Mackenzie, Factset and Bloomberg may not correspond to the
non-GAAP financial performance measures calculated by Barrick,
Randgold or any of the Senior Gold Peers.
Publication on Website
A copy of this announcement and the documents
required to be published by Rule 26 of the Code will be made
available (subject to certain restrictions relating to persons
resident in Restricted Jurisdictions) on Barrick’s website at
www.barrick.com and www.barrick.com/a-new-champion and Randgold’s
website at www.randgoldresources.com by no later than 12 noon
(London time) on the business day following the date of this
announcement in accordance with Rule 26.1(a) of the Code. The
content of the websites referred to in this announcement are not
incorporated into and do not form part of this announcement.
This announcement will also be available on
SEDAR under Randgold’s profile at www.sedar.com and on EDGAR under
Randgold’s profile at www.sec.gov.
In accordance with Rule 30.3 of the Code,
Barrick Shareholders and Randgold Shareholders may request a hard
copy of this announcement by contacting Computershare during
business hours at 03707074040 (from within Jersey or the UK) or +44
3707074040 (from outside Jersey or the UK) or by submitting a
request in writing to Computershare Investor Services PLC,
Corporate Actions Team, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZY. If you have received this announcement in electronic
form, copies of this announcement and any document or information
incorporated by reference into this document will not be provided
unless such a request is made.
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
Not for release, publication or distribution, in
whole or in part, in or into any jurisdiction where to do so would
constitute a violation of the relevant laws of such
jurisdiction
For immediate release
24 September 2018
RECOMMENDED ALL-SHARE MERGER of BARRICK
GOLD CORPORATION and RANDGOLD RESOURCES LIMITED
- Introduction
The Boards of Barrick and Randgold are pleased
to announce that they have reached agreement on the terms of a
recommended share-for-share Merger of Barrick and Randgold to
create an industry-leading gold company. It is intended that the
Merger will be implemented by means of a court-sanctioned scheme of
arrangement of Randgold and the Randgold Shareholders under Article
125 of the Companies (Jersey) Law 1991, with the entire issued and
to be issued share capital of Randgold being acquired by
Barrick.
- The Merger
Under the terms of the Merger, which will be
subject to satisfaction (or, where applicable, waiver) of the
Conditions and further terms set out in Appendix 1 to this
announcement and to be set out in the Scheme Document, Scheme
Shareholders at the Scheme Record Time will be entitled to
receive:
6.1280 New Barrick Shares for each
Randgold Share
This Exchange Ratio has been agreed based on the
volume-weighted average prices of Barrick Shares traded on NYSE,
and Randgold ADSs traded on NASDAQ, respectively, over the 20
trading days ended on 21 September 2018 (being the last business
day before this announcement).
Following completion of the Merger, Barrick
Shareholders will own approximately 66.6 per cent. and Randgold
Shareholders will own approximately 33.4 per cent. of the New
Barrick Group on a fully-diluted basis.
The New Barrick Shares will be issued as fully
paid and will rank equally in all respects with the existing
Barrick Shares and will be entitled to receive any dividends and/or
other distributions declared or paid by Barrick in respect of the
Barrick Shares with a record date falling after the Effective Date.
Applications will be made to the New York Stock Exchange and the
Toronto Stock Exchange for the New Barrick Shares to be listed for
trading, with listing being subject to the approval or acceptance
of each exchange.
- Dividends
Randgold Permitted Dividend and Barrick
Permitted Dividends
Under the terms of the Merger, Barrick and
Randgold have agreed that:
- Randgold Shareholders will be entitled to receive a Randgold
dividend for the 2018 financial year of USD 2.00 per Randgold
Share, subject to the approval of the Board of Randgold (the
“Randgold Permitted Dividend”). The Randgold Permitted Dividend is
expected to be declared on or before the Effective Date, payable to
Randgold Shareholders on or around the Effective Date by reference
to the Scheme Record Time; and
- subject to the discretion of the Barrick Board with respect to
the declaration of dividends, Barrick Shareholders will receive a
total 2018 annualized dividend of up to USD 0.14 per Barrick Share.
A Barrick quarterly dividend of: (i) up to USD 0.03 per
Barrick Share will be paid for the three month period ending 30
September 2018; and (ii) up to USD 0.05 per Barrick Share (with a
record date prior to the Effective Date) will be paid for the three
month period ending 31 December 2018, in each case if, as and when
declared by the Board of Barrick (together, the “Barrick Permitted
Dividends”).
Randgold Equalisation Dividend
If, after the date of this announcement, any
dividend (other than or in excess of the Barrick Permitted
Dividends), distribution or return of capital is declared, made or
paid or becomes payable in respect of the Barrick Shares with a
record date on or before the Effective Date (a “Non-Permitted
Barrick Dividend”), then Randgold will be entitled (in addition to
the Randgold Permitted Dividend) to declare and pay, and the
Randgold Shareholders will be entitled to receive and retain, prior
to the Scheme Record Time an equalisation dividend in USD (the
“Randgold Equalisation Dividend”) in respect of the Randgold Shares
of an amount per Randgold Share equal to the amount of the
Non-Permitted Barrick Dividend per Barrick Share multiplied by the
Exchange Ratio (taking into account any reduction to the Exchange
Ratio arising as a result of any Randgold Returns of Capital in
accordance with the following paragraph entitled “Reduction to
Exchange Ratio”).
Reduction to Exchange Ratio
If, after the date of this announcement, any
dividend, distribution or return of capital is declared, made or
paid or becomes payable in respect of the Randgold Shares (other
than, or in excess of, a Randgold Permitted Dividend or a Randgold
Equalisation Dividend) with a record date on or before the Scheme
Record Time (each a “Randgold Return of Capital”), Barrick reserves
the right to reduce the Exchange Ratio accordingly so as to reflect
the aggregate value attributable to any such Randgold Return of
Capital.
Dividend policy of the New Barrick Group
The New Barrick Group intends to grow its
dividend from the Barrick level for the financial year ended 31
December 2018 over time, underpinned by stronger cash flow
generation, additional overhead cost savings, asset sale proceeds
and lower interest costs. Following the completion of the Merger,
the Board of the New Barrick Group will review the dividend policy
quarterly based on the cash requirements of the New Barrick Group’s
operating assets, exploration and development activities, as well
as potential acquisitions, combined with the current and projected
financial position of the New Barrick Group.
- The New Barrick Group
Background to and reasons for the Merger
The Boards of Barrick and Randgold believe that
the Merger will create an industry-leading gold company with the
greatest concentration of Tier One Gold Assets in the industry, the
lowest total cash cost position among Senior Gold Peers,1 and a
diversified asset portfolio positioned for growth in many of the
world’s most prolific gold districts.
Based on Barrick and Randgold’s Closing Prices
as of 21 September 2018 (being the last business day prior to the
date of this announcement), the New Barrick Group would have an
aggregate market capitalization of USD 18.3 billion. In addition,
based on the 2017 financial results for both companies, the New
Barrick Group would have generated aggregate revenue of
approximately USD 9.7 billion and aggregate Adjusted EBITDA2 of
approximately USD 4.7 billion.
The New Barrick Group will, on completion of the
Merger, have the following advantages:
- Ownership of five of the world’s top ten Tier One Gold Assets
by total cash cost, with two potential Tier One Gold Assets:
- Tier One Gold Assets: Cortez, Goldstrike, Kibali (45%),
Loulo-Gounkoto (80%) and Pueblo Viejo (60%);
- potential to become Tier One Gold Assets: Goldrush/Fourmile and
Turquoise Ridge (75%);
- The highest Adjusted EBITDA3 and highest Adjusted EBITDA
margin3 and the lowest total cash cost position among Senior Gold
Peers1 on a combined basis based on the 2017 financial results of
both companies:
- combined Adjusted EBITDA margin4 of 48% (for the financial year
ended 31 December 2017);
- combined total cash costs5 of USD 538 per ounce (for the
financial year ended 31 December 2017);
- A proven management team of owners with the ability to operate
successfully in complex jurisdictions:
- Barrick has a strong partnership-ownership culture and deep
experience operating across a range of geographies, mining methods
and ore types;
- from 1 January 2008 to 31 August 2018, Randgold achieved the
highest return on capital among Senior Gold Peers.6 Randgold’s
share price has also risen by 76% over the same period, while
Senior Gold Peers’ share prices have declined by an average of
48%;
- Strong cash flow generation to support robust investment and
ability to return cash to shareholders;
- Established partnerships with leading Chinese mining
companies;
- Superior scale and the largest gold reserves amongst Senior
Gold Peers:
- potential combined 78 million ounces of proven and probable
gold reserves on an attributable basis (as at 31 December
2017);7
- Strong balance sheet with expected investment grade ratings:
- The lowest ratio of gross debt (as of 30 June 2018) to Adjusted
EBITDA (as of the financial year ended 31 December 2017) of any
Senior Gold Peer;8
- On an aggregate basis as at 30 June 2018, the New Barrick Group
had a combined cash position of USD 2.7 billion and debt net of
cash of USD 3.7 billion; and
- Barrick currently has an investment grade rating of BBB and
Baa2 from S&P and Moody’s, respectively. As at 30 June 2018
Randgold had a net cash balance of USD 604 million and strong cash
generation from its underlying operations. This would provide
additional flexibility to the New Barrick Group to service existing
debt and may positively impact Barrick’s current credit
ratings;
- Ownership of a strategic Copper Business that produced 413
million pounds of copper in 2017; and
- Significant re-rating potential:
- Given the quality of the combined asset base and the proven
management team of the New Barrick Group, with the highest Adjusted
EBITDA margin3 and the lowest total cash cost for 2017 relative to
the Senior Gold Peers1, there is significant potential for the New
Barrick Group to re-rate over time.
Following the completion of the Merger, the
management team will be tasked with implementing a business plan
that will focus on the following:
Asset Quality
- Grow and invest in a portfolio of Tier One Gold Assets and
Strategic Assets with an emphasis on organic growth:
- Near-term priorities include Goldrush/Fourmile, Turquoise Ridge
and a strategic partnership with Shandong Gold in the El Indio
belt.
- Sell Non-Core Assets over time in a disciplined manner.
- Invest in exploration across extensive land positions in many
of the world’s most prolific gold districts.
- Maximize the long-term value of a strategic Copper
Business.
Operational Excellence
- Fully implement a decentralized management ethos with a strong
ownership culture.
- Streamline management and operations, and eliminate
non-essential costs.
- Leverage innovation and technology to accelerate operational
improvement.
- Build trust-based partnerships with host governments and local
communities to drive shared long-term value.
- Strive for zero harm workplaces.
Sustainable Profitability
- Disciplined approach to growth, emphasizing a partnership
strategy.
- Increased returns to shareholders driven by focus on return on
capital, IRR and free cash flow per share growth.
Governance, trading and branding of the
New Barrick Group
Following completion of the Merger:
- John L. Thornton, Executive Chairman of Barrick, will become
Executive Chairman of the New Barrick Group.
- Mark Bristow, Chief Executive Officer of Randgold, will become
President and Chief Executive Officer of the New Barrick
Group.
- Graham Shuttleworth, Finance Director and Chief Financial
Officer of Randgold, will become Senior Executive Vice President
and Chief Financial Officer of the New Barrick Group.
- Kevin Thomson, Senior Executive Vice President, Strategic
Matters of Barrick, will become Senior Executive Vice President,
Strategic Matters of the New Barrick Group.
- Two-thirds of the directors of the Board of the New Barrick
Group will be initially appointed by Barrick and one-third will be
initially appointed by Randgold.
- Shares in the New Barrick Group issued to Randgold Shareholders
will be admitted to trade on the New York Stock Exchange and the
Toronto Stock Exchange, subject to the approval or acceptance of
each exchange. The listing of Randgold Shares on the Official List,
the trading in Randgold Shares on the main market of the London
Stock Exchange and the trading in Randgold ADSs on NASDAQ will be
cancelled.
- The New Barrick Group will operate under the branding of the
Barrick Group.
Intentions regarding the New Barrick
Group’s Assets
The new executive management team of the New
Barrick Group will be tasked with implementing a business plan to
seek to maximise the opportunities for value enhancement of the New
Barrick Group’s asset portfolio.
Following the Merger, the New Barrick Group will
focus on the Tier One Gold Assets it will own, being Cortez,
Goldstrike, Kibali, Loulo-Gounkoto and Pueblo Viejo, as well as all
other Strategic Assets. In addition, the new executive management
team will focus on enhancing the New Barrick Group’s strategic
relationships.
The Tier One Gold Assets represent the majority
of the New Barrick Group’s gold production and cash flow
generation.
The new executive management team will operate
the New Barrick Group’s assets in a manner consistent with
maximizing sustainable profitability and operational efficiency
over the life of each mine.
Within 12 months following completion of the
Merger, the new executive management team will identify those
assets whose profile is not expected to meet the New Barrick
Group’s investment criteria and which the New Barrick Group will
consider selling. These assets are referred to in this
announcement as Non-Core Assets. Following completion of the
Merger, the New Barrick Group may seek to dispose of one or more
Non-Core Assets, either to existing joint venture partners, if
applicable, or to other buyers. Any such disposals will only be
effected if terms can be negotiated which the board of the New
Barrick Group considers attractive. Such sales would allow the new
executive management team to focus on operating mines and projects
considered to deliver the most value to the New Barrick Group or
which have the highest potential.
It is the intention of the New Barrick Group to
invest in its combined portfolio of exploration and development
assets and, whilst a full evaluation would take place following
completion of the Merger, the Boards of Randgold and Barrick expect
the initial focus will include the Fourmile/Goldrush project and
the Turquoise Ridge expansion, which have the potential to develop
into Tier One Gold Assets.
The new executive management team intends to
grow the value of its existing portfolio of copper mines and
projects, through development of its existing resources, through
potential partnerships and joint ventures with third parties and,
if market opportunities arise, through acquisitions.
The Continuance to British
Columbia
In connection with the Merger and the changes to
the Board of Barrick contemplated in relation to the Merger,
Barrick believes it is appropriate at this time to continue (i.e.
to migrate its province of incorporation) to British Columbia,
which has a more modern corporate statute that provides additional
flexibility to Barrick in a number of areas, including increased
flexibility with respect to capital management and in the
composition of the Board of Barrick. In British Columbia, Barrick
will have greater flexibility to attract the most qualified and
experienced directors from a global talent pool, who have the
expertise and skills required by Barrick’s global business, that
will operate in a diverse range of jurisdictions across five
continents. The British Columbia corporate statute also provides
increased flexibility with respect to capital management, resulting
from more flexible rules relating to dividends, share purchases and
redemptions, and accounting for capital. In addition, harmonization
of the Business Corporations Act (British Columbia) with applicable
securities laws has reduced the regulatory burden as compared to
other Canadian jurisdictions.
- Recommendation
The Board of Randgold, which has been so advised
by CIBC and Barclays as to the financial terms of the Merger,
considers the terms of the Merger to be fair and reasonable. In
providing its advice, each of CIBC and Barclays has taken into
account the commercial assessments of the Board of Randgold.
Accordingly, the Board of Randgold intends to recommend to Randgold
Shareholders to vote in favour of the Scheme at the Jersey Court
Meeting and the resolutions to be proposed at the Extraordinary
General Meeting as those directors of Randgold who hold Randgold
Shares have irrevocably undertaken to do in respect of their own
Randgold Shares (representing approximately 1.06 per cent. of the
issued ordinary share capital of Randgold).
Each of CIBC and Barclays has given and not
withdrawn its consent to the inclusion in this announcement of
reference to its advice to the directors of Randgold in the form
and context in which they appear.
The issuance of New Barrick Shares under the
Merger requires the Barrick Shareholder Resolution to be approved
by a simple majority of the votes cast by Barrick Shareholders
represented in person or by proxy at the Barrick Special
Meeting.
The Board of Barrick, which has been advised by
M. Klein and Co. and Morgan Stanley as to the financial terms of
the Merger, considers the Exchange Ratio to be fair and reasonable.
The Board of Barrick intends to recommend to Barrick Shareholders
to vote in favour of the Barrick Shareholder Resolution at the
Barrick Special Meeting. The directors of Barrick have agreed to
vote their own Barrick Shares (representing approximately 0.238 per
cent. of the Barrick Shares currently in issue) in favour of the
Barrick Shareholder Resolution. In providing its advice, each of M.
Klein and Co. and Morgan Stanley has taken into account the
commercial assessments of the Board of Barrick.
Each of M. Klein and Co. and Morgan Stanley has
given and not withdrawn its consent to the inclusion in this
announcement of reference to its advice to the Board of Barrick in
the form and context in which they appear.
- Background to and reasons for the Randgold
recommendation
Randgold has built a high quality African gold
company as a result of its investment criteria and execution over a
long period. The Board of Randgold believes that an expansion of
the company’s geographical footprint would be beneficial to the
growth, evolution and long term future of the company.
Randgold has previously considered the
acquisition of a number of assets both inside and outside Africa
but had not been able to find a standalone opportunity that it
could action that met its investment criteria. Randgold has also
had a number of discussions with Barrick about potential
opportunities for strategic cooperation and collaboration in
relation to certain assets. The Board of Rangold understands that
there is an alignment of strategic vision and complementary
strengths and therefore believes that a merger with Barrick would
offer the opportunity to create significant shareholder value for
Randgold Shareholders over the longer term. The Board of Randgold
believes that investors in the gold industry would benefit from a
leading company with a focus on growing free cash flow rather than
production ounces.
The Board of Randgold believes that the
opportunity to merge with Barrick offers an attractive route to
gaining exposure to geographical diversification. Barrick owns a
number of the world’s Tier One Gold Assets which Randgold is
unlikely to be able to replicate organically or compete to purchase
if they were ever put up for sale.
Upon completion of the Merger, Randgold
Shareholders will own a material interest in an industry-leading
gold company. The Board of Randgold understands that it will be the
intention for the merged company to be managed and run with a
similar ethos to the one that shareholders have experienced as
shareholders in Randgold. Two-thirds of the directors of the Board
of the New Barrick Group will be initially appointed by Barrick and
one-third will be initially appointed by Randgold.
In light of these factors, and having been so
advised by CIBC and Barclays as to the financial terms of the
Merger, the Board of Randgold considers the terms of the Merger to
be fair and reasonable. In addition, the Board of Randgold
considers the terms of the Merger to be in the best interests of
Randgold and the Randgold Shareholders as a whole. In providing its
financial advice to the board of directors of Randgold, each of
CIBC and Barclays has taken into account the commercial assessments
of the Board of Randgold. Accordingly, the Board of Randgold
intends to recommend that Randgold Shareholders vote in favour of
the Scheme.
- Irrevocable Undertakings and Voting and Support
Agreements
In respect of Randgold Shares
Barrick has received irrevocable undertakings to
vote in favour of the Scheme at the Jersey Court Meeting and the
resolutions to be proposed at the Extraordinary General Meeting
from the directors of Randgold in respect of 997,696 Randgold
Shares, representing approximately 1.06 per cent. of the existing
issued ordinary share capital.
The undertakings from the directors of Randgold
will cease to be binding only if Barrick announces (with the
consent of the Panel) that it does not intend to make or proceed
with the Merger or if the Scheme lapses or is withdrawn (other than
where Barrick has elected to exercise its right to proceed by way
of a Takeover Offer and such Takeover Offer has not lapsed or been
withdrawn), but will remain binding in the event that a higher
competing offer for Randgold is made.
In respect of Barrick Shares
The directors of Barrick have entered into
voting and support agreements to vote in favour of the Barrick
Shareholder Resolution and the Continuance at the Barrick Special
Meeting with Randgold in respect of 2,780,622 Barrick Shares,
representing approximately 0.238 per cent. of the Barrick Shares
currently in issue.
These voting and support agreements will cease
to be binding only if Barrick announces that it does not intend to
make or proceed with the Merger or if the Scheme lapses or is
withdrawn (other than where Barrick has elected to exercise its
right to proceed by way of a Takeover Offer and such Takeover Offer
has not lapsed or been withdrawn), but will remain binding in the
event that a Barrick Superior Proposal is made.
Further details of these irrevocable
undertakings and voting and support agreements are set out in
Appendix 3 to this announcement.
- Information relating to Barrick
Barrick is one of the world’s leading
international gold companies, with annual gold production and gold
reserves that are among the largest in the industry. Barrick also
produces significant amounts of copper, principally from its
Zaldívar joint venture, Jabal Sayid joint venture and its Lumwana
mine.
Barrick was founded in 1983 and is currently
headquartered in Toronto, Canada. If the Continuance is approved at
the Barrick Special Meeting, Barrick’s primary corporate office
will remain in Toronto, Canada. During its first ten years, Barrick
focused on acquiring and developing properties in North America,
notably its Goldstrike property on the Carlin Trend in Nevada.
Since 1994, Barrick has strategically expanded beyond its North
American base and now operates on five continents. More than 75% of
Barrick’s gold production comes from projects in the Americas.
Barrick also has a presence in Australia, Chile, Saudi Arabia and
Zambia. Barrick continues to strengthen its international presence
through strategic relationships with external partners such as
Shandong Gold, Zijin Mining, Antofagasta Plc and Ma’aden. Barrick
has established a diverse portfolio of assets, with a combination
of brownfield projects and a number of the world’s largest
undeveloped greenfield projects.
Barrick’s shares trade on the Toronto Stock
Exchange and the New York Stock Exchange. The registered office of
Barrick is 161 Bay Street, Suite 3700, Toronto, Ontario M5J 2S1,
Canada.
For the financial year ended 31 December 2017,
Barrick reported gold production of 5.323 million ounces, revenue
of USD 8,374 million and net earnings of USD 1,516 million. Barrick
also reported copper production of 413 million pounds of copper for
the financial year ended 31 December 2017.
- Information relating to Randgold
Randgold is a leading Africa-focused gold mining
and exploration company, with an extensive portfolio of mines and
greenfield and brownfield projects.
Randgold was founded in 1995 and is
headquartered in Jersey, Channel Islands. Over the past 23 years,
Randgold has established an extensive portfolio of mines and
exploration programmes in West and Central Africa including two
Tier One Gold Assets in Mali and the Democratic Republic of Congo.
Randgold continues to expand its portfolio by developing mutually
beneficial partnerships with host governments, communities and
joint venture partners. Such partnerships include Randgold’s joint
ventures with AngloGold Ashanti in the Democratic Republic of Congo
and with Endeavour Mining and Newcrest in Côte d’Ivoire.
Randgold’s shares trade on the London Stock
Exchange and its ADSs trade on NASDAQ. The registered office of
Randgold is 3rd Floor, Unity Chambers, 28 Halkett Street, St
Helier, Jersey, JE2 4WJ, Channel Islands.
For the financial year ended 31 December 2017,
Randgold reported gold production of 1.315 million ounces, revenue
of USD 1,280 million and net profit of USD 335 million.
- Directors, management and employees, research and
development, locations
Following completion of the Merger, Barrick’s
head office and certain key functions will continue to be located
in Toronto. Barrick does not intend to close any of
Randgold’s existing offices. If the Continuance is approved by
Barrick Shareholders, the New Barrick Group’s registered and
records office will be located at 1600 - 925 West Georgia Street,
Vancouver, British Columbia V6C 3L2. Barrick has no intention to
make any changes with respect to the redeployment of Randgold’s
existing fixed assets. Owing to the nature of its business,
Randgold does not have a research and development function.
However, Randgold has a portfolio of exploration assets and the New
Barrick Group intends to leverage Randgold’s successful exploration
expertise to drive value creation across the New Barrick Group’s
enlarged asset portfolio.
Following completion of the Merger, Mark
Bristow, Chief Executive Officer of Randgold, will become President
and Chief Executive Officer of the New Barrick Group, and Graham
Shuttleworth, Finance Director and Chief Financial Officer of
Randgold, will become Senior Executive Vice President and Chief
Financial Officer of the New Barrick Group.
Details of their service contracts with the New
Barrick Group, which will become effective upon completion of the
Merger, will be set out in the Scheme Document. No retention award
or bonus will be granted to Mark Bristow or Graham Shuttleworth in
connection with the Merger.
Following completion of the Merger, the
operational management structure will be conducted through three
regional teams, covering North America, South America and Africa
& Middle East respectively. The North America and South America
teams will be drawn primarily from the existing Barrick
workforce.
Barrick does not anticipate any headcount
reduction in Randgold’s workforce at the operational and management
level as a result of the Merger. It is intended that existing
Randgold employees will form the core of a regional African
management team which will oversee the operations of the combined
African & Middle East assets of the New Barrick Group. This
will help the New Barrick Group benefit from economies of scale and
the experience of a dedicated African-focused management team.
Following the completion of the Merger, the new
executive management team of the New Barrick Group will continue to
implement a decentralised management and partnership structure
which may result in some workforce reduction in respect of persons
currently employed as part of the Barrick Group. These headcount
reductions will be focussed on reducing redundant roles between the
operations, projects and the corporate centre. It is expected
that any job reductions will be identified by the new executive
management team of the New Barrick Group within the 12 months
following completion of the Merger. Barrick does not intend
to make any material change in the balance of skills and functions
of the employees of the Randgold Group. Except as described above,
Barrick does not intend to make any material change in the
conditions of employment of the employees and management of the
Randgold Group.
The Randgold Group does not provide
company-funded pension plans; however, Randgold Group provides a
defined contribution plan under which the group pays fixed
contributions into a separate entity. Barrick does not intend to
make any changes to the Randgold Group’s pension arrangements in
the 12 months which follow the Effective Date. Following completion
of the Merger, the existing employment rights, including pension
rights, of management and employees of the Randgold Group and the
Barrick Group will be fully safeguarded in accordance with
contractual and statutory requirements, as will the contractual
rights of any directors and officers who are not employees.
There is no intention to redeploy material fixed
assets of the New Barrick Group or, except as described above, make
changes to locations of business of the New Barrick Group.
Randgold Shares are currently listed on the
Official List and Randgold ADSs are admitted to trading on NASDAQ.
As set out in paragraph 19, a request will be made to cancel
trading in Randgold Shares on the London Stock Exchange and to
delist Randgold Shares from the Official List and to delist the
Randgold ADSs from NASDAQ, in each case with effect as of or
shortly following the Effective Date. Randgold will also be
re-registered as a private company.
No statements made in paragraphs 4 or 10
constitute "post-offer undertakings" for the purposes of Rule 19.5
of the Code.
- Randgold Share Plans
Participants in the Randgold Share Plans will be
contacted regarding the effect of the Merger on their rights under
these plans and provided with further details concerning the
proposals which will be made to them in due course. Details of the
proposals will be set out in the Scheme Document and in separate
letters to be sent to participants in the Randgold Share Plans.
In summary, it has been agreed that awards under
the Randgold Long-Term Incentive Plan will be exchanged for
equivalent awards over Barrick Shares. Awards under the Randgold
Co-investment Plan will vest in connection with the Merger to the
extent that the applicable performance conditions have been
satisfied; provided that, such awards will be subject to time
pro-rating. For executive directors, a time-prorated number of
awards under the Randgold Restricted Share Scheme will vest in
connection with the Merger to the extent that the applicable
performance conditions have been satisfied. To the extent that any
such award under the Randgold Restricted Share Scheme has not
vested as a result of time pro-rating, such portion of the award
will be exchanged for equivalent awards over Barrick Shares. For
all participants other than executive directors, all awards under
the Randgold Restricted Share Scheme will vest in connection with
the Merger to the extent that the applicable performance conditions
have been satisfied.
Additional holding periods will apply to all
outstanding awards held by Mark Bristow and Graham
Shuttleworth.
- Randgold ADS program
Barrick and Randgold have agreed that they will
put arrangements in place to allow holders of Randgold ADSs to
participate in the Merger. The Depositary will contact holders of
Randgold ADSs with further details of these proposals in due
course.
Randgold ADS holders should take particular
notice of the deadline for providing voting instructions, which may
be earlier than that applicable to Randgold Shareholders. Randgold
ADS holders should consult the Scheme Document and other material
to be distributed by the Depositary in connection with the Merger
for further information in respect of giving voting instructions in
respect of their Randgold ADSs.
Randgold ADS holders will not be entitled to
attend either the Jersey Court Meeting or the Extraordinary General
Meeting but may vote in such meetings by returning a voting
instruction card (which will be sent out in due course) to the
Depositary or by instructing their financial intermediary to do so.
In addition, if Randgold ADS holders surrender their Randgold ADSs
to the Depositary for cancellation and withdraw the Randgold Shares
underlying the Randgold ADSs in sufficient time to be entered on
the Randgold register of members, they may attend and vote at the
meetings as a Randgold Shareholder.
At least ten days before the Effective Date,
Randgold shall notify NASDAQ of its intent to delist and deregister
the Randgold ADSs. Shortly after the Effective Date, Randgold will
file a Form 25 and subsequently a Form 15 with the SEC to delist
the Randgold ADSs from trading on NASDAQ and to deregister and
terminate Randgold’s reporting obligations under the US Securities
Exchange Act of 1934. Barrick intends to terminate Randgold’s ADS
programme shortly after the Effective Date.
- Acacia
The terms of an amended and restated
relationship agreement dated 16 November 2014 entered into between
Barrick and Acacia (the “Relationship Agreement”), among other
matters, grant Acacia a right of pre-emption (the “Pre-emption
Right”) in the event that Barrick proposes to acquire any business
or interest having more than 50 per cent. of its overall mining
resources both located in Africa and in gold and/or silver. This
would include Randgold. Notwithstanding the foregoing, any exercise
of the Pre-emption Right by Acacia in respect of Randgold would
require the approval, by ordinary resolution, of Acacia’s
shareholders pursuant to the UK Listing Authority’s listing rules
by virtue of the size of Randgold relative to Acacia. Barrick owns
approximately 63.9 per cent. of the issued share capital of Acacia
and therefore any exercise of the Pre-emption Right by Acacia in
respect of Randgold would be contingent on Barrick’s support.
Barrick has provided notice to Acacia of the proposed Merger and
has indicated to Acacia that it would not support an acquisition of
Randgold by Acacia.
- Offer-related Arrangements
Confidentiality agreement
Barrick and Randgold have entered into a
confidentiality agreement on 28 April 2018, pursuant to which each
of Barrick and Randgold has undertaken, amongst other things, to:
(a) keep confidential information relating to the Merger and
the other party and not to disclose such confidential information
to third parties (other than certain permitted parties) unless
required by law or regulation or certain other limited exceptions
apply; and (b) use the confidential information for the sole
purpose of evaluating the other party’s group and/or the Merger
and/or negotiating and/or advising on the Merger. These
confidentiality obligations remain in force until 28 April
2020.
Cooperation Agreement
Barrick and Randgold have entered into a
cooperation agreement dated 24 September 2018 with respect to
conduct of the Merger. Under the terms of the Cooperation
Agreement, Barrick and Randgold have agreed, among other things,
that:
- Barrick and Randgold shall cooperate with each other in order
to assist in obtaining clearance from competition and other
governmental bodies in order to satisfy the Conditions relating to
such clearances;
- Barrick and Randgold shall provide each other with certain
information and assistance in the preparation of the Scheme
Document and the Barrick Information Circular;
- Barrick and Randgold shall cooperate to write to participants
in the Randgold Share Plans and to inform them of the impact of the
Scheme on their awards;
- Barrick and Randgold intend to implement the Merger by way of
the Scheme, subject to the ability of Barrick with the consent of
the Panel and Randgold or, in certain circumstances, without the
consent of Randgold, to proceed by way of a Takeover Offer in the
circumstances described in paragraph 18 below;
- Barrick shall pay to Randgold a break fee payment in the amount
of USD 300 million if, following this announcement, any of the
following events occur:
- the Cooperation Agreement is terminated because of a Barrick
Board Adverse Recommendation Change or because Barrick has breached
its obligations relating to Competing Proposals for Barrick in any
material respect, which breach is ongoing following the date that
is two calendar days following Randgold’s delivery of written
notice to Barrick of such breach or such breach is otherwise not
curable; provided, however, that no break payment shall be payable
in the event that, prior to such termination (A) any person
acting in concert with Randgold or at Randgold’s direction or with
Randgold’s agreement made, solicited, initiated or otherwise
entered into an agreement, commitment or understanding regarding a
Competing Proposal for Barrick (without any regard to the last
paragraph of that definition) or (B) a Randgold Board Adverse
Recommendation Change has occurred; or
- (A) a Competing Proposal for Barrick is made to Barrick or
is made directly to Barrick Shareholders generally or otherwise
becomes publicly known or any person has publicly announced an
intention (whether or not conditional) to make a Competing Proposal
for Barrick; (B) the Cooperation Agreement is terminated
because the approval of the Barrick Shareholder Resolution is not
obtained at the Barrick Special Meeting or at any adjournment or
postponement thereof or in certain circumstances where Barrick
adjourns or postpones the Barrick Special Meeting for more than 15
days or fails to publish the Barrick Information Circular as
required pursuant to Barrick’s obligations under the Cooperation
Agreement (if such breach is ongoing following the date that is two
calendar days following Randgold’s delivery of written notice to
Barrick of such breach or is otherwise not curable) or the Barrick
Information Circular does not contain the Barrick Recommendation;
(C) no Randgold Board Adverse Recommendation Change has
occurred prior to such termination; and (D) within 12 months
of the termination of the Cooperation Agreement Barrick enters into
a definitive agreement for a Competing Proposal for Barrick, the
Board of Barrick (or any committee thereof) adopts, approves,
recommends or declares advisable any Competing Proposal for
Barrick, or a Competing Proposal for Barrick is completed. For
purposes of the foregoing, the term Competing Proposal for Barrick
has the meaning set forth in Appendix 4, except that references to
“20% or more” are deemed to be references to “50% or more”.
Only one break fee payment can be made and such
payment (plus certain additional amounts in respect of VAT) would
be Randgold’s sole and exclusive remedy in the relevant
circumstances, except with respect to fraud; and
- Barrick has agreed to a certain non-solicit undertaking
pursuant to which Barrick shall not directly or indirectly solicit
any Competing Proposal for Barrick or, subject to certain
exceptions, furnish any information on any person seeking to make a
Competing Proposal for Barrick.
15. Strategic Investment Agreement and Acknowledgment
On 24 September 2018, it is expected that
Barrick and Shandong Gold will enter into the Strategic Investment
Agreement. Under the Strategic Investment Agreement, Shandong Gold
will agree to purchase Barrick Shares with an aggregate value of up
to USD 300 million, and Barrick will agree to invest an equivalent
amount in shares of Shandong Mining, a publicly listed company
controlled by Shandong Gold. These mutual investments will be
required to be made within 12 months from the date of the agreement
unless otherwise agreed, and will be made through the facilities of
the stock exchanges on which their respective shares are
listed. The Strategic Investment Agreement will also contain
consultation and orderly market obligations on each party in
relation to certain disposals of shares acquired thereunder. The
Strategic Investment Agreement will not confer any governance
rights. In connection with the Strategic Investment Agreement,
Shandong Gold will deliver the Acknowledgment to Barrick, in which
it will acknowledge and undertake that both it and its affiliates
will comply with certain restrictions on the acquisition of Barrick
Shares and Randgold Shares imposed by Canadian and U.S. securities
laws and the Code.
The Strategic Investment Agreement and the
Acknowledgment will constitute dealing arrangements of the kind
referred to in Note 11 of the definition of “acting in concert” in
the Code.
- Randgold Scheme and Barrick Shareholder
Resolution
It is intended that the Merger will be
implemented by way of a court-sanctioned scheme of arrangement
between Randgold and the Scheme Shareholders, under Article 125 of
the Jersey Companies Law. The purpose of the Scheme is to provide
for Barrick to become the owner of the entire issued and to be
issued share capital of Randgold.
The procedure involves, among other things, an
application by Randgold to the Jersey Court to sanction the Scheme,
in consideration for which the Scheme Shareholders will receive the
New Barrick Shares.
The issuance of the New Barrick Shares requires
the Barrick Shareholder Resolution to be approved by a simple
majority of the votes cast by Barrick Shareholders represented in
person or by proxy at the Barrick Special Meeting. The Board of
Barrick intends to recommend to Barrick Shareholders to vote in
favour of the Barrick Shareholder Resolution.
The Scheme is subject to satisfaction (or, as
appropriate, waiver) of the Conditions and certain further terms
referred to in Appendix 1 to this announcement and to the full
terms and conditions to be set out in the Scheme Document, and will
only become effective if, among other things, the following events
occur on or before the Longstop Date:
- a resolution to approve the Scheme is passed by a majority in
number of the Scheme Shareholders present and voting (and entitled
to vote) at the Court Meeting, either in person or by proxy,
representing three-fourths (3/4ths) or more of the voting rights of
all Scheme Shares voted;
- the Special Resolution necessary to implement the Scheme is
passed by the requisite majority of Randgold Shareholders at the
Extraordinary General Meeting (which will require the approval of
Randgold Shareholders representing at least two-thirds of the votes
cast at the Extraordinary General Meeting either in person or by
proxy);
- the Barrick Shareholder Resolution necessary to approve the
issuance of the New Barrick Shares is passed by a simple majority
of the votes cast by Barrick Shareholders represented in person or
by proxy at the Barrick Special Meeting;
- the Scheme is sanctioned (with or without modification, on
terms agreed by Barrick and Randgold) by the Jersey Court; and
- the Scheme Court Order is delivered to the Registrar of
Companies.
Upon the Scheme becoming effective: (i) it will
be binding on all Scheme Shareholders, irrespective of whether or
not they attended or voted at the Jersey Court Meeting or the
Extraordinary General Meeting (and if they attended and voted,
whether or not they voted in favour); and (ii) share certificates
in respect of Randgold Shares will cease to be valid and
entitlements to Randgold Shares held within the CREST system will
be cancelled.
Any Randgold Shares issued before the Scheme
Record Time will be subject to the terms of the Scheme. The
resolutions to be proposed at the Extraordinary General Meeting
will, among other things, provide that the Randgold Articles be
amended to incorporate provisions requiring any Randgold Shares
issued after the Scheme Record Time (other than to Barrick and/or
its nominees) to be automatically transferred to Barrick on the
same terms as the Merger (other than terms as to timings and
formalities). The provisions of the Randgold Articles (as amended)
will avoid any person (other than Barrick and its nominees) holding
shares in the capital of Randgold after the Effective Date.
If the Scheme does not become effective on or
before the Longstop Date, it will lapse and the Merger will not
proceed (unless the Panel otherwise consents).
It is expected that the Scheme Document,
containing further information about the Merger and notices of the
Jersey Court Meeting and Extraordinary General Meeting, together
with the Forms of Proxy, will be mailed to Randgold Shareholders
and (for information only) participants in the Randgold Share Plans
and other persons with information rights as soon as practicable.
The Scheme Document will also contain the expected timetable for
the Merger, specify the necessary actions to be taken by Randgold
Shareholders, and set out how Randgold Shareholders can hold,
access and trade the New Barrick Shares.
It is expected that the Barrick Information
Circular, containing further information about the Merger and
notice of the Barrick Special Meeting, will be mailed to Barrick
Shareholders at or around the same time as the Scheme
Document. It is also expected that the Barrick Special
Meeting will be held on the same day as the Randgold Meetings,
which will be on or around 5 November 2018. The Scheme is expected
to be effective by Q1 2019, subject to the satisfaction or waiver
of all relevant conditions.
The Scheme will be governed by Jersey law and
will be subject to the jurisdiction of the Jersey courts and to the
conditions and further terms set out in this announcement and in
the Scheme Document. The Merger and the Scheme will be subject to
the applicable requirements of the London Stock Exchange, the FCA,
the Code, the Toronto Stock Exchange, the NYSE, NASDAQ and
applicable securities laws in Canada and the United States.
Subject to satisfaction or waiver of the
Conditions, the Merger is expected to be completed by Q1 2019.
- Competition clearances
The Merger is conditional on receiving
competition clearance from the relevant authorities in South
Africa.
- Barrick’s Right to Switch to Takeover Offer
Subject to the terms of the Cooperation
Agreement, Barrick reserves the right to elect in accordance with
the Cooperation Agreement to implement the Merger by way of a
Takeover Offer for the entire issued and to be issued share capital
of Randgold not already held by Barrick as an alternative to the
Scheme. In such an event, the Takeover Offer will be implemented on
the same terms (subject to appropriate amendments), so far as
applicable and subject to the terms of the Cooperation Agreement,
as those which would apply to the Scheme.
If the Merger is effected by way of a Takeover
Offer and such Takeover Offer becomes or is declared unconditional
in all respects and sufficient acceptances are received, Barrick
intends to:
- make a request to the London Stock Exchange to cancel trading
in Randgold Shares on its market for listed securities;
- make a request to the UK Listing Authority to cancel the
listing of the Randgold Shares from the Official List;
- make a request to the SEC to delist the Randgold ADSs from
trading on NASDAQ and to deregister and terminate Randgold’s
reporting obligations under the US Securities Exchange Act of 1934;
and
- exercise its rights to apply the relevant provisions of Part 18
of the Jersey Companies Law to acquire compulsorily the remaining
Randgold Shares to which the Takeover Offer extends and in respect
of which the Takeover Offer has not been accepted.
- Delisting and re-registration of Randgold Shares
It is intended that dealings in Randgold Shares
(including Randgold Shares underlying the Randgold ADSs) will be
suspended at 5.00 p.m. (London time) on the business day prior to
the Effective Date. It is further intended that an application will
be made to the UK Listing Authority for the cancellation of the
listing of the Randgold Shares (including Randgold Shares
underlying the Randgold ADSs) on the Official List and to the
London Stock Exchange for the cancellation of trading of the
Randgold Shares (including Randgold Shares underlying the Randgold
ADSs) on the London Stock Exchange’s main market for listed
securities, with effect as of or shortly following the Effective
Date. With respect to the Randgold ADSs, at least ten days before
the Effective Date, Randgold shall notify NASDAQ of its intent to
delist and deregister the Randgold ADSs. Shortly after the
Effective Date, Randgold will file a Form 25 and subsequently a
Form 15 with the SEC to delist the Randgold ADSs from trading on
NASDAQ and to deregister and terminate Randgold’s reporting
obligations under the US Securities Exchange Act of 1934.
It is also intended that, following the Scheme
becoming effective, Randgold will be re-registered as a private
company under the relevant provisions of the Jersey Companies
Law.
It is also expected that Randgold will make an
application to certain Canadian securities commissions after the
Effective Date to cease to be a reporting issuer in Canada.
- Fractional entitlements
Fractions of New Barrick Shares will not be
issued to Randgold Shareholders. Instead, Randgold Shareholders who
otherwise would have received a fraction of a New Barrick Share
will instead receive an amount in cash rounded to the nearest cent,
based on the amount obtained by multiplying such fraction by the
average Closing Price of Barrick Shares on the NYSE on each of the
five consecutive trading days ending on the trading day that is two
trading days prior to the Effective Date, except that individual
entitlements of less than USD 5.00 will not be paid but will be
retained for the benefit of the New Barrick Group.
- Disclosure of interests in Randgold relevant
securities
Except for the irrevocable undertakings referred
to in paragraph 7 above and the Strategic Investment Agreement and
the undertaking referred to in paragraph 15 above, as at close of
business on 21 September 2018 (being the latest practicable date
prior to the date of this announcement), neither Barrick, nor any
of the directors of Barrick or any member of the Barrick Group,
nor, so far as the directors of Barrick are aware, any person
acting in concert with Barrick for the purposes of the Merger had
any interest in, right to subscribe for, or had borrowed or lent
any Randgold Shares or securities convertible or exchangeable into
Randgold Shares, nor did any such person have any short position
(whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any
agreement to sell or any delivery obligation or right to require
another person to take delivery, or any dealing arrangement of the
kind referred to in Note 11 of the definition of “acting in
concert” in the Code, in relation to Randgold Shares or in relation
to any securities convertible or exchangeable into Randgold
Shares.
In the interests of secrecy prior to this
announcement, Barrick has not made any enquiries in respect of the
matters referred to in this paragraph of certain parties who may be
deemed by the Panel to be acting in concert with Barrick for the
purposes of the Scheme. Enquiries of such parties will be made as
soon as practicable following the date of this announcement and any
disclosure in respect of such parties will be included in the
Scheme Document.
- Overseas Shareholders
The availability of the Merger and the
distribution of this announcement to persons resident in, or
citizens of, or otherwise subject to, jurisdictions outside Canada,
the United States, the United Kingdom, or Jersey may be affected by
the laws of the relevant jurisdiction. Such persons should inform
themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction. Randgold Shareholders and
holders of the Randgold ADSs who are in any doubt regarding such
matters should consult an appropriate independent professional
adviser in the relevant jurisdiction without delay.
This announcement does not constitute an offer
for sale for any securities or an offer or an invitation to
purchase any securities. Randgold Shareholders and holders of the
Randgold ADSs are advised to read carefully the Scheme Document and
related Forms of Proxy once these have been dispatched.
- Randgold issued share capital and Barrick issued
common shares
In accordance with Rule 2.9 of the Code,
Randgold confirms that it had 94,475,346 Randgold Shares in issue
as at the close of business on 21 September 2018, each ordinary
share carrying one vote. 58,186 ordinary shares are currently held
on trust and do not confer voting rights. Accordingly, the total
number of voting rights is 94,417,160. The International Securities
Identification Number for Randgold Shares is GB00B01C3S32.
Randgold has an American Depositary Share
(“ADS”) programme, for which Citibank, N.A. acts as depositary, one
ADS represents one Randgold Share, with ISIN US7523443098. The ADSs
trade on NASDAQ.
In accordance with Rule 2.9 of the Code, Barrick
confirms that it had 1,167,593,272 common shares with no par value
in issue as at the close of business on 21 September 2018. The
International Securities Identification Number for Barrick Shares
is CA0679011084.
- Documents published on a website
Copies of the following documents will, by no
later than 12 noon (London time) on 25 September 2018, be published
on Randgold’s website at www.randgoldresources.com and/or Barrick’s
website at www.barrick.com or www.barrick.com/a-new-champion (as
relevant) until the end of the Merger:
- this announcement;
- the confidentiality agreement referred to in paragraph 14
above;
- the cooperation agreement referred to in paragraph 14
above;
- the irrevocable undertakings and voting and support agreements
listed in Appendix 3 to this announcement;
- the Strategic Investment Agreement referred to in paragraph 15
above; and
- the Acknowledgment referred to in paragraph 15 above.
- General
The Merger will be subject to the Conditions and
certain further terms set out in Appendix 1 and the further terms
and conditions set out in the Scheme Document when issued.
The bases and sources of certain financial
information contained in this announcement are set out in Appendix
2. Certain terms used in this announcement are defined in Appendix
4.
- Enquiries
Barrick |
|
|
Deni Nicoski
Senior Vice President Investor Relations Telephone: +1 416 307-7474
Email: dnicoski@barrick.com |
Andy
Lloyd Senior Vice President Communications Telephone: +1 416
307-7414 Email: alloyd@barrick.com |
Carole Cable
PartnerBrunswick Group LLPTel +44 (0)20 7404
5959 Direct +44 (0)20 7396 7458Mob +44 (0)7974 982
458ccable@brunswickgroup.com |
M.
Klein and Co. (financial adviser to
Barrick) |
David Friedman |
+1-212-380-7500 |
|
Peter Seibold |
|
|
Cyrus Hiramanek |
|
|
Morgan
Stanley (financial adviser to Barrick) |
Colm Donlon |
+44 207 425
8000 |
|
Richard Tory |
+1 416 943
8400 |
|
Jan Lennertz |
+1 212 761
4000 |
|
Randgold |
|
|
Chief
Executive Mark Bristow |
Finance
Director and Chief Financial OfficerGraham Shuttleworth |
Investor &
Media Relations Kathy du Plessis+44 20 7557
7738randgold@dpapr.com |
CIBC
(financial adviser to Randgold) |
Neil Johnson |
+44 20 7234
6000 |
|
Oliver Ward |
|
|
Barclays (financial adviser and corporate broker to
Randgold) |
|
Paul Knight |
+1 (416) 863
8900 |
|
Nishant Amin |
+44 (0) 20
7623 2323 |
|
Davies Ward Phillips & Vineberg LLP,
Freshfields Bruckhaus Deringer LLP, Cravath, Swaine & Moore LLP
and Carey Olsen are retained as legal advisers for Barrick.
Norton Rose Fulbright LLP, Norton Rose Fulbright
US LLP, Stikeman Elliott LLP and Ogier are retained as legal
advisers for Randgold.
Further information
This announcement is for information purposes
only and is not intended to and does not constitute, or form part
of, an offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Merger or otherwise,
nor shall there be any sale, issuance or transfer of securities of
Randgold in any jurisdiction in contravention of applicable law.
Subject to the right of Barrick to implement the Merger by way of a
Takeover Offer in accordance with the terms of the Cooperation
Agreement, the Merger will be implemented solely by means of the
Scheme Document, which will contain the full terms and conditions
of the Merger including details of how to vote in respect of the
Merger. Barrick will prepare the Barrick Information Circular to be
distributed to Barrick Shareholders, containing details of the
Merger, notice of the Barrick Special Meeting and information on
the New Barrick Shares. Barrick and Randgold urge Randgold
Shareholders to read the Scheme Document carefully when it becomes
available, because it will contain important information in
relation to the Merger and the New Barrick Shares. Barrick also
urges Barrick Shareholders to read the Barrick Information Circular
carefully when it becomes available because it will contain
important information in relation to the Merger and the New Barrick
Shares.
Any vote in respect of resolutions to be
proposed at the Randgold Meetings to approve the Merger, the Scheme
or related matters, or other responses in relation to the Merger,
should be made only on the basis of the information contained in
the Scheme Document. Similarly, any vote in respect of resolutions
to be proposed at the Barrick Special Meeting to approve the
issuance of New Barrick Shares under the Merger should be made only
on the basis of the information contained in the Barrick
Information Circular.
Please be aware that addresses, electronic
addresses and certain other information provided by Randgold
Shareholders, persons with information rights and other relevant
persons for the receipt of communications from Randgold may be
provided to Barrick during the offer period as required under
Section 4 of Appendix 4 of the Code to comply with Rule
2.11(c).
M. Klein and Co., which is authorized by the
U.S. Securities & Exchange Commission and regulated in the
United States by the Financial Industry Regulatory Authority
(“FINRA”) and the U.S. Securities & Exchange Commission, is
acting exclusively for Barrick and no one else in connection with
the Merger and will not be responsible to anyone other than Barrick
for providing the protections afforded to clients of M. Klein and
Co. or for providing advice in relation to the Merger or any other
matter referred to in this announcement. Neither M. Klein and Co.
nor any of its subsidiaries, branches or affiliates owes or accepts
any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of M. Klein and Co. in connection
with any matter referred to in this announcement or otherwise.
Morgan Stanley, which is authorised by the
Prudential Regulation Authority (“PRA”) and regulated by the FCA
and the PRA in the United Kingdom, is acting exclusively as
financial adviser to Barrick and no one else in connection with the
Merger, this announcement and the matters described herein, and
shall not be responsible to anyone other than Barrick for providing
the protections afforded to clients of Morgan Stanley or for
providing advice in connection with the Merger, this announcement
or any matter referred to herein. Neither Morgan Stanley nor any of
its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Morgan Stanley in connection with the
Merger, this announcement or any matter referred to herein.
CIBC, which is supervised and regulated by the
Office of the Superintendent of Financial Institutions in Canada
and, in the UK, authorised by the PRA, subject to regulation by the
FCA and limited regulation by the PRA, is acting exclusively as
financial adviser to Randgold and for no one else in connection
with the Merger and will not be responsible to anyone other than
Randgold for providing the protections afforded to clients of CIBC
or for providing advice in relation to the Merger, the content of
this announcement or any matter or other document referred to
herein. Neither CIBC nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of CIBC in connection with this announcement, any statement
contained herein, the Merger or otherwise.
Barclays, which is authorised by the PRA and
regulated in the United Kingdom by the FCA and the PRA, is acting
exclusively for Randgold and no one else in connection with the
Merger and will not be responsible to anyone other than Randgold
for providing the protections afforded to clients of Barclays or
for providing advice in relation to the Merger or any other matter
referred to in this announcement. Neither Barclays nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Barclays in connection with any
matter referred to in this announcement or otherwise.
Technical information
The technical and scientific information
contained in this announcement in respect of Randgold has been
reviewed and approved for release by Simon Bottoms, Group Mineral
Resource Manager for Randgold and Rodney Quick Group General
Manager Evaluations for Randgold who are Randgold’s Qualified
Persons as defined by National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
The technical and scientific information
contained in this announcement in respect of Barrick has been
reviewed and approved for release by Rick Sims, Registered Member
SME, Vice President, Resources and Reserves of Barrick, and a
Qualified Person as defined by National Instrument 43-101 –
Standards of Disclosure for Mineral Projects.
Overseas jurisdictions
The release, publication or distribution of this
announcement in or into jurisdictions other than Canada, the United
States, the United Kingdom and Jersey may be restricted by law and
therefore any persons who are subject to the law of any
jurisdiction other than Canada, the United States, the United
Kingdom and Jersey should inform themselves about, and observe, any
applicable legal or regulatory requirements. In particular the
ability of persons who are not citizens of and resident in Canada,
the United States, the United Kingdom or Jersey, to vote their
Randgold Shares with respect to the Scheme at the Jersey Court
Meeting, or to appoint another person as proxy to vote at the
Jersey Court Meeting on their behalf, may be affected by the laws
of the relevant jurisdictions in which they are located or of which
they are citizens. Any failure to comply with the applicable
restrictions may constitute a violation of the securities laws of
any such jurisdiction. Relevant clearances have not been, and will
not be, obtained from the securities commission or similar
regulatory authority of any province or territory of Canada. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Merger disclaim any responsibility or
liability for the violation of such restrictions by any person.
This announcement has been prepared for the purposes of complying
with applicable English law, Jersey law, certain applicable
securities laws in Canada and the United States, the Listing Rules,
the rules of the London Stock Exchange and the Code and the
information disclosed may not be the same as that which would have
been disclosed if this announcement had been prepared in accordance
with the laws of jurisdictions outside of the UK and Jersey.
Copies of this announcement and formal
documentation relating to the Merger will not be and must not be,
mailed or otherwise forwarded, distributed or sent in, into or from
any Restricted Jurisdiction or any jurisdiction where to do so
would violate the laws of that jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. Doing so may render invalid
any related purported vote in respect of the Merger. If the Merger
is implemented by way of Takeover Offer (unless otherwise permitted
by applicable law or regulation), the Takeover Offer may not be
made, directly or indirectly, in or into or by use of the mails or
any other means or instrumentality (including, without limitation,
facsimile, email or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or any facility of
a national, state or other securities exchange of any Restricted
Jurisdiction and the Takeover Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or
from within any Restricted Jurisdiction.
Further details in relation to Overseas
Shareholders will be contained in the Scheme Document and Randgold
Shareholders are advised to read carefully the Scheme Document and
related Forms of Proxy once these have been mailed.
Additional information for US
investors
The Merger is being made to acquire the
securities of a Jersey company by means of a scheme of arrangement
provided for under Jersey law. Any securities issued as a result of
this Merger by means of a scheme of arrangement will be issued in
reliance upon the exemption from the registration requirements of
the US Securities Act of 1933, pursuant to the exemption from
registration set forth in Section 3(a)(10) thereof, and also will
not be subject to the tender offer rules promulgated under the US
Securities Exchange Act of 1934. Accordingly, the Scheme will be
subject to disclosure requirements and practices applicable in the
UK and Jersey to schemes of arrangement, which are different from
the disclosure requirements of the US tender offer rules. Except in
relation to non-GAAP financial performance measures, the financial
information included in this announcement and the Scheme
documentation has been or will have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) and thus
may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US. If Barrick
exercises its right to implement the acquisition of the Randgold
Shares in accordance with the Cooperation Agreement by way of a
Takeover Offer, such offer will be made in compliance with
applicable US laws and regulations, including the registration
requirements of the US Securities Act of 1933 and the tender offer
rules under the US Securities Exchange Act of 1934 and any
applicable exemptions provided thereunder.
Barrick’s mineral reserves and mineral resources
have been estimated in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects, as required by
Canadian securities regulatory authorities. Randgold’s mineral
resource and ore reserve estimates have been prepared according to
the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves standards and guidelines published and
maintained by the Joint Ore Reserves Committee of the Australasian
Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia (the JORC (2012)
Code). Randgold has reconciled the mineral resources and ore
reserves to the definition standards incorporated in National
Instrument 43-101 and there are no material differences. For United
States reporting purposes, Industry Guide 7 (under the US
Securities Exchange Act of 1934), as interpreted by the Staff of
the SEC, applies different standards in order to classify
mineralization as a reserve. In addition, while the terms
“measured,” “indicated” and “inferred” mineral resources are
required pursuant to National Instrument 43-101 – Standards of
Disclosure for Mineral Projects, the SEC does not recognize such
terms. Canadian and JORC (2012) Code standards differ significantly
from the requirements of the SEC, and mineral resource information
contained herein and in the documents incorporated herein by
reference is not comparable to similar information regarding
mineral reserves disclosed in accordance with the requirements of
the SEC. Investors should understand that “inferred” mineral
resources have a great amount of uncertainty as to their existence
and as to their economic and legal feasibility. In addition,
investors are cautioned not to assume that any part or all of any
mineral resources constitute or will be converted into reserves.
Accordingly, information contained in this announcement and in the
documents incorporated by reference herein containing descriptions
of Barrick’s and Randgold’s mineral deposits may not be comparable
to similar information made public by United States companies
subject to the reporting requirements of United States federal
securities laws and the rules and regulations thereunder.
US Holders and US Randgold ADS Holders also
should be aware that the transaction contemplated herein may have
tax consequences in the United States and, that such consequences,
if any, are not described herein. US Holders and US Randgold ADS
Holders are urged to consult with independent professional advisors
regarding the legal, tax and financial consequences of the Merger
applicable to them.
It may be difficult for US Holders and US
Randgold ADS Holders to enforce their rights and claims arising out
of the US federal securities laws, since Barrick and Randgold are
located in countries other than the US, and some or all of their
officers and directors may be residents of countries other than the
US. US Holders and US Randgold ADS Holders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to
compel a non-US company and its affiliates to subject themselves to
a US court’s judgment.
In accordance with normal UK practice, Barrick
or its nominees, or its brokers (acting as agents), may from time
to time make certain purchases of, or arrangements to purchase,
Randgold Shares outside of the US, other than pursuant to the
Merger, until the date on which the Merger and/or Scheme becomes
effective, lapses or is otherwise withdrawn. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the UK, will be reported
to a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com.
Additional information for Canadian
investors
The enforcement by Canadian Holders or Canadian
Randgold ADS Holders of civil liabilities under the Canadian
securities laws may be affected adversely by the fact that Randgold
is incorporated or organized under the laws of a jurisdiction other
than Canada, that some or all of Barrick’s and Randgold’s officers
and directors are and will be residents of countries other than
Canada, that some or all of the experts named in this announcement
may be residents of countries other than Canada, and that all or a
substantial portion of the assets of Barrick, Randgold and such
persons are and will be located outside Canada. As a result, it may
be difficult or impossible for Canadian Holders or Canadian
Randgold ADS Holders to effect service of process within Canada
upon Randgold, Barrick’s and Randgold’s respective officers or
directors or the experts named herein, or to realize against them,
upon judgments of courts of Canada predicated upon liabilities
under Canadian securities laws. In addition, Canadian Holders or
Canadian Randgold ADS Holders should not assume that the courts of
Jersey: (a) would enforce judgments of Canadian courts
obtained in actions against such persons predicated upon civil
liabilities under Canadian securities laws; or (b) would
enforce, in original actions, liabilities against such persons
predicated upon civil liabilities under the Canadian securities
laws.
The distribution of the New Barrick Shares
pursuant to the Merger will constitute a distribution of securities
that is exempt from the prospectus requirements of Canadian
securities law and is exempt from or otherwise is not subject to
the registration requirements under applicable securities law. The
New Barrick Shares received pursuant to the Merger will not be
legended and may be resold through registered dealers in each of
the provinces and territories of Canada provided that (i) the
trade is not a “control distribution” as defined in Canadian
securities law, (ii) no unusual effort is made to prepare the
market or to create a demand for Barrick Shares, (iii) no
extraordinary commission or consideration is paid to a person in
respect of such sale, and (iv) if the selling security holder
is an insider or officer of Barrick, as the case may be, the
selling security holder has no reasonable grounds to believe that
Barrick, as the case may be, is in default of applicable Canadian
securities law.
Canadian Holders and Canadian Randgold ADS
Holders should be aware that the Merger described in this
announcement may have tax consequences in Canada and should consult
their own tax advisors to determine the particular tax consequences
to them of the Merger in light of their particular circumstances,
as well as any tax consequences that may arise under the laws of
any other relevant foreign, state, local or other taxing
jurisdiction.
Additional
information for Australian
investors
The New Barrick Shares may not be publicly
offered, sold or advertised, directly or indirectly, in or from
Australia. Neither this announcement nor any other offering or
marketing material relating to the New Barrick Shares constitutes a
disclosure document or product disclosure statement under Part 6D.2
or Chapter 7 of the Australian Corporations Act and this
announcement has not been, and will not be lodged with the
Australian Securities and Investments Commission. This announcement
does not contain the information required to be contained in a
disclosure document or product disclosure statement for the
purposes of the Australian Corporations Act.
Neither this announcement, nor any other
offering or marketing material relating to the New Barrick Shares
or Merger, may be made available or distributed in Australia other
than to Randgold Shareholders with a registered address in
Australia and their advisors and in compliance with Australian law.
Failure to comply with this restriction may contravene applicable
Australian law.
Additional
information for Swiss
investors
The New Barrick Shares may not be publicly
offered, sold or advertised, directly or indirectly, in or from
Switzerland. Neither this announcement nor any other offering or
marketing material relating to the New Barrick Shares constitutes a
prospectus as such term is understood pursuant to article 652a or
article 1156 of the Swiss Federal Code of Obligations or a listing
prospectus within the meaning of the listing rules of the SIX Swiss
Exchange, and neither this announcement nor any other offering or
marketing material relating to the New Barrick Shares or the
Merger, may be publicly distributed or otherwise made publicly
available in Switzerland.
Additional information for Singaporean
investors
Neither this announcement nor any other offering
or marketing material relating to the New Barrick Shares will be
lodged or registered as a prospectus with the Monetary Authority of
Singapore and the offering made under this announcement is pursuant
to Section 273 of the Securities and Futures Act, Chapter 289 of
Singapore. Accordingly, neither this announcement nor any other
offering or marketing material relating to the New Barrick Shares
may be issued, circulated, distributed or otherwise made publicly
available in Singapore.
Additional information for Hong Kong
investors
The contents of this announcement have not been
reviewed by any regulatory authority in Hong Kong. The public in
Hong Kong is advised to exercise caution in relation to the Merger
and if the public in Hong Kong is in any doubt about any of the
contents of this announcement, they should obtain independent
professional advice.
This announcement must not be issued, circulated
or distributed in Hong Kong other than (1) to “professional
investors” as defined in the SFO and any rules made under the SFO,
(2) to persons and in circumstances which do not result in this
announcement being a “prospectus” as defined in section 2(1) of the
CWMO or which do not constitute an offer to the public within the
meaning of the CWMO or an invitation to the public within the
meaning of the SFO or (3) otherwise pursuant to, and in accordance
with the conditions of, any other applicable provisions of the SFO
and CWMO.
Forward looking statements
This announcement (including information
incorporated by reference in this announcement), oral statements
made regarding the Merger, and other information published by
Barrick and Randgold contain statements which are, or may be deemed
to be, “forward-looking statements” (or “forward-looking
information”), under applicable securities laws including for the
purposes of the US Private Securities Litigation Reform Act of
1995. Forward-looking statements are prospective in nature and are
not based on historical facts, but rather on current expectations
and projections of the management of Barrick and Randgold about
future events, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the
future results expressed or implied by the forward-looking
statements. The forward-looking statements contained in this
announcement include statements relating to the expected effects of
the Merger on Barrick and Randgold, the expected timing and scope
of the Merger and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words, such as “plans”, “expects” or
“does not expect”, “is expected”, “is subject to”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or
“does not anticipate”, or “believes”, or variations of such words
and phrases or statements that certain actions, events or results
“may”, “could”, “should”, “would”, “might” or “will” be taken,
occur or be achieved. Although Barrick and Randgold believe that
the expectations reflected in such forward-looking statements are
reasonable, Barrick and Randgold can give no assurance that such
expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These
factors include the satisfaction of the Conditions and the ability
to consummate the Merger, as well as additional factors such as:
risks relating to the Barrick Group’s and the Randgold Group’s
credit rating; local and global political and economic conditions;
the Barrick Group’s and the Randgold Group’s economic model and
liquidity risks; fluctuations in the spot and forward price of
gold, copper, or certain other commodities (such as silver, diesel
fuel, natural gas, and electricity); financial services risk; the
risks associated with Barrick’s and Randgold’s brand, reputation
and trust; environmental risks; safety and technology risks; the
ability to realise the anticipated benefits of the Merger or
implementing the business plan for the New Barrick Group, including
as a result of a delay in completing the Merger or difficulty in
integrating the businesses of the companies involved (including the
retention of key employees); changes in or enforcement of national
and local government legislation, taxation, controls or regulations
and/or changes in the administration of laws, policies and
practices, expropriation or nationalization of property and
political or economic developments in Canada, the United States,
the Democratic Republic of Congo, Mali and other jurisdictions in
which the Barrick Group and Randgold Group carry on business or in
which the New Barrick Group may carry on business in the future;
lack of certainty with respect to foreign legal systems, corruption
and other factors that are inconsistent with the rule of law; legal
or regulatory developments and changes; the outcome of any
litigation, arbitration or other dispute proceeding; the impact of
any acquisitions or similar transactions; competition and market
risks; the impact of foreign exchange rates; pricing pressures; the
possibility that future exploration results will not be consistent
with expectations; risks that exploration data may be incomplete
and considerable additional work may be required to complete
further evaluation, including but not limited to drilling,
engineering and socioeconomic studies and investment; risk of loss
due to acts of war, terrorism, sabotage and civil disturbances;
contests over title to properties, particularly title to
undeveloped properties, or over access to water, power and other
required infrastructure; and business continuity and crisis
management. Other unknown or unpredictable factors could cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Neither
Barrick nor Randgold, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
will actually occur. You are cautioned not to place undue reliance
on these forward-looking statements. Other than in accordance with
their legal or regulatory obligations (including under the Listing
Rules and the Disclosure and Transparency Rules of the FCA),
neither Barrick nor Randgold is under any obligation, and Barrick
and Randgold expressly disclaim any intention or obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts or quantified
financial benefits statement
No statement in this announcement is intended as
a profit forecast, profit estimate or quantified financial benefits
statement.
Dealing disclosure
requirements
Under Rule 8.3(a) of the Code, any person who is
interested in 1% or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10th business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the
relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who
is, or becomes, interested in 1% or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details
of the dealing concerned and of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to
an agreement or understanding, whether formal or informal, to
acquire or control an interest in relevant securities of an offeree
company or a securities exchange offeror, they will be deemed to be
a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made
by the offeree company and by any offeror and Dealing Disclosures
must also be made by the offeree company, by any offeror and by any
persons acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in
respect of whose relevant securities Opening Position Disclosures
and Dealing Disclosures must be made can be found in the Disclosure
Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
The defined terms used in this section "Dealing
disclosure requirements" are defined in the Code which can be found
on the Takeover Panel's website.
Non-GAAP Financial Performance
Measures
Certain financial performance measures used in
this announcement – namely EBITDA, Adjusted EBITDA, Adjusted EBITDA
margin, cash costs per ounce, and total cash costs – are not
prescribed by IFRS. These non-GAAP financial performance measures
are included because management has used the information to analyze
the combined business performance and financial position of the New
Barrick Group. These non-GAAP financial measures are intended to
provide additional information only and do not have any
standardized meaning under IFRS and may not be comparable to
similar measures presented by other companies. These non-GAAP
financial measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
In order to provide the combined business
performance and financial position of the New Barrick Group,
certain non-GAAP financial performance measures of each of Barrick
and Randgold have been combined to show an aggregate number.
Where a component of the aggregated non-GAAP financial performance
measure has been previously reported by Barrick or Randgold we have
included in Appendix 5 to this announcement details regarding the
manner in which non-GAAP financial performance measures have been
aggregated for purposes of this announcement as well as
reconciliations to the most directly comparable GAAP measures as
reported by Barrick and Randgold, together with an explanation of
the rationale for including the non-GAAP measure.
In order to provide a relative comparison of the
New Barrick Group to its Senior Gold Peers, certain financial
comparisons between the New Barrick Group and its Senior Gold Peers
are made on the basis of data presented by either Factset, Wood
Mackenzie or Bloomberg which contain non-GAAP financial performance
measures. These non-GAAP financial performance measure comparisons
– namely “lowest total cash costs”, “highest Adjusted EBITDA
margin”, “highest return on capital” and “lowest gross debt to
Adjusted EBITDA ratio” are based solely on the data presented by
Factset, Wood Mackenzie or Bloomberg (as applicable) and are
intended to provide additional information only and do not have any
standardized meaning under IFRS. See “Third Party Data” below for
further information.
Third Party Data
Certain comparisons of the New Barrick Group to
its Senior Gold Peers (such as total cash cost, Adjusted EBITDA
margin, return on capital and gross debt to adjusted EBITDA ratio)
are based on data obtained from Wood Mackenzie, Factset and
Bloomberg as of 31 August 2018 (unless otherwise stated).
Wood Mackenzie is an independent third party research and
consultancy firm that provides data for, among others, the metals
and mining industry. Factset is a financial data and software
company which provides financial information and analytic software
for, among others, investment professionals. Bloomberg is a
software, data and media company which delivers business and market
news, data and analysis. Neither Wood Mackenzie, Factset nor
Bloomberg has any affiliation to Barrick or Randgold.
Where figures for the New Barrick Group are
compared to its Senior Gold Peers, the data from either Wood
Mackenzie, Factset or Bloomberg (as applicable) has been used to
ensure consistency in the compared measures across the New Barrick
Group and the comparator group. Neither Barrick nor Randgold
has the ability to verify the Wood Mackenzie, Factset or Bloomberg
figures and the non-GAAP financial performance measures used by
Wood Mackenzie, Factset and Bloomberg may not correspond to the
non-GAAP financial performance measures calculated by Barrick,
Randgold or any of the Senior Gold Peers.
Publication on Website
A copy of this announcement and the documents
required to be published by Rule 26 of the Code will be made
available (subject to certain restrictions relating to persons
resident in Restricted Jurisdictions) on Barrick’s website at
www.barrick.com and www.barrick.com/a-new-champion and Randgold’s
website at www.randgoldresources.com by no later than 12 noon
(London time) on the business day following the date of this
announcement in accordance with Rule 26.1(a) of the Code. The
content of the websites referred to in this announcement are not
incorporated into and do not form part of this announcement.
This announcement will also be available on
SEDAR under Randgold’s profile at www.sedar.com and on EDGAR under
Randgold’s profile at www.sec.gov.
In accordance with Rule 30.3 of the Code,
Barrick Shareholders and Randgold Shareholders may request a hard
copy of this announcement by contacting Computershare during
business hours at 03707074040 (from within Jersey or the UK) or +44
3707074040 (from outside Jersey or the UK) or by submitting a
request in writing to Computershare Investor Services PLC,
Corporate Actions Team, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZY. If you have received this announcement in electronic
form, copies of this announcement and any document or information
incorporated by reference into this document will not be provided
unless such a request is made.
Appendix 1 Conditions
and Certain Further Terms of the Scheme and the Merger
A. Conditions to the
Scheme and Merger
1. The Merger will be conditional upon the
Scheme becoming unconditional and becoming effective, subject to
the provisions of the Code, by no later than the Longstop Date.
Scheme approval
2. The Scheme will be conditional upon:
(a) approval of the Scheme at the Jersey Court
Meeting (or at any adjournment thereof, provided that the Jersey
Court Meeting may not be adjourned beyond the 22nd day after the
expected date of the Jersey Court Meeting to be set out in the
Scheme Document in due course or such later date (if any) as
Barrick and Randgold may agree and the Jersey Court may allow) by a
majority in number of the Scheme Shareholders present and voting,
either in person or by proxy, representing three-fourths (3/4ths)
or more of the voting rights of all Scheme Shares voted;
(b) all resolutions in connection with or
required to approve and implement the Scheme as set out in the
notice of the Extraordinary General Meeting (including, without
limitation, the Special Resolution) being duly passed by the
requisite majority at the Extraordinary General Meeting (or at any
adjournment thereof, provided that the Extraordinary General
Meeting may not be adjourned beyond the 22nd day after the expected
date of the Extraordinary General Meeting to be set out in the
Scheme Document in due course or such later date (if any) as
Barrick and Randgold may agree and the Jersey Court may allow);
and
(c) the sanction of the Scheme without
modification or with modification on terms acceptable to Barrick
and Randgold, provided that the Scheme Court Hearing may not be
adjourned beyond the 22nd day after the expected date of the Scheme
Court Hearing to be set out in the Scheme Document in due course or
such later date (if any) as Barrick and Randgold may agree and the
Jersey Court may allow) and the delivery of the Scheme Court Order
to the Registrar of Companies.
In addition, Barrick and Randgold have agreed
that the Merger will be conditional upon the following Conditions
and, accordingly, the necessary actions to make the Scheme
effective will not be taken unless such conditions (as amended, if
appropriate) have been satisfied or, where relevant, waived:
Barrick Shareholder
approval
3.
The Barrick Shareholder Resolution being duly passed by a simple
majority of the votes cast by Barrick Shareholders represented in
person or by proxy at the Barrick Special Meeting and such Barrick
Shareholder Resolution remaining valid.
New Barrick Share listings
4. In respect of the New Barrick Shares:
(a) confirmation having been received by Barrick
from the New York Stock Exchange that the New Barrick Shares have
been conditionally accepted for listing, subject to official notice
of issuance, on the New York Stock Exchange (and such acceptance
not having been withdrawn);
(b) confirmation having been received by Barrick
that the New Barrick Shares have been conditionally accepted for
listing, subject only to satisfaction of customary conditions of
the Toronto Stock Exchange, on the Toronto Stock Exchange (and such
acceptance not having been withdrawn); and
(c) in the event the Merger is implemented by
way of a Takeover Offer, absent an available exemption from the
registration requirements of the U.S. Securities Act, the
Registration Statement having been declared effective by the SEC
and no stop order having been issued or proceedings for suspension
of the effectiveness of the Registration Statement having been
initiated by the SEC.
Competition clearances
5. Without limitation to Condition 6 below, all
and any approvals for the Merger that may be required in terms of
the South African Competition Act are granted by the South African
Competition Authorities (being the South African Competition
Tribunal or the Competition Appeal Court, as the case may be) under
the South African Competition Act, no. 89 of 1998 (as amended), and
such approvals shall remain in force and not have been revoked.
General Third Party
clearances
6. All notifications to and filings with, Third
Parties which are necessary or are reasonably considered
appropriate or desirable by Barrick and Randgold having been made,
all applicable waiting and other time periods (including any
extensions of such waiting and other time periods) under any
applicable legislation or regulation of any relevant jurisdiction
having expired, lapsed or been terminated (as applicable) and all
statutory or regulatory obligations in any relevant jurisdiction
having been complied with in each case in connection with the
Scheme or Merger or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of,
Randgold or any other member of the Wider Randgold Group by any
member of the Wider Barrick Group, or the carrying on by any member
of the Wider Randgold Group of any material aspect of its
business.
7. No Third Party having given notice that it
has decided to, or that it is considering deciding to, take,
institute, assert, implement or threaten any demand, request,
action, proceeding, suit, investigation, enquiry or reference or
enacted, made or proposed any statute, regulation, decision or
order or having taken any other steps or required any action to be
taken or otherwise having done anything (including making or
asserting any demand, claim or request for any fee, tax, levy,
charge, impost or payment of any nature) which would or might
reasonably be expected to:
(a) make the Scheme or the Merger or, in each
case, its implementation or the acquisition or proposed acquisition
by Barrick or any member of the Wider Barrick Group of any shares
or other securities in, or control or management of, Randgold or
any member of the Wider Randgold Group void, illegal or
unenforceable in any jurisdiction, or otherwise directly or
indirectly restrain, prevent, prohibit, restrict or materially
delay the same or impose additional material conditions or
obligations with respect to the Scheme or the Merger or such
acquisition, or otherwise materially impede, challenge or interfere
with the Scheme or Merger or such acquisition, or require material
amendment to the terms of the Scheme or Merger or the acquisition
or proposed acquisition of any Randgold Shares or the acquisition
of control or management of Randgold or the Wider Randgold Group by
Barrick or any member of the Barrick Group;
(b) materially limit or delay, or impose any
limitations on, the ability of any member of the Wider Barrick
Group or any member of the Wider Randgold Group to acquire or to
hold or to exercise effectively, directly or indirectly, all or any
rights of ownership in respect of shares or other securities in, or
to exercise voting or management control over, any member of the
Wider Randgold Group or any member of the Wider Barrick Group;
(c) require, prevent, delay or impose
obligations or restrictions on any divestiture by any member of the
Wider Barrick Group of any shares or other securities in any member
of the Wider Randgold Group or otherwise adversely impact the
ownership by any member of the Wider Randgold Group of an asset
that is material to the Wider Randgold Group when as a whole;
(d) require, prevent, delay or impose
obligations or restrictions on any divestiture by any member of the
Wider Barrick Group or by any member of the Wider Randgold Group of
all or any portion of their respective businesses, assets or
properties or limit the ability of any of them to conduct any of
their respective businesses or to own or control any of their
respective assets or properties or any part thereof;
(e) except pursuant to Article 119, require any
member of the Wider Barrick Group or of the Wider Randgold Group to
acquire, or to offer to acquire, any shares or other securities (or
the equivalent) in any member of either group owned by any third
party;
(f) materially limit the ability of any member
of the Wider Barrick Group or of the Wider Randgold Group to
conduct or integrate or coordinate its business, or any part of it,
with the businesses or any part of the businesses of any other
member of the Wider Barrick Group or of the Wider Randgold
Group;
(g) result in any member of the Wider Randgold
Group or the Wider Barrick Group ceasing to be able to carry on
business under any name under which it presently does so;
(h) result in any payments (including any fee,
tax, levy, charge, impost or payment of any other nature) to a
Third Party by any member of the Wider Randgold Group or the Wider
Barrick Group, or any of their shareholders, which payments, in
aggregate, would be material to the Wider Barrick Group; or
(i) otherwise materially adversely affect any or
all of the business, assets, profits, financial or trading position
or prospects of any member of the Wider Randgold Group or of the
Wider Barrick Group,
and all applicable waiting and other time
periods during which any Third Party could decide to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or take any other step or
require any action to be taken or otherwise having done anything
under the laws of any relevant jurisdiction in respect of the
Merger having expired, lapsed or been terminated.
8. All Authorisations which are necessary or are
reasonably considered necessary or appropriate by Barrick in any
relevant jurisdiction for or in respect of the Scheme or Merger or
the acquisition or proposed acquisition of any shares or other
securities in, or control or management of, Randgold or any other
member of the Wider Randgold Group by any member of the Wider
Barrick Group or the carrying on by any member of the Wider
Randgold Group of its business having been obtained, in terms and
in a form satisfactory to Barrick, from all appropriate Third
Parties or from any persons or bodies with whom any member of the
Wider Randgold Group has entered into contractual arrangements and
all such Authorisations remaining in full force and effect and
there being no notice or intimation of any intention to revoke,
suspend, restrict, modify or not to renew any of the same.
Certain matters arising as a result of
any arrangement, agreement etc.
9. Except as Disclosed, there being no provision
of any arrangement, agreement, licence, permit, franchise or other
instrument to which any member of the Wider Randgold Group or the
Wider Barrick Group is a party, or by or to which any such member
or any of its assets is or are or may be bound, entitled or subject
or any circumstance, which, in each case as a consequence of the
Scheme or Merger or the acquisition or proposed acquisition of any
shares or other securities in, or control of, Randgold or any other
member of the Wider Randgold Group by any member of the Wider
Barrick Group or otherwise, would reasonably be expected to result
in (in each case to an extent which would reasonably be expected to
be material and adverse in the context of the Wider Randgold Group
or the Wider Barrick Group, in each case, taken as a whole):
(a) any monies borrowed by or any other
indebtedness or liabilities (actual or contingent) of, or any grant
available to, any member of the Wider Randgold Group or the Wider
Barrick Group being or becoming repayable or capable of being
declared repayable immediately or prior to its stated maturity date
or repayment date or the ability of any member of the Wider
Randgold Group or the Wider Barrick Group to borrow monies or incur
any indebtedness being withdrawn or inhibited or becoming capable
of being withdrawn or inhibited;
(b) the creation or enforcement of any mortgage,
charge or other security interest over the whole or any part of the
business, property, assets or interests of any member of the Wider
Randgold Group or the Wider Barrick Group or any such mortgage,
charge or other security interest (wherever created, arising or
having arisen) becoming enforceable;
(c) any such arrangement, agreement, licence,
permit, franchise or instrument, or the rights, liabilities,
obligations or interests of any member of the Wider Randgold Group
or the Wider Barrick Group thereunder, being, or becoming capable
of being, terminated or adversely modified or affected or any
adverse action being taken or any obligation or liability arising
thereunder;
(d) any asset or interest of any member of the
Wider Randgold Group or the Wider Barrick Group being or falling to
be disposed of or charged or ceasing to be available to any member
of the Wider Randgold Group or the Wider Barrick Group or any right
arising under which any such asset or interest could be required to
be disposed of or could cease to be available to any member of the
Wider Randgold Group or the Wider Barrick Group otherwise than in
the ordinary course of business;
(e) any member of the Wider Randgold Group or
the Wider Barrick Group ceasing to be able to carry on business
under any name under which it presently does so;
(f) the creation of liabilities (actual or
contingent) by any member of the Wider Randgold Group or the Wider
Barrick Group other than in the ordinary course of business;
(g) the rights, liabilities, obligations or
interests of any member of the Wider Randgold Group or the Wider
Barrick Group under any such arrangement, agreement, licence,
permit, franchise or other instrument or the interests or business
of any such member in or with any other person, firm, company or
body (or any arrangement or arrangements relating to any such
interests or business) being terminated or adversely modified or
affected; or
(h) the financial or trading position or the
value of any member of the Wider Randgold Group or the Wider
Barrick Group being prejudiced or adversely affected,
and no event having occurred since 31 December
2017 which, under any provision of any such arrangement, agreement,
licence, permit or other instrument, would reasonably be expected
to result in any of the events or circumstances which are referred
to in paragraphs (a) to (h) of this Condition
9.
10. Since 31 December 2017 and except as
Disclosed and except as between any of Randgold and its wholly
owned subsidiaries, or as between any of Barrick and its wholly
owned subsidiaries, no member of the Wider Randgold Group or Wider
Barrick Group having (in any case to an extent which is or would be
material in the context of the Wider Randgold Group or Wider
Barrick Group, in each case, taken as a whole):
(a) issued or agreed to issue, or authorised the
issue of, additional shares of any class, or securities convertible
into or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible securities
or transferred or sold any shares out of treasury, other than any
shares issued or shares transferred from treasury upon the exercise
of any options granted under any of the Randgold Share Plans or
Barrick Share Plans;
(b) purchased or redeemed or repaid any of its
own shares or other securities or reduced or made any other change
to any part of its share capital;
(c) except as contemplated by the Cooperation
Agreement or in this Announcement, recommended, declared, paid or
made any dividend or other distribution whether payable in cash or
otherwise (except for dividends or other distributions lawfully
made or paid out in the ordinary course of business to shareholders
as required under joint venture arrangements) or made any bonus
issue;
(d) made or authorised any change in its loan
capital;
(e) (other than any acquisition or disposal in
the ordinary course of business) merged with, demerged or acquired
any body corporate, partnership or business or acquired or disposed
of or transferred, mortgaged, charged or created any security
interest over any assets or any right, title or interest in any
assets (including shares in any undertaking and trade investments)
or authorised the same;
(f) issued or authorised the issue of, or made
any change in or to, any debentures or incurred or increased any
indebtedness or liability (actual or contingent);
(g) entered into, varied, or authorised any
agreement, transaction, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which:
(i) is of a long term, onerous or unusual nature
or magnitude or which could involve an obligation of such nature or
magnitude; or
(ii) could restrict the business of any member
of the Wider Randgold Group or the Wider Barrick Group; or
(iii) is other than in the ordinary course of
business;
(h) entered into, implemented, effected or
authorised any merger, demerger, reconstruction, amalgamation,
scheme, commitment or other transaction or arrangement in respect
of itself or another member of the Wider Randgold Group or the
Wider Barrick Group;
(i) entered into or varied the terms of, any
contract, agreement or arrangement with any of the directors or
senior executives of any member of the Wider Randgold Group or the
Wider Barrick Group;
(j) taken any corporate action or had any legal
proceedings instituted or threatened against it or petition
presented or order made for its winding up (voluntarily or
otherwise), dissolution or reorganisation or for the appointment of
a receiver, administrator, administrative receiver, trustee or
similar officer of all or any material part of its assets and
revenues or any analogous proceedings in any jurisdiction or
appointed any analogous person in any jurisdiction;
(k) been unable, or admitted in writing that it
is unable, to pay its debts or having stopped or suspended (or
threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part
of its business;
(l) waived or compromised any claim, otherwise
than in the ordinary course of business;
(m) except for the Continuance, made any
alteration to its memorandum or articles of association;
(n) made or agreed or consented to:
(i) any change:
(A) to the terms of the trust deeds constituting
the pension scheme(s) established for its directors, employees or
their dependants; or
(B) the contributions payable to any such
scheme(s) or to the benefits which accrue or to the pensions which
are payable thereunder; or
(C) the basis on which qualification for, or
accrual or entitlement to such benefits or pensions are calculated
or determined; or
(D) the basis upon which the liabilities
(including pensions) or such pension schemes are funded, valued or
made, or
(ii) any change to the trustees including the
appointment of a trust corporation;
(o) proposed, agreed to provide or modified the
terms of any share option scheme, incentive scheme or other benefit
relating to the employment or termination of employment of any
person employed by the Wider Randgold Group; or
(p) entered into any agreement, commitment or
arrangement or passed any resolution or made any offer (which
remains open for acceptance) or proposed or announced any intention
with respect to any of the transactions, matters or events referred
to in this Condition 10.
No adverse change, litigation or
regulatory enquiry
11. Since 31 December 2017 and except as
Disclosed (in any case to an extent which is or would be material
in the context of the Wider Randgold Group or Wider Barrick Group,
in each case, taken as a whole):
(a) there having been no adverse change or
deterioration in the business, assets, financial or trading
positions or profit or prospects of any member of the Wider
Randgold Group or Wider Barrick Group;
(b) no contingent or other liability of any
member of the Wider Randgold Group or Wider Barrick Group having
arisen or become apparent or increased;
(c) no litigation, arbitration proceedings,
prosecution or other legal proceedings to which any member of the
Wider Randgold Group or Wider Barrick Group is or may become a
party (whether as plaintiff, defendant or otherwise) having been
threatened, announced, implemented or instituted by or against or
remaining outstanding against or in respect of any member of the
Wider Randgold Group or Wider Barrick Group;
(d) (other than as a result of or in connection
with the Merger) no enquiry or investigation by, or complaint or
reference to, any Third Party having been threatened, announced,
implemented, instituted by or against or remaining outstanding
against or in respect of any member of the Wider Randgold Group or
Wider Barrick Group;
(e) other than with the consent of Barrick, no
action having been taken or proposed by any member of the Wider
Randgold Group, or having been approved by Randgold Shareholders or
consented to by the Panel, which falls or would fall within or
under Rule 21.1 of the Code or which otherwise is or would be
materially inconsistent with the implementation by Barrick of the
Merger on the basis contemplated as at the date of this
announcement; and
(f) no member of the Wider Randgold Group or
Wider Barrick Group having conducted its business in breach of any
applicable laws and regulations.
No discovery of certain
matters
12. Barrick not having discovered in relation to
the Wider Randgold Group and Randgold not having discovered in
relation to the Wider Barrick Group:
(a) that any financial or business or other
information concerning the Wider Randgold Group or the Wider
Barrick Group, as applicable disclosed at any time by or on behalf
of any member of the Wider Randgold Group, whether publicly, to any
member of the Wider Barrick Group or by or on behalf of any member
of the Wider Barrick Group to any member of the Wider Randgold
Group, or to any of their advisers or otherwise, is misleading or
contains any misrepresentation of fact or omits to state a fact
necessary to make any information contained therein not misleading
and which was not subsequently corrected before the Announcement
Date by disclosure either publicly or otherwise to Barrick or
Randgold, as applicable (in any case to an extent which is or would
be material in the context of the Wider Randgold Group or the Wider
Barrick Group, in each case, taken as a whole);
(b) except as Disclosed, that any member of the
Wider Randgold Group or the Wider Barrick Group is subject to any
liability (actual or contingent); or
(c) any information which affects the import of
any information disclosed at any time by or on behalf of any member
of the Wider Randgold Group or of the Wider Barrick Group (in any
case to an extent which is or would be material in the context of
the Wider Randgold Group or the Wider Barrick Group, in each case,
taken as a whole).
13. Other than to the extent fairly disclosed in
writing to the other party before the Announcement Date, Barrick
not having discovered in relation to the Wider Randgold Group and
Randgold not having discovered in relation to the Wider Barrick
Group:
(a) that any past or present member of the Wider
Randgold Group or Wider Barrick Group has not complied in all
material respects with any applicable legislation or regulations of
any jurisdiction with regard to the use, treatment, handling,
storage, transport, release, disposal, discharge, spillage, leak or
emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health, or otherwise
relating to environmental matters or the health and safety of any
person, or that there has otherwise been any such use, treatment,
handling, storage, transport, release, disposal, discharge,
spillage, leak or emission (whether or not this constituted a
non‑compliance by any person with any legislation or regulations
and wherever the same may have taken place) which, in any case,
would be likely to give rise to any material liability (whether
actual or contingent) or cost on the part of any member of the
Wider Randgold Group or Wider Barrick Group;
(b) that there is, or is likely to be, any
material liability, whether actual or contingent, to make good,
repair, reinstate or clean up any property now or previously owned,
occupied or made use of by any past or present member of the Wider
Randgold Group or Wider Barrick Group or any other property or any
controlled waters under any environmental legislation, regulation,
notice, circular, order or other lawful requirement of any relevant
authority or third party or otherwise; or
(c) that circumstances exist whereby a person or
class of persons would be likely to have a claim in respect of any
product or process of manufacture or materials used therein now or
previously manufactured, sold or carried out by any past or present
member of the Wider Randgold Group or of the Wider Barrick Group
(in any case to an extent which is or would be material in the
context of the Wider Randgold Group or Wider Barrick Group, in each
case, taken as a whole).
Anti-corruption, sanctions and criminal
property
14. Barrick not having discovered in relation to
the Wider Randgold Group and Randgold not having discovered in
relation to the Wider Barrick Group that, or it not otherwise
having been determined that:
(a) any past or present member, director,
officer or employee of the Wider Randgold Group or the Wider
Barrick Group is or has at any time engaged in any activity,
practice or conduct (including inaction or a failure to engage in
conduct, and including engaging in any activity, practice or
conduct through an agent performing services on behalf of such
person) which constitutes an offence or a breach of obligations
under the Bribery Act 2010, the US Foreign Corrupt Practices Act of
1977, as amended, or any other anti-corruption legislation
applicable to the Wider Randgold Group or Wider Barrick Group;
(b) any asset of any member of the Wider
Randgold Group or the Wider Barrick Group constitutes criminal
property as defined by section 340(3) of the Proceeds of Crime Act
2002, as amended (but disregarding paragraph (b) of that
definition) or is deemed to be the proceeds of crime under any
applicable legislation;
(c) any past or present member, director,
officer or employee of the Wider Randgold Group or the Wider
Barrick Group, or any other person for whom any such person may be
liable or responsible (in each case including through an agent
performing services on behalf of such person), has engaged in any
business with, made any investments in, facilitated any other party
in their business with, supplied or received any goods, technical
data or services to or from, made any funds or assets available to
or received any funds or assets from: (i) any government,
entity, organization, or individual in respect of which US or
European Union persons, or persons operating in those territories,
are prohibited from engaging in activities or doing business, or
from receiving or making available funds or economic resources, by
US or European Union laws or regulations including the economic
sanctions administered by the United States Office of Foreign
Assets Control, the United States Department of State, or HM
Treasury & Customs; or (ii) any government, entity,
organization, or individual designated either directly or
indirectly (by virtue of ownership, control or other factors) or
targeted by any of the economic sanctions of the United Nations,
the United States, the European Union or any of its member
states;
(d) a member of the Randgold Group or the
Barrick Group has engaged in any activity or transaction which
would cause Barrick or Randgold to be in breach of any law or
regulation or otherwise subject it to restrictions, penalties or
sanctions upon Barrick’s acquisition of Randgold including the
economic sanctions of the United States Office of Foreign Assets
Control, the United States Department of State, HM Treasury
& Customs, or any government entity, organization, or
individual designated or targeted by any of the economic sanctions
of the United Nations, the United States, the European Union or any
of its member states, or the requirements of the United States
Securities and Exchange Commission; or
(e) without limitation to Conditions 14(c)
or 14(d) above, any member of the Wider Randgold Group or the
Wider Barrick Group has received a notice from any government
authority of an inquiry, investigation or regulatory proceeding,
proposed cancellation, revocation, or avoidance of any license,
permit, or authorization applicable to any asset, intention to
impose a penalty, forfeiture or other sanction or been named in a
civil action brought by a government authority or any private party
(including a derivative shareholder action) related to a potential
violation of the Bribery Act 2010, the US Foreign Corrupt Practices
Act of 1977, as amended, or any other anti-corruption legislation
applicable to the Wider Randgold Group or the Wider Barrick Group,
or any applicable economic sanctions or anti-money laundering
legislation.
B. Waiver and
invocation of the Conditions
1. The Scheme will not become effective, and
will lapse, unless the Conditions have been fulfilled or (to the
extent capable of waiver) waived or, where appropriate, have been
determined to be or remain satisfied by no later than the Longstop
Date.
2. Subject to the requirements of the Panel,
Barrick reserves the right in its sole discretion to waive:
(a) those parts of all or any of the Conditions
set out in paragraph 2 of Part A of this Appendix
1 relating to the deadlines for the Jersey Court Meeting,
Extraordinary General Meeting and/or the Scheme Court Hearing. If
any such deadline is not met, Barrick shall make an announcement by
8.00 a.m. on the business day following such deadline confirming
whether it has invoked the relevant Condition, waived the relevant
deadline or agreed with Randgold to extend the relevant deadline;
and
(b) all or any of Conditions 5, 6 and 8 and (so
far as they relate to Randgold, the Wider Randgold Group or any
part thereof) all or any of Conditions 7 and 9 to 14 (inclusive),
in each case, in whole or in part, in Part A of this
Appendix 1.
3. Randgold reserves the right in its sole
discretion to waive (so far as they relate to Barrick, the Wider
Barrick Group or any part thereof) in whole or in part, all or any
of Conditions 7 and 9 to 14 (inclusive) in Part
A of this Appendix 1. This right:
(a) is subject to the requirements of the
Panel; and
(b) shall cease to have any effect if a Randgold
Board Adverse Recommendation Change occurs, in which case Randgold
shall no longer have the right to waive any of Conditions 7
and 9 to 14 (inclusive) in Part A of this
Appendix 1, whether in whole or in part and, instead, Barrick
shall have the right in its sole discretion to waive any of such
Conditions in whole or in part including (without limitation) if
they relate to Barrick, the Wider Barrick Group or any part
thereof.
4. Save as set out above in respect of
paragraphs 2 and 3, the Conditions set out in
paragraphs 1 to 4 (inclusive) in Part A of this
Appendix 1 cannot be waived.
5. Neither Barrick nor Randgold shall be under
any obligation to waive (if capable of waiver), to determine to be
or remain satisfied or to treat as fulfilled any of the Conditions
in Part A above (insofar as they apply to each of them) by a
date earlier than the latest date specified above for the
fulfilment of that condition, notwithstanding that the other
Conditions may at such earlier date have been waived or fulfilled
and that there are, at such earlier date, no circumstances
indicating that any Condition may not be capable of fulfilment.
6. The Merger shall lapse if:
(a) in so far as the Merger or any matter
arising from or relating to the Scheme or Merger constitutes a
concentration with a Community dimension within the scope of the
Regulation, the European Commission either initiates proceedings
under Article 6(1)(c) of the Regulation or makes a referral to a
competent authority in the United Kingdom under Article 9(1) of the
Regulation and there is then a CMA Phase 2 Reference; or
(b) the Merger or any matter arising from or
relating to the Scheme or Merger becomes subject to a CMA Phase 2
Reference,
in each case before the date of the Jersey Court
Meeting.
7. Under Rule 13.5 of the Code, Barrick may not
invoke a Condition so as to cause the Merger not to proceed, to
lapse or be withdrawn, unless the circumstances which give rise to
the right to invoke the Condition are of material significance to
Barrick in the context of the Merger. Conditions 1, 2,
3 and 4 in Part A of this Appendix 1 are not
subject to this provision of the Code.
8. Randgold may not invoke a Condition so
as to cause the Merger not to proceed, to lapse or be
withdrawn:
(a) under Rule 13.6 of the Code, unless the
circumstances which give rise to the right to invoke the Condition
are of material significance to Randgold Shareholders in the
context of the Merger. Conditions 1, 2, 3 and 4
in Part A of this Appendix 1 are not subject to this
provision of the Code; or
(b) following a Randgold Board Adverse
Recommendation Change.
9. If the Panel requires Barrick to make an
offer or offers for any Randgold Shares under the provisions of
Rule 9 of the Code, Barrick may make such alterations to the
Conditions as are necessary to comply with the provisions of that
Rule.
10. Each of the Conditions shall be regarded as
a separate Condition and shall not be limited by reference to any
other Condition.
11. The Scheme will be governed by Jersey law
and will be subject to the jurisdiction of the Jersey courts and to
the conditions and further terms set out in this announcement and
in the Scheme Document. The Merger and the Scheme will be subject
to the applicable requirements of the London Stock Exchange, the
FCA, the Code, the Toronto Stock Exchange, the NYSE, NASDAQ and
applicable securities laws in Canada and the United States.
C. Implementation
by way of Takeover Offer
Barrick reserves the right to elect in
accordance with the Cooperation Agreement to implement the Merger
by way of a Takeover Offer for the entire issued and to be issued
share capital of Randgold not already held by Barrick as an
alternative to the Scheme. In such an event, the Takeover Offer
will be implemented on the same terms (subject to appropriate
amendments), so far as applicable and subject to the terms of the
Cooperation Agreement, as those which would apply to the Scheme,
with such appropriate amendments including (without limitation) an
Acceptance Condition set at 90 per cent. or such other percentage
(being more than 50 per cent.) as the parties may agree in writing
(or, in circumstances where (a) a Randgold Board Adverse
Recommendation Change occurs, (b) a Competing Proposal for Randgold
is recommended in whole or in part by the Randgold Directors or (c)
Randgold announces its intention to proceed with a Competing
Proposal for Randgold, as Barrick may decide (in each case subject
to the Panel’s consent to the extent necessary)) in nominal
value of the shares to which such Takeover Offer relates.
D. Certain
further terms of the Merger
Fractions of New Barrick Shares will not be
issued to Randgold Shareholders. Instead, Randgold Shareholders who
otherwise would have received a fraction of a New Barrick Share
will instead receive an amount in cash rounded to the nearest cent,
based on the amount obtained by multiplying such fraction by the
average Closing Price of Barrick Shares on the NYSE on each of the
five consecutive trading days ending on the trading day that is two
trading days prior to the Effective Date, except that individual
entitlements of less than USD 5.00 will not be paid but will be
retained for the benefit of the New Barrick Group.
Randgold Shares will be acquired by Barrick
fully paid and free from all liens, equitable interests, charges,
encumbrances, rights of pre-emption and other third party rights of
any nature whatsoever and together with all rights attaching to
them as at the date of this announcement or subsequently attaching
or accruing to them, including the right to receive and retain, in
full, all dividends and other distributions (if any) declared,
made, paid or payable, or any other return of capital made, on or
after the date of this announcement, other than any Randgold
Equalisation Dividend and the Randgold Permitted Dividend.
If, on or after the date of this announcement,
any dividend and/or other distribution and/or other return of
capital (other than any Randgold Equalisation Dividend and the
Randgold Permitted Dividend) is declared, made or paid or becomes
payable in respect of the Randgold Shares, with a record date
before the Scheme Record Time, Barrick reserves the right (without
prejudice to any right of Barrick to invoke Condition 10(c) of Part
A of this Appendix 1), to adjust the Exchange Ratio by reference to
the amount of such dividend and/or distribution and/or return of
capital, in which case any reference in this announcement or in the
Scheme Document to the consideration payable under the terms of the
Merger will be deemed to be a reference to the consideration as so
adjusted. To the extent that any such dividend and/or distribution
and/or other return of capital is declared, made or paid or is
payable and it is: (i) transferred pursuant to the Merger on a
basis which entitles Barrick to receive the dividend, distribution
or return of capital and to retain it; or (ii) cancelled, the
Exchange Ratio will not be subject to adjustment in accordance with
this paragraph. Any exercise by Barrick of its rights referred to
in this paragraph shall be the subject of an announcement and, for
the avoidance of doubt, shall not be regarded as constituting any
revision or variation of the Merger.
If after the date of this announcement, any
Non-Permitted Barrick Dividend is declared, made or paid or becomes
payable in respect of the Barrick Shares with a record date on or
before the Effective Date, then Randgold reserves the right (in
addition to the Randgold Permitted Dividend) to declare and pay,
and the Randgold Shareholders will be entitled to receive and
retain, prior to the Scheme Record Time a the Randgold Equalisation
Dividend in respect of the Randgold Shares of an amount per
Randgold Share equal to the amount of the Non-Permitted Barrick
Dividend per Barrick Share multiplied by the Exchange Ratio (as may
be reduced by Barrick as a result of any Randgold Return of
Capital). Any exercise by Randgold of its rights referred to in
this paragraph shall be the subject of an announcement and, for the
avoidance of doubt, shall not be regarded as constituting any
revision or variation of the Merger.
The Merger will be subject, inter alia, to the
Conditions and certain further terms which are set out in this
Appendix 1 and those terms which will be set out in the Scheme
Document.
The availability of the Merger to persons not
resident in Canada, the United States, the United Kingdom or Jersey
may be affected by the laws of the relevant jurisdiction. Any
persons who are subject to the laws of any jurisdiction other than
Canada, the United States, the United Kingdom or Jersey should
inform themselves about and observe any applicable requirements.
Further information in relation to Overseas Shareholders will be
contained in the Scheme Document.
Bases and
SourcesAppendix
2
- All references to Randgold Shares are to Randgold ordinary
shares of USD 0.05 each. All references to Barrick Shares are to
Barrick common shares with no par value.
- The percentage of the common shares of the New Barrick Group
that will be owned by Randgold Shareholders on a fully diluted
basis is calculated by dividing the number of the New Barrick
Shares to be issued under the terms of the Merger (as referred to
in paragraph (e)(ii) below) by the common shares of the
New Barrick Group (as referred to in paragraph (e)
below) and multiplying the resulting sum by 100 to produce a
percentage.
- Randgold’s issued ordinary share capital refers to the
94,475,346 Randgold Shares in issue as at 5.00 p.m. on 21 September
2018.
- Randgold’s fully diluted ordinary share capital is 95,726,057
Randgold Shares which has been calculated on the basis of:
- the number of Randgold Shares in issue; and
- the maximum number of further Randgold Shares which may be
issued on or after the date of this announcement on the exercise of
options or vesting of awards under the Randgold Share Plans.
- The common shares of the New Barrick Group has been calculated
as the sum of:
- a total number of 1,167,641,525 Barrick Shares in issue on a
fully diluted basis as at 21 September 2018 as calculated using the
treasury stock method; and
- 586,609,277 New Barrick Shares which would be issued under the
terms of the Merger based on the fully diluted ordinary share
capital of Randgold.
- The volume-weighted average price of a Barrick Share is derived
from data provided by Bloomberg and refers to trading on the New
York Stock Exchange; the volume-weighted average price of a
Randgold ADS is derived from data provided by Bloomberg and refers
to trading on NASDAQ.
- For the purposes of the financial comparisons contained in this
announcement, no account has been taken of any liability to
taxation or the treatment of fractions under the Merger.
- Unless otherwise stated, the financial information on Barrick
is extracted (without material adjustment) from Barrick’s Annual
Report, financial statements and MD&A for the financial year
ended 31 December 2017 and from the announcement of Barrick’s
interim results for the six months ended 30 June 2018.
- Unless otherwise stated, the financial information on Randgold
is extracted (without material adjustment) from Randgold’s Annual
Report and Accounts for the financial year ended 31 December 2017
and from the announcement of Randgold’s interim results for the six
months ended 30 June 2018.
- The market prices of the Randgold Shares are the last reported
sale price in US dollars of a Randgold ADS as quoted on
NASDAQ.
- The market prices of the Barrick Shares are the last reported
sale price in US dollars of a Barrick Share as quoted on the
NYSE.
- The financial comparisons between the New Barrick Group and the
Senior Peer Group relating to total cash costs1 are derived from
data provided by Wood Mackenzie and include C1 cash costs,
royalties and other indirect costs.
- Return on capital6 is calculated as net earnings before
interest divided by average invested capital which consists of
total debt plus total equity less cash and cash equivalents using
data provided by Bloomberg as at 31 December 2017.
- The Tier One Gold Assets have been identified using Wood
Mackenzie’s global list of gold assets and applying the data
requirements set out in the definition for Tier One Gold Assets in
Appendix 4 to determine which of such gold assets satisfy the
definition.
- Where any financial metrics have been presented on a combined
or aggregate basis, such metrics do not include any pro forma
adjustments.
Appendix 3 Details of
Irrevocable Undertakings and Voting and Support
Agreements
The following directors of Randgold have given
irrevocable undertakings to vote in favour of the Scheme at the
Jersey Court Meeting and the resolutions to be proposed at the
Extraordinary General Meeting in relation to the following Randgold
Shares:
Name |
Number of Randgold Shares |
Percentage of issued ordinary share capital of
Randgold |
Mark Bristow
|
839,034 |
0.889 |
% |
Graham Shuttleworth
|
102,040 |
0.108 |
% |
Christopher Coleman
|
19,800 |
0.021 |
% |
Andrew Quinn
|
11,828 |
0.013 |
% |
Safaitou Ba-N'Daw
|
6,159 |
0.007 |
% |
Jemal-ud-din Kassum
|
7,200 |
0.008 |
% |
Olivia Kirtley
|
3,000 |
0.003 |
% |
Jeanine Mabunda Lioko
|
8,635 |
0.009 |
% |
The following directors of Barrick have entered
into voting and support agreements to vote in favour of the Barrick
Shareholder Resolution and the Continuance at the Barrick Special
Meeting in relation to the following Barrick Shares:
Name |
Number of Barrick Shares |
Percentage of existing Barrick Shares |
María Ignacia Benítez
|
0 |
0.000 |
% |
Gustavo Cisneros
|
11,000 |
0.001 |
% |
Graham G. Clow
|
19,138 |
0.002 |
% |
J. Michael Evans
|
0 |
0.000 |
% |
Brian L. Greenspun
|
31,185 |
0.003 |
% |
J. Brett Harvey
|
29,175 |
0.002 |
% |
Patricia Ann Hatter
|
1,864 |
0.000 |
% |
Pablo Marcet
|
8,500 |
0.001 |
% |
Anthony Munk
|
55,000 |
0.005 |
% |
J. Robert S.
Prichard |
30,000 |
0.003 |
% |
Steven J. Shapiro
|
30,000 |
0.003 |
% |
John L. Thornton
|
2,514,760 |
0.215 |
% |
Ernie L. Thrasher
|
50,000 |
0.004 |
% |
Appendix 4
Definitions
The following definitions apply throughout this
announcement unless the context requires otherwise.
“$”, “USD”, “US Dollars”
or “cent” |
the lawful currency of
the US |
“£”, “Sterling”, “pence”
or “p” |
the
lawful currency of the UK |
“Acacia” |
Acacia
Mining plc, a public limited company incorporated under the laws of
England and Wales with registered number 07123187, whose registered
office is at 5th Floor, 1 Cavendish Place, London, W1G 0QF |
“Acceptance
Condition” |
means
the acceptance condition to any Takeover Offer |
“Acknowledgment” |
means the undertaking and
acknowledgment to be delivered by Shandong Gold to Barrick in
connection with the Strategic Investment Agreement |
“Adjusted EBITDA” |
earnings
before interest, tax, depreciation and amortization as adjusted for
earnings and costs for each of Barrick and Randgold and calculated
as set out in Appendix 5 |
“Adjusted EBITDA
margin” |
for a
defined period is a percentage equal to Adjusted EBITDA for such
defined period divided by total reported revenue for the same
defined period |
“Agreed Switch” |
has the
meaning given to it in clause 9.1(a) of the Cooperation
Agreement |
“Announcement Date” |
24
September 2018, being the date of release of this announcement |
“Authorisations” |
authorisations, orders, grants, recognitions, confirmations,
consents, licences, clearances, certificates, permissions or
approvals |
“Australian Corporations
Act” |
the
Corporations Act 2001 (Cth) |
“Barclays” |
Barclays
Bank PLC, acting through its Investment Bank |
“Barrick” |
Barrick
Gold Corporation |
“Barrick Board Adverse
Recommendation Change” |
the
Board of Barrick:
- withdrawing (or modifying in any manner adverse to Randgold),
or proposing publicly to withdraw (or modify in any manner adverse
to Randgold), the Barrick Recommendation;
- adopting, approving, recommending or declaring advisable, or
proposing publicly to adopt, approve, recommend or declare
advisable, any Competing Proposal for Barrick;
- failing to include the Barrick Recommendation in this
announcement or the Barrick Information Circular; or
- entering into an acquisition agreement in certain circumstances
specified in the Cooperation Agreement
|
“Barrick Group” |
Barrick
and its subsidiary undertakings |
“Barrick Information
Circular” |
any
circular (including all schedules, appendices and exhibits thereto)
to be sent by Barrick to Barrick Shareholders in connection with
the Barrick Special Meeting, including any amendments or
supplements thereto |
“Barrick Permitted
Dividends” |
Barrick
quarterly dividends of: (i) up to USD 0.03 per Barrick Share for
the three month period ending 30 September 2018; and (ii) up to USD
0.05 per Barrick Share (with a record date prior to the Effective
Date) for the three month period ending 31 December 2018, in each
case if, as and when declared by the Board of Barrick |
“Barrick
Recommendation” |
means an unqualified
recommendation by the Barrick Board to the Barrick Shareholders to
vote in favour of the Barrick Shareholder Resolution |
“Barrick Share Plans” |
means
the Barrick Restricted Share Unit Plan, the Barrick Deferred Share
Unit Plan, the Barrick Performance Granted Share Unit Plan, the
Barrick Global Employee Share Plan, the Barrick Share Purchase
Plan, the Barrick Stock Option Plan (2004) and the Barrick Amended
and Restated Stock Option Plan |
“Barrick Shareholder
Resolution” |
the
shareholder resolution of the Barrick Shareholders approving, by
simple majority of the Barrick Shares voted at the Barrick
Shareholder Meeting, the issuance of the New Barrick Shares in
accordance with the requirements of the Toronto Stock Exchange |
“Barrick
Shareholders” |
the
holders of Barrick Shares from time to time |
“Barrick Shares” |
the
common shares in the capital of Barrick |
“Barrick Special
Meeting” |
the
special meeting, including any adjournments or postponements
thereof, of the Barrick Shareholders to be held to consider and, if
thought advisable, approve the Barrick Shareholder Resolution and
the special resolution approving the Continuance and any other
business which may properly come before the meeting |
“Barrick Superior
Proposal” |
any
unsolicited bona fide written Competing Proposal for Barrick that
has not been withdrawn and that: (a) did not result from a
breach by Barrick or any of its representatives of any provision of
clauses 8.1 through 8.4 (inclusive) of the Cooperation Agreement;
(b) is made by a third party or group pursuant to which such
third party (or in a merger or consolidation involving such party,
the stockholders of such third party) or group would acquire,
directly or indirectly, by means of a merger, take-over bid,
amalgamation, plan of arrangement, business combination,
consolidation, liquidation, winding-up or similar transaction, 100%
of the Barrick Shares or all or substantially all of the assets of
the Barrick Group; (c) complies with Law; (d) is not
subject to any financing contingency and in respect of which the
Board of Barrick has concluded, in good faith (after receiving the
advice of its legal and financial adviser(s)), that adequate
arrangements have been made to ensure that the required funds or
other consideration will be available to effect payment in full;
(e) is not subject to any due diligence and/or access
condition; (f) in respect of which the Board of Barrick
determines in good faith, after receiving the advice of its legal
counsel and its financial adviser(s) that: (A) failure to
recommend such Competing Proposal for Barrick to the Barrick
Shareholders would be inconsistent with its fiduciary duties under
Law; and (B) such Competing Proposal for Barrick is on terms
more favourable from a financial point of view to the Barrick
Shareholders than the Merger, taking into account all the material
terms and conditions of (x) such offer (including the material
legal, financial and regulatory aspects of the proposal and any
potential delay associated therewith) and (y) the Cooperation
Agreement (including any changes proposed by Randgold to the terms
of the Cooperation Agreement), and also taking into account the
expected benefits and any synergies arising from the Merger; and
(g) is otherwise reasonably capable of being consummated on
the terms proposed, taking into account all material legal,
financial, regulatory and other aspects of such proposal, including
conditionality |
“Board” |
board of
directors |
“business day” |
means a day other than a
Saturday or Sunday or public holiday in England and Wales, Jersey,
Canada or the United States on which banks in London, St. Helier,
Toronto and New York are open for general commercial business
|
“Canadian Holders” |
Holders
of Randgold Shares in Canada, resident in Canada or with a
registered address in Canada, and any custodian, nominee or trustee
holding Randgold Shares for persons in Canada or with a registered
address in Canada |
“Canadian Randgold ADS
Holders” |
Holders
of Randgold ADSs from time to time in Canada |
“CIBC” |
Canadian
Imperial Bank of Commerce, London Branch |
“Closing Price” |
in
respect of Randgold, the last reported sale price in US dollars of
a Randgold ADS as quoted on NASDAQ, and in respect of Barrick, the
last reported sale price in US dollars of a Barrick Share as quoted
on NYSE |
“Code” |
means
the City Code on Takeovers and Mergers, as issued from time to time
by or on behalf of the Panel |
“COMESA” |
means
the Common Market for Eastern and Southern Africa, which includes
the following member states: Burundi, the Comoros, the
Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia,
Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Somalia,
Sudan, Swaziland, Seychelles, Tunisia, Uganda, Zambia and
Zimbabwe |
“Competing
Proposal for Barrick” |
a
proposal, offer or expression of interest, whether or not in
writing: (a) for an offer (including an exchange offer or
take-over bid), merger, acquisition, dual-listed structure,
amalgamation, statutory arrangement, recapitalization, reverse
take-over, and/or business combination (or the announcement of a
firm intention to do the same), the purpose of which is to acquire,
directly or indirectly, 20 per cent. or more of the issued or to be
issued common share capital of Barrick or any other class of voting
or equity securities of Barrick or securities convertible into or
exchangeable for such voting or equity securities (when aggregated
with the shares already held by the acquirer and any person acting
or presumed or deemed to be acting in concert with the acquirer) or
any arrangement or series of arrangements which results in any
party acquiring, consolidating or increasing ‘control’ (as defined
in the Code) of Barrick; (b) for the acquisition or disposal,
directly or indirectly (and including by way of dilution as a
result of share issuance by any Barrick Group member, excluding
Acacia), of all or a significant proportion (being 20 per cent. or
more) of the business, assets and/or undertakings of the Barrick
Group calculated by reference to any of its revenue, profits or
value taken as a whole; (c) for a demerger and/or liquidation
involving all or a significant portion (being 20 per cent. or more)
of the Barrick Group calculated by reference to any of its revenue,
profits or value taken as a whole; or (d) for any other
transaction which would be reasonably likely materially to
preclude, impede or delay or otherwise prejudice, or be an
alternative to or inconsistent with, the implementation of the
Merger, in each case which is not effected by Randgold (or a person
acting in concert with Randgold) or at Randgold’s direction or with
Randgold’s agreement, and in each case whether implemented in a
single transaction or a series of transactions and whether
conditional or otherwise and excluding in each case the Strategic
Investment Agreement |
“Competing
Proposal for Randgold” |
a
proposal, offer or expression of interest, whether or not in
writing: (a) for an offer (including a partial, exchange or
tender offer), merger, acquisition, dual-listed structure, scheme
of arrangement, reverse take-over, whitewash transaction and/or
business combination (or the announcement of a firm intention to do
the same), the purpose of which is to acquire, directly or
indirectly, 20 per cent. or more of the issued or to be issued
ordinary share capital of Randgold or any other class of voting or
equity securities of Randgold or securities convertible into or
exchangeable for such voting or equity securities (when aggregated
with the shares already held by the acquirer and any person acting
or presumed or deemed to be acting in concert with the acquirer) or
any arrangement or series of arrangements which results in any
party acquiring, consolidating or increasing ‘control’ (as defined
in the Code) of Randgold; (b) for the acquisition or
disposal, directly or indirectly (and including by way of dilution
as a result of share issuance by any Randgold Group member), of all
or a significant proportion (being 20 per cent. or more) of the
business, assets and/or undertakings of the Randgold Group
calculated by reference to any of its revenue, profits or value
taken as a whole; (c) for a demerger and/or liquidation
involving all or a significant portion (being 20 per cent. or more)
of the Randgold Group calculated by reference to any of its
revenue, profits or value taken as a whole; or (d) for any
other transaction which would be reasonably likely materially to
preclude, impede or delay or otherwise prejudice, or be an
alternative to or inconsistent with, the implementation of the
Merger (including, for the avoidance of doubt, any transaction or
arrangement which would constitute a Class 1 transaction for the
purposes of the Listing Rules undertaken by Randgold), in each case
which is not effected by Barrick (or a person acting in concert
with Barrick) or at Barrick’s direction or with Barrick’s
agreement, and in each case whether implemented in a single
transaction or a series of transactions and whether conditional or
otherwise |
“Computershare” |
Computershare Investor Services (Jersey) Limited, Randgold’s
registrar |
“Conditions” |
- for so long as the Merger is being implemented by means of the
Scheme, the terms and conditions to the implementation of the
Merger (including the Scheme) as set out in Part A of Appendix I to
this announcement and to be set out in the Merger Document, as may
be amended by Barrick with the consent of Randgold and the Panel;
and
- for so long as the Merger is being implemented by means of a
Takeover Offer, the terms and conditions referred to in (a)
above, as amended by replacing the conditions set out in paragraph
2 of Part A of Appendix I to this announcement with the Acceptance
Condition and as may be further amended by Barrick with the consent
of the Panel (and, in the event of an Agreed Switch,
Randgold),
and Condition shall be construed accordingly; |
“Continuance” |
the
continuance of Barrick to the Province of British Columbia under
the Business Corporations Act (British Columbia) |
“Cooperation
Agreement” |
the
cooperation agreement entered into between Barrick and Randgold on
24 September 2018 with respect to conduct of the Merger |
“Copper Business” |
consisting of the Lumwana copper mine and the Zaldívar and Jabal
Sayid copper joint ventures |
“CREST” |
the
operator’s system (as defined in the Companies (Uncertificated
Securities) (Jersey) Order 1999) in respect of which Euroclear UK
& Ireland Limited is the authorised operator (as defined in
such Order) in accordance with which securities may be held and
transferred in uncertificated form |
“Dealing Disclosure” |
an
announcement pursuant to Rule 8 of the Code containing details of
dealings in interests in relevant securities of a party to an
offer |
“Depositary” |
Citibank, N.A. in its role as the depositary for the Randgold ADSs
under the amended and restated deposit agreement with Randgold
dated 3 March 2017 |
“Disclosed” |
in
respect of Barrick, means, information which has been fairly
disclosed by or on behalf of Barrick: (i) in the annual report
of Barrick for the 12 month period ended 31 December 2017;
(ii) in the annual information form of Barrick for the
financial year ended 31 December 2017, (iii) in the condensed
unaudited interim consolidated financial statements of Barrick for
the three months ended 31 March 2018; (iv) in the management’s
discussion and analysis of Barrick for the three months ended 31
March 2018; (v) in the condensed unaudited interim
consolidated financial statement of Barrick for the three and six
months ended 30 June 2018; (vi) in the management’s discussion
and analysis of Barrick for the three and six months ended 30 June
2018; (vii) in this announcement; (viii) in any other
public announcement or other document filed by, or on behalf of,
Barrick with the SEC or Canadian securities regulatory authorities
after 31 December 2017 but prior to the date of this announcement;
(ix) in writing to Randgold prior to the date of this announcement
(including to Randgold’s officers, employees, agents or advisers in
their capacity as such); or (x) in the virtual data room operated
by or on behalf of Barrick in respect of the Merger prior to the
date of this announcement; and in respect of Randgold means,
information which has been fairly disclosed by or on behalf of
Randgold: (i) in the annual report and accounts of the
Randgold Group for the 12 month period to 31 December 2017;
(ii) in the quarterly announcements of the Randgold Group for
(a) the three-month period to 31 March 2018 and (b) the
three-month period to 30 June 2018; (iii) in this
announcement; (iv) in any other public announcement by, or on
behalf of, Randgold in accordance with the Listing Rules,
Disclosure Guidance and Transparency Rules of the FCA (as
applicable) after 31 December 2017 but prior to the date of this
announcement; (v) in writing to Barrick prior to the date of this
announcement (including to Barrick’s officers, employees, agents or
advisers in their capacity as such); or (vi) in the virtual data
room operated by or on behalf of Randgold in respect of the Merger
prior to the date of this announcement |
“Effective Date” |
(i) the date on which the Scheme becomes effective in
accordance with its terms; or (ii) if Barrick elects to
implement the Merger by means of a Takeover Offer in accordance
with the terms of the Cooperation Agreement, the date that the
Takeover Offer becomes or is declared unconditional in all
respects |
“Exchange Ratio” |
the
exchange ratio of 6.1280 New Barrick Shares for each Randgold
Share |
“Excluded Shares” |
(i) any
Randgold Shares registered in the name of or beneficially owned by
Barrick or any other member of the Barrick Group; and (ii) any
Randgold Shares held in treasury by Randgold |
“Extraordinary General
Meeting” |
the
extraordinary general meeting of Randgold to be convened in
connection with the Scheme, notice of which will be set out in the
Scheme Document, including any adjournment or postponement
thereof |
“FCA” |
the UK
Financial Conduct Authority |
“Forms of Proxy” |
the
forms of proxy in connection with each of the Jersey Court Meeting
and the Extraordinary General Meeting, which shall accompany the
Scheme Document |
“IFRS” |
International Financial Reporting Standards |
“IRR” |
internal
rate of return |
“Jersey Companies
Law” |
the
Companies (Jersey) Law 1991 |
“Jersey Court” |
the
Royal Court of Jersey |
“Jersey Court
Meeting” |
the
meeting(s) of the Scheme Shareholders to be convened by order of
the Jersey Court pursuant to Article 125 of the Jersey Companies
Law, notice of which will be set out in the Scheme Document, for
the purpose of approving the Scheme, including any adjournment
thereof |
“JORC (2012) Code” |
the
Joint Ore Reserves Committee of the Australasian Institute of
Mining and Metallurgy, Australian Institute of Geoscientists and
Minerals Council of Australia |
“Law” |
any
applicable statute, law, rule, regulation, ordinance, code, order,
judgment, injunction, writ, decree, directive, policy, guideline,
interpretation or rule of common law issued, administered or
enforced by any Government Authority, or any judicial or
administrative interpretation thereof |
“Listing Rules” |
the
rules and regulations made by the FCA in its capacity as the UK
Listing Authority under the Financial Services and Markets Act
2000, and contained in the UK Listing Authority’s publication of
the same name |
“London Stock Exchange” or
“LSE” |
London
Stock Exchange plc or its successor |
“Longstop Date” |
28
February 2019 or such later date as may be agreed in writing by
Barrick and Randgold (with the Panel’s consent and (if such
approval is required) as the Jersey Court may approve) |
“M. Klein and Co.” |
M. Klein
& Company, LLC which provides investment banking services
through The Klein Group, LLC, a registered broker dealer |
“Merger” |
the direct or indirect
acquisition of the entire issued and to be issued share capital of
Randgold by Barrick to be effected by way of: (i) the Scheme; or
(ii) a Takeover Offer (as the case may be) |
“Merger Document” |
(i) if the Scheme is (or
is to be) implemented, the Scheme Document; or (ii) if the Takeover
Offer is (or is to be) implemented, the Offer Document |
“Morgan Stanley” |
Morgan
Stanley & Co. International plc, acting together with its
affiliate, Morgan Stanley Canada Limited |
“NASDAQ” |
the
NASDAQ Global Select Market |
“New Barrick Group” |
the
enlarged group following the Merger comprising the Barrick Group
and the Randgold Group |
“New Barrick Shares” |
the new
Barrick Shares to be issued pursuant to the Merger |
“Non-Core Assets” |
assets
that are neither Tier One Gold Assets nor Strategic Assets, nor
form part of the strategic Copper Business |
“Non-Permitted Barrick
Dividend” |
any
Barrick dividend (other than or in excess of the Barrick Permitted
Dividends), distribution or return of capital that after the date
of this announcement is declared, made or paid or becomes payable
in respect of the Barrick Shares with a record date on or before
the Effective Date |
“NYSE” |
the New
York Stock Exchange |
“Offer Document” |
if
(following the date of the Cooperation Agreement) Barrick elects to
implement the Merger by way of the Takeover Offer in accordance
with clause 9.1 of the Cooperation Agreement, the document to be
sent to (among others) Randgold Shareholders setting out, among
other things, the full terms and conditions of the Takeover
Offer |
“Official List” |
the
official list maintained by the UK Listing Authority |
“Opening Position
Disclosure” |
an
announcement containing details of interests or short positions in,
or rights to subscribe for, any relevant securities of a party to
the offer if the person concerned has such a position, as defined
in Rule 8 of the Code |
“Overseas
Shareholders” |
Randgold
Shareholders who are resident in, ordinarily resident in, or
citizens of, jurisdictions outside Canada, the United States, the
United Kingdom or Jersey or who are nominees of, or custodian or
trustee for the same |
“Panel” or “Takeover
Panel” |
the UK
Panel on Takeovers and Mergers |
“PRA” |
the UK
Prudential Regulation Authority |
“Randgold” |
Randgold
Resources Limited |
“Randgold ADSs” |
American
Depositary Shares, each of which represents one Randgold Share |
“Randgold Annual Bonus
Plan” |
the
Randgold Annual Bonus Plan approved by the Board on 2 May 2011 and
amended by the Board on 28 February 2014, 3 May 2016, 16 March 2017
and 22 March 2018 |
“Randgold Articles” |
the
memorandum and articles of association of Randgold |
“Randgold
Board Adverse Recommendation Change” |
- if Randgold makes an announcement prior to the publication of
the Merger Document(s) that: (i) the Board of Randgold no longer
intend to make the Randgold Board Recommendation or intend to
modify or qualify such recommendation in any adverse way; (ii)
except as contemplated in the Cooperation Agreement, it will not
convene the Jersey Court Meeting or the Extraordinary General
Meeting; or (iii) except as contemplated in the Cooperation
Agreement, it intends not to post the Scheme Document or (if
different) the document convening the Extraordinary General
Meeting;
- if Randgold makes an announcement that it will delay the
convening of, or will adjourn, the Jersey Court Meeting, the
Extraordinary General Meeting or the Scheme Court Hearing for more
than 15 calendar days, in each case without the consent of Barrick,
or fails to register the Scheme Court Order with the Registrar of
Companies by the later of (i) the expected Effective Date as set
out in the Scheme Document or any subsequent announcement in
relation to the timetable of the Merger published with the
agreement of the parties and (ii) 2 Business Days of its
grant;
- the Randgold Board Recommendation is not included by Randgold
in the Merger Document(s); or
- the Board of Randgold in any way withdraw, adversely modify or
adversely qualify the Randgold Board Recommendation
|
“Randgold
Board Recommendation” |
means an
unqualified recommendation from the Board of Randgold to Randgold
Shareholders in respect of the Merger: (i) to vote in favour of the
Randgold Resolutions; or (ii) if Barrick elects to implement the
Merger by means of a Takeover Offer in accordance with the terms of
the Cooperation Agreement, to accept the Takeover Offer |
“Randgold CEO Award” |
the
one-off award of performance shares granted to Mark Bristow in
2013 |
“Randgold Co-investment
Plan” |
the
Randgold Co-investment Plan approved by Randgold in general meeting
on 3 May 2011 and amended by the Randgold Board on 30 January
2012 |
“Randgold Equalisation
Dividend” |
the
dividend payable to the Randgold Shareholders if a Non-Permitted
Barrick Dividend is declared, made or paid in accordance with
paragraph 3 (Dividends) of this announcement |
“Randgold Group” |
Randgold
and its subsidiary undertakings and, in the context of the
Cooperation Agreement, Randgold and its subsidiary undertakings and
any undertakings in which it controls, directly or indirectly, 20
per cent. of the voting rights and member of the Randgold Group
shall be construed accordingly |
“Randgold Long-Term
Incentive Plan” |
the
Randgold Long-Term Incentive Plan approved by the Randgold Board
and by the Special Committee of the Remuneration Committee on 20
March 2018 and approved by the Randgold Shareholders on 8 May
2018 |
“Randgold Meetings” |
the
Extraordinary General Meeting and the Jersey Court Meeting |
“Randgold Permitted
Dividend” |
the
dividend payable to Randgold Shareholders in accordance with
paragraph 3 (Dividends) of this announcement |
“Randgold
Resolutions” |
such
shareholder resolutions of Randgold as are necessary to approve,
implement and effect the Scheme and the Merger and changes to
Randgold’s articles of association |
“Randgold Restricted Share
Scheme” |
the
Randgold Restricted Share Scheme approved by the Randgold Board on
26 March 2008 and by Randgold in the general meeting on 28 July
2008 and amended by the Randgold Board on 30 January 2012 |
“Randgold Return of
Capital” |
any
dividend, distribution or return of capital that is declared, made
or paid or becomes payable in respect of the Randgold Shares (other
than a Randgold Permitted Dividend or a Randgold Equalisation
Dividend) with a record date on or before the Scheme Record
Time |
“Randgold Share
Plans” |
the
Randgold CEO Award, the Randgold Resources Limited Restricted Share
Scheme, the Randgold Resources Limited Co-Investment Plan, the
Randgold Resources Limited Long-Term Incentive Plan, and the
Randgold Annual Bonus Plan (to the extent it relates to the
deferred bonus shares) |
“Randgold
Shareholders” |
the
registered holders of Randgold Shares from time to time |
“Randgold Shares” |
the
ordinary shares of USD 0.05 each in the capital of Randgold |
“Registrar of
Companies” |
the
Registrar of Companies of the Jersey Financial Services
Commission |
“Regulation” |
Council
Regulation (EC) 139/2004 (as amended) |
“Regulatory Information
Service” |
any
information service authorised from time to time by the FCA for the
purpose of disseminating regulatory announcements |
“Relationship
Agreement” |
the
amended and restated relationship agreement dated 16 November 2014
entered into between Barrick and Acacia |
“Restricted
Jurisdiction” |
any
jurisdiction (excluding Canada, Jersey, the United Kingdom and the
United States) where local laws or regulations may result in a
significant risk of civil, regulatory or criminal exposure for
Barrick or Randgold if information concerning the Merger is sent or
made available to Randgold Shareholders in that jurisdiction |
“Scheme” |
the
scheme of arrangement proposed to be made under Article 125 of the
Jersey Companies Law between Randgold and the Scheme Shareholders,
with or subject to any modification, addition or condition approved
or imposed by the Jersey Court and agreed to by Randgold and
Barrick |
“Scheme Court
Hearing” |
the
hearing of the Jersey Court to sanction the Scheme |
“Scheme Court Order” |
the
order(s) of the Jersey Court sanctioning the Scheme under Article
125 of the Jersey Companies Law |
“Scheme Document” |
the
document to be sent to (among others) Randgold Shareholders
containing and setting out, among other things, the full terms and
conditions of the Scheme and containing the notices convening the
Jersey Court Meeting and Extraordinary General Meeting |
“Scheme Record Time” |
the time
and date specified in the Scheme Document, expected to be 6.00 p.m.
on the date of the Scheme Court Hearing or such later time as
Randgold and Barrick may agree immediately prior to the Effective
Date |
“Scheme Shareholders” |
the
holders of Scheme Shares |
“Scheme Shares” |
all
Randgold Shares which are: (a) in issue as at the date of the
Scheme Document; (b) (if any) issued after the date of the
Scheme Document and prior to the Scheme Voting Record Time; and
(c) (if any) issued on or after the Scheme Voting Record Time
and before the Scheme Record Time, in respect of which the original
or any subsequent holders thereof shall be bound by the Scheme or
in respect of which the holders thereof shall have agreed in
writing to be bound by the Scheme, in each case other than the
Excluded Shares |
“Scheme Voting Record
Time” |
the time
and date specified in the Scheme Document by reference to which
entitlement to vote on the Scheme will be determined |
“SEC” |
the U.S.
Securities and Exchange Commission |
“Senior Gold Peers” |
Agnico
Eagle Mines Limited, Goldcorp Inc., Newcrest Mining Limited, and
Newmont Mining Corporation |
“Shandong Gold” |
Shandong Gold Group Co.,
Ltd. |
“Shandong Mining”
|
Shandong Gold Mining Co.,
Ltd. |
“Special Resolution” |
the
special resolution to be proposed by Randgold at the Extraordinary
General Meeting in connection with, among other things, the
approval of the Scheme and the alteration of the Randgold Articles
and such other matters as may be necessary to implement the
Scheme |
“Strategic Assets” |
assets
which, in the opinion of Barrick and Randgold, have the potential
to deliver significant unrealized value in the future |
“Strategic Investment
Agreement” |
means
the strategic investment agreement to be entered into between
Barrick and Shandong on or around 24 September 2018, which provides
for cross-investments of up to USD 300 million through the
acquisition of shares of Shandong Mining and Barrick, respectively,
through the facilities of the stock exchanges on which such shares
are listed |
“Substantial
Interest” |
a direct
or indirect interest in 20 per cent. or more of the voting equity
capital of an undertaking |
“Takeover Offer” |
means a
take-over offer (within the meaning of Article 116 of the Jersey
Companies Law) to be made by or on behalf of Barrick to acquire the
entire issued and to be issued share capital of Randgold on the
terms and conditions to be set out in the Offer Document; |
“Third Party” |
any
central bank, ministry, governmental, quasi-governmental,
supranational (including COMESA and the European Union), statutory,
regulatory or investigative body, authority or tribunal (including
any national or supranational anti-trust, competition or merger
control authority, any sectoral ministry or regulator and foreign
investment review body), national, state, municipal or local
government (including any subdivision, court, tribunal,
administrative agency or commission or other authority thereof),
any entity owned or controlled by any of them, any private body
exercising any regulatory, taxing, importing or other authority,
trade agency, association, institution or professional or
environmental body in any jurisdiction |
“Tier One Gold Asset” |
a mine
with a stated mine life in excess of ten years with 2017 production
of at least five hundred thousand ounces of gold, 2017 total cash
cost per ounce in the bottom half of all gold mines contained in
Wood Mackenzie’s Metals Cost Curves Tool (<$748/oz total cash
cost), excluding state-owned and privately-owned
mines |
“UK” or “United
Kingdom” |
the
United Kingdom of Great Britain and Northern Ireland |
“UK Listing
Authority” |
the FCA
as the authority for listing in the United Kingdom |
“United States of
America”, “United States” or “US” |
the
United States of America, its territories and possessions, any
state of the United States of America, the District of Columbia and
all other areas subject to its jurisdiction and any political
sub-division thereof |
“US Randgold ADS
Holders” |
Holders
of Randgold ADSs from time to time in the US |
“US Securities Act of
1933” |
the
United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder |
“US Securities Exchange
Act of 1934” |
the
United States Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder |
“US Randgold ADS
Holders” |
Holders
of Randgold ADSs from time to time in the US |
“Wider Barrick Group” |
Barrick
and the subsidiaries and subsidiary undertakings of Barrick and
associated undertakings (including any joint venture, partnership,
firm or company in which any member of the Barrick Group is
interested or any undertaking in which Barrick and such
undertakings (aggregating their interests) have a Substantial
Interest) |
“Wider Randgold
Group” |
Randgold
and the subsidiaries and subsidiary undertakings of Randgold and
associated undertakings (including any joint venture, partnership,
firm or company in which any member of the Randgold Group is
interested or any undertaking in which Randgold and such
undertakings (aggregating their interests) have a Substantial
Interest) |
For the purposes of this announcement,
“subsidiary”, “subsidiary undertaking”, “undertaking”, “associated
undertaking” have the meanings given by the UK Companies Act 2006
as amended.
References to an enactment include references to
that enactment as amended, replaced, consolidated or re-enacted by
or under any other enactment before or after the date of this
announcement. All references to time in this announcement are to
London time unless otherwise stated.
Appendix 5 Non-GAAP
Measures Reconciliations
Adjusted EBITDA
“EBITDA” is a non-GAAP financial performance
measure, which excludes the following from net earnings: (i) income
tax expense; (ii) finance costs; (iii) finance income; and (iv)
depreciation. Barrick and Randgold believe that EBITDA is a
valuable indicator of their ability to generate liquidity by
producing operating cash flow to fund working capital needs,
service debt obligations, and fund capital expenditures. Barrick
and Randgold use EBITDA for this purpose. EBITDA is also frequently
used by investors and analysts for valuation purposes whereby
EBITDA is multiplied by a factor or “EBITDA multiple” that is based
on an observed or inferred relationship between EBITDA and market
values to determine the approximate total enterprise value of a
company.
Barrick also reports “Adjusted EBITDA” which
removes the effect of impairment charges; acquisition/disposition
gains/losses; foreign currency translation gains/losses; other
expense adjustments; and unrealized gains on non-hedge derivative
instruments. Barrick believes these items provide a greater level
of consistency with the adjusting items included in Barrick’s
Adjusted Net Earnings reconciliation, with the exception that these
amounts are adjusted to remove any impact on finance costs/income,
income tax expense and/or depreciation as they do not affect
EBITDA. Barrick and Randgold believe this additional information
will assist analysts, investors and other stakeholders in better
understanding the New Barrick Group’s ability to generate liquidity
from operating cash flow, by excluding these amounts from the
calculation as they are not indicative of the performance of its
core mining business and not necessarily reflective of the
underlying operating results for the periods presented.
EBITDA and Adjusted EBITDA are intended to
provide additional information to investors and analysts and do not
have any standardized definition under IFRS and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. EBITDA and Adjusted
EBITDA exclude the impact of cash costs of financing activities and
taxes, and the effects of changes in operating working capital
balances, and therefore is not necessarily indicative of operating
profit or cash flow from operations as determined under IFRS. Other
companies may calculate EBITDA and Adjusted EBITDA differently.
Below is a reconciliation of Barrick’s and
Randgold’s Adjusted EBITDA to the most directly comparable GAAP
measure.
For the year ended 31 December
2017 |
|
|
($
millions) |
Barrick1 |
Randgold2 |
Combined |
Net
earnings (loss) |
$ |
1,516 |
|
$ |
335 |
|
$ |
1,851 |
|
Income tax expense |
|
1,231 |
|
|
146 |
|
|
1,377 |
|
Finance costs, net |
|
624 |
|
|
(3 |
) |
|
621 |
|
Depreciation |
|
1,647 |
|
|
183 |
|
|
1,830 |
|
EBITDA |
$ |
5,018 |
|
$ |
661 |
|
$ |
5,679 |
|
Impairment charges (reversals) of long-lived assets |
|
(212 |
) |
|
- |
|
|
(212 |
) |
Acquisition/disposition (gains)/losses |
|
(911 |
) |
|
- |
|
|
(911 |
) |
Foreign currency translation (gains)/losses |
|
72 |
|
|
(10 |
) |
|
62 |
|
Other
expense adjustments |
|
51 |
|
|
- |
|
|
51 |
|
Unrealized gains on non-hedge derivative instruments |
|
(1 |
) |
|
- |
|
|
(1 |
) |
Adjusted EBITDA |
$ |
4,017 |
|
$ |
651 |
|
$ |
4,668 |
|
1 Barrick EBITDA and Adjusted EBITDA figures can
be found on page 82 of the MD&A accompanying the Barrick
financial statements for the year ended 31 December 2017.2 Randgold
EBITDA and Adjusted EBITDA figures are calculated using figures
from the Consolidated Statement of Comprehensive Income on page
F-10 and note 20 on page F-41 of Randgold’s Annual Financial
Statement for the financial year ended 31 December 2017. The
Randgold foreign currency translation gain is set out on page 3 of
the Randgold report for the fourth quarter and year ended 31
December 2017.
Adjusted EBITDA Margin
“Adjusted EBITDA Margin” is calculated by
dividing Adjusted EBITDA by revenue. Barrick and Randgold use
“Adjusted EBITDA margin” because they believe that this non-GAAP
financial performance measure is an important indicator of
recurring operations, as it excludes items that may not be
indicative of, or are unrelated to, their core operating results,
and provides a measure of profitability. Adjusted EBITDA margin” is
a non-GAAP financial performance measure with no standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers.
For the year ended 31 December 2017 |
|
|
|
($millions) |
Barrick1 |
Randgold2 |
Combined |
Revenue |
$ |
8,374 |
$ |
1,280 |
$ |
9,654 |
|
Adjusted EBITDA |
|
4,017 |
|
651 |
|
4,668 |
|
Adjusted EBITDA Margin |
|
|
|
48 |
% |
1 Barrick revenue and Adjusted EBITDA figures
can be found on pages 42 and 82, respectively, of the MD&A
accompanying the Barrick financial statements for the year ended 31
December 2017.2 Randgold revenue can be found on page F-10 of
Randgold’s Annual Financial Statement for the financial year ended
31 December 2017 and the Adjusted EBITDA figure for the year ended
31 December 2017 is calculated above.
Total Cash Costs
Randgold uses the term “total cash costs”, which
is a non-GAAP financial performance measure, calculated using
guidance issued by the Gold Institute. The Gold Institute was a
non-profit industry association comprising leading gold producers,
refiners, bullion suppliers and manufacturers. This institute has
now been incorporated into the National Mining Association. The
guidance was first issued in 1996 and revised in November 1999.
Total cash costs, as defined in the Gold Institute’s guidance,
include mine production, transport and refinery costs, general and
administrative costs, movement in production inventories and ore
stockpiles, and royalties. Total cash costs exclude costs
associated with capitalized stripping activities.
Total cash costs is calculated on a consistent
basis for the periods presented. Total cash costs should not be
considered by investors as an alternative to operating profit or
net profit attributable to shareholders, as an alternative to other
IFRS measures. The data does not have a meaning prescribed by IFRS
and therefore amounts presented may not be comparable to data
presented by gold producers who do not follow the guidance provided
by the Gold Institute. In particular depreciation and amortization
would be included in a measure of total costs of producing gold
under IFRS, but are not included in total cash costs under the
guidance provided by the Gold Institute. Furthermore, while the
Gold Institute has provided a definition for the calculation of
total cash costs, the calculation of these numbers may vary from
company to company and may not be comparable to other similarly
titled measures of other companies. However, Barrick and Randgold
believe that total cash costs is a useful indicator to investors
and management of a mining company’s performance as it provides an
indication of a company’s profitability and efficiency, the trends
in cash costs as the company’s operations mature, and a benchmark
of performance to allow for comparison against other companies.
Below is a reconciliation of Randgold’s total
cash costs to the most directly comparable GAAP measure.
For the year ended 31 December 2017 |
|
($millions) |
|
Gold
sales per IFRS |
$ |
1,280 |
|
Gold sales adjustments
for joint ventures |
$ |
374 |
|
Gold sales |
$ |
1,654 |
|
Mine production
costs |
$ |
474 |
|
Movement in production
inventory and ore stockpiles |
$ |
(12 |
) |
Royalties |
$ |
82 |
|
Royalty adjustment for
joint ventures |
$ |
(16 |
) |
Total royalties |
$ |
66 |
|
Other mining and
processing costs |
$ |
63 |
|
Cash cost
adjustments for joint ventures |
$ |
225 |
|
Total
cash costs |
$ |
815 |
|
|
|
Consolidated ounces
sold (thousands) |
|
1,315 |
|
Total
cash cost per ounce |
$ |
620 |
|
Barrick uses the term “cash costs per ounce” for
the most comparable measure to “total cash costs”. Cash costs per
ounce is a non-GAAP financial performance measure which is
calculated based on the definition published by the World Gold
Council (“WGC”) (a market development organization for the gold
industry comprised of and funded by 24 gold mining companies from
around the world, including Barrick). The WGC is not a regulatory
organization. Barrick uses this measure to monitor the performance
of its gold mining operations and its ability to generate positive
cash flow, both on an individual site basis and an overall company
basis.
Cash costs start with Barrick’s cost of sales
related to gold production and removes depreciation, the
non-controlling interest of cost of sales and includes by-product
credits. Barrick believes that its use of cash costs will assist
analysts, investors and other stakeholders of Barrick in
understanding the costs associated with producing gold,
understanding the economics of gold mining, assessing its operating
performance and also its ability to generate free cash flow from
current operations and to generate free cash flow on an overall
company basis. Due to the capital-intensive nature of the industry
and the long useful lives over which these items are depreciated,
there can be a significant timing difference between net earnings
calculated in accordance with IFRS and the amount of free cash flow
that is being generated by a mine and therefore Barrick believes
this measure is a useful non-GAAP operating metric and supplements
its IFRS disclosure. This measure is not representative of all of
Barrick’s cash expenditures as it does not include income tax
payments, interest costs or dividend payments. This measure does
not include depreciation or amortization.
Cash costs per ounce is intended to provide
additional information only and does not have a standardized
definition under IFRS and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. This measure is not equivalent to net income or cash
flow from operations as determined under IFRS. Although the WGC has
published a standardized definition, other companies may calculate
this measure differently.
Below is a reconciliation of Barrick’s cash
costs per ounce to the most directly comparable GAAP measure.
For the year ended 31 December 2017 |
|
($millions) |
|
Cost of sales related
to gold production |
$ |
4,836 |
|
Depreciation |
$ |
(1,529 |
) |
By-product credits |
$ |
(135 |
) |
Realized (gains)/losses
on hedge and non-hedge derivatives |
$ |
23 |
|
Non-recurring
items |
$ |
- |
|
Other (Pierina
COS) |
$ |
(106 |
) |
Non-controlling interests (Pueblo Viejo and Acacia) |
$ |
(299 |
) |
Cash
costs |
$ |
2,790 |
|
|
|
Ounces sold -
attributable basis (thousands) |
|
5,302 |
|
Cash
costs per ounce |
$ |
526 |
|
|
|
For the purposes of presenting a combined total cash cost figure
for the New Barrick Group, a reconciliation of Barrick’s cash costs
per ounce to total cash costs was undertaken. The reconciliation
calculation is set out below.
For the year ended 31 December 2017 |
|
($millions) |
|
Barrick cash costs1 |
$ |
2,790 |
add back Barrick non-controlling interest |
|
299 |
Barrick total cash costs |
$ |
3,089 |
Randgold total cash costs2 |
|
815 |
Combined total cash costs |
$ |
3,904 |
|
|
Barrick ounces sold - attributable basis (thousands)1 |
|
5,302 |
add Barrick non-controlling interest ounces sold (thousands) 3 |
|
639 |
Barrick consolidated ounces (thousands) |
|
5,941 |
Randgold consolidated ounces sold2 (thousands) |
|
1,315 |
Combined consolidated ounces sold (thousands) |
|
7,256 |
|
|
Combined total cash cost per ounce4 |
$ |
538 |
1 Barrick reports cash cost per ounce. See the
table above for a full reconciliation of cash cost per ounce to the
most directly comparable GAAP measure. Barrick cash costs per ounce
are reported on an attributable ounce basis whereas Randgold
reports total cash costs on a consolidated ounce basis. In order to
convert Barrick’s cash costs to total cash costs, the cash costs
have been grossed up to include the non-controlling interest
portion of costs and ounces for Barrick’s non-wholly owned
subsidiaries.2 Randgold reports total cash costs. See the table
above for a full reconciliation of total cash costs to the most
directly comparable GAAP measure.3. Ounces attributable to
non-controlling interests at Pueblo Viejo and Acacia calculated
assuming non-controlling interest of 40% at Pueblo Viejo and 36.1%
at Acacia according to page 79 of the MD&A accompanying the
Barrick financial statements for the year ended 31 December 2017.
Ounces attributable to Barrick can be found on page 76 of the
MD&A accompanying the Barrick financial statements for the year
ended 31 December 2017.4 The combined total cash cost per ounce is
calculated by taking the combined total cash costs and dividing
such figure by the combined ounces sold.
Endnotes
- “Lowest total cash cost” is based on data from Wood Mackenzie
as of 31 August 2018. “Total cash cost” is a non-GAAP financial
performance measure with no standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. Financial comparisons between the New Barrick Group
and its Senior Gold Peers, as well as comparisons between Tier One
Gold Assets, are made on the basis of the data presented by Wood
Mackenzie which may not be calculated in the same manner as Barrick
and Randgold calculate comparable measures. For further
information, see “Non-GAAP Financial Performance Measures” and
“Third Party Data” in this announcement.
- “Adjusted EBITDA” is a non-GAAP financial performance measure
with no standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other issuers. See
Appendix 5 for more detail, including an explanation of why Barrick
and Randgold use this non-GAAP financial measure and a
reconciliation of Barrick and Randgold Adjusted EBITDA to net
earnings of each of Barrick and Randgold, respectively.
- “Highest Adjusted EBITDA” and “highest Adjusted EBITDA margin”
are based on data from Factset as of 31 August 2018 and are
non-GAAP financial performance measures with no standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. Financial comparisons
between the New Barrick Group and its Senior Gold Peers are made on
the basis of the data presented by Factset which may not be
calculated in the same manner as Barrick and Randgold calculate
comparable measures. For further information regarding these
non-GAAP financial performance measures as calculated by Barrick
and Randgold please see endnote 2, Appendix 5 and “Non-GAAP
Financial Performance Measures” and “Third Party Data” in this
announcement.
- “Adjusted EBITDA margin” is a non-GAAP financial performance
measure with no standardized meaning under IFRS and therefore may
not be comparable to similar measures presented by other issuers.
For further information regarding this non-GAAP financial
performance measure, see “Non-GAAP Financial Performance Measures”
in this announcement. The calculation of Adjusted EBITDA margin and
a reconciliation of Barrick and Randgold Adjusted EBITDA to the net
earnings of each of Barrick and Randgold, respectively, is included
in Appendix 5 to this announcement.
- “Total cash cost” is a non-GAAP financial performance measure
with no standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other issuers. See
Appendix 5 for more detail, including an explanation of why Barrick
and Randgold use this non-GAAP financial performance and a
reconciliation of total cash cost to the most directly comparable
GAAP measure.
- “Highest return on capital” is based on data from Bloomberg as
of 31 August 2018, and is a non-GAAP financial performance measure
with no standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other issuers.
Financial comparisons between the New Barrick Group and its Senior
Gold Peers are made on the basis of the data presented by Bloomberg
which may not be calculated in the same manner as Barrick and
Randgold calculate comparable measures. Barrick and Randgold use
“return on capital” because they believe that this non-GAAP
financial performance measure is an important indicator of their
long term ability to generate a return on capital and provide
useful information for analysing the prospects of their
business. For further information, see “Third Party Data” in
this announcement.
- The potential combined gold reserves figure of 78 million
ounces (rounded to the nearest million) is an aggregate of the gold
Mineral Reserves reported at USD1200/oz by Barrick in its annual
information form for the year ended 31 December 2017 (comprising
attributable proven gold Mineral Reserves of 398 million tonnes, at
a grade of 1.91 grams/tonne, containing 24 million ounces and
attributable probable gold Mineral Reserves of 896 million tonnes,
at a grade of 1.39 grams/tonne, containing 40 million ounces, for
aggregate attributable proven and probable gold Mineral Reserves of
1,295 million tonnes, at a grade of 1.55 grams/tonne, containing 64
million ounces) and the gold Ore Reserves reported by Randgold at
USD1000/oz in its annual report for the year ended 31 December 2017
(comprising total proved gold Ore Reserves of 44 million tonnes, at
a grade of 3.78 grams/tonne, containing 3.5 million attributable
ounces and total probable gold Ore Reserves of 128 million tonnes,
at a grade of 3.78 grams/tonne, containing 10 million attributable
ounces, for aggregate total proven and probable gold mineral
reserves of 172 million tonnes, at a grade of 3.78 grams/tonne,
containing 14 million attributable ounces). The assumptions on
which the Mineral Reserves for Barrick are reported are set out in
Barrick’s annual information form published on 23 March 2018 and
available from www.barrick.com/investors/agm/. The assumptions on
which the Ore Reserves for Randgold are reported are set out in
Randgold’s annual report published on 29 March 2018 and available
from www.randgoldresources.com/annual-reports-listing. The Barrick
Mineral Reserves have been prepared according to Canadian Institute
of Mining, Metallurgy and Petroleum (“CIM”) 2014 Definition
Standards for Mineral Resources and Mineral Reserves as
incorporated by National Instrument 43-101 – Standards of
Disclosure for Mineral Projects. The Randgold Ore Reserves have
been prepared according to the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves standards
and guidelines, published and maintained by the Joint Ore Reserves
Committee of the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and the Minerals Council of
Australia (the “JORC (2012) Code”). Randgold has reconciled the
reported Ore Reserves to the CIM 2014 Definition Standards for
Mineral Resources and Mineral Reserves as incorporated by National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
and there are no material differences. The Barrick tonnage and
grade figures are reported on an attributable basis and the
Randgold tonnage and grade figures are reported on a total basis.
The Barrick Mineral Reserves are reported using USD 1200/oz except
for Kalgoorlie, which uses A$1600/oz and Bulyanhulu, North Mara and
Buzwagi which use USD 1100/oz and the Randgold Ore Reserves
are reported using USD 1000/oz, except for Kibali KCD open pit,
which uses an USD 1100/oz pit design. As a result, the respective
Mineral Reserves and Ore Reserves of Barrick and Randgold may not
be directly comparable. The potential combined reserves should be
treated as forward-looking statements and are subject to change
under differing gold price assumptions.
- The lowest gross debt to Adjusted EBITDA ratio is, in respect
of Adjusted EBITDA, based on data from Factset for the financial
year ended 31 December 2017, and, in respect of gross debt, based
on the 30 June 2018 financial statements for each of Barrick,
Randgold and each Senior Gold Peer, and is a non-GAAP financial
performance measure with no standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. Financial comparisons between the New Barrick Group
and its Senior Gold Peers made on the basis of the data presented
by Factset may not be calculated in the same manner as Barrick and
Randgold calculate comparable measures. Barrick and Randgold use
“gross debt to Adjusted EBITDA ratio” because they believe that
this non-GAAP financial performance measure is an important
indicator of a company’s capital structure and balance sheet
strength relative to the profitability of its business. For further
information, see “Third Party Data” in this announcement.
Barrick Gold (TSX:ABX)
Historical Stock Chart
Von Feb 2024 bis Mär 2024
Barrick Gold (TSX:ABX)
Historical Stock Chart
Von Mär 2023 bis Mär 2024