surrounding corporate action, page-9

Found this article tonight, there is more on this to be found as well.

http://www.mineweb.co.za/mineweb/view/mineweb/en/page67?oid=86352&sn=Detail

SERIOUS GOLD MERGER ACTION
Top gold miners in gritty DRC takeover battle
Moto's dazzling Congo gold orebody is now the centre of a serious takeover battle: Red Back, AngloGold Ashanti, Randgold Resources, with more possibilities; Newmont, perhaps?

Author: Barry Sergeant
Posted: Thursday , 16 Jul 2009

JOHANNESBURG -

There is no major gold mining company in the world that has not been dazzled by Moto Goldmines's gold orebody in the Democratic Republic of the Congo; the biggest of all, Barrick, once owned the property, until yet another DRC civil war, in 1998.

For more than just that reason, the effective joint venture bid announced today by Randgold Resources and AngloGold Ashanti for Moto Goldmines comes as no surprise, given that in February this year African miner Randgold Resources, one of the world's more highly regarded (and expensive) gold stocks, effectively put Moto into play by confirming the possibility of a scrip offer.

On 1 June, fellow African gold miner Red Back Mining and Moto announced a friendly business combination where each outstanding common share of Moto would be exchanged for 0.45 of a common share of Red Back. Based on relevant closing prices at the time, the transaction was valued at around C$513m, and represented a premium to Moto shareholders of about 40%, based on the 20-day volume-weighted average of both companies' common shares in Toronto.

Thursday's announcement proposes Moto shareholders receiving a mixture of paper and cash from Randgold Resources, but with an option to receive a 100% cash of US$244m; AngloGold Ashanti is proposing US$244m cash for the other 50% of Moto. The full value of the offer amounts to up to US$488m, at least half in cash. In per share numbers, the new offer is effectively C$5.00 per Moto share, compared to the C$4.50 per Moto share offer from Red Back. Only time will tell if Red Back has the firepower, alone or in conjunction with another party, to up the ante.

But it would be a tough call; AngloGold Ashanti already operates a big exploration project relatively close (given the size of the DRC) to Moto. Randgold Resources has been given DRC government approval, outflanking Red Back on that score, and the joint venture offer today already has 22.4% irrevocable undertakings from existing Moto shareholders. AngloGold Ashanti offers a global Tier I gold miner balance sheet, and Randgold Resources, one of the most liquid of gold stocks, and, to repeat, certainly one of the most expensive, making Moto a relatively cheap acquisition, if successful. The potential joint venture parties have known each other for years in that capacity at the Morila gold mine in Mali.

Moto shareholders may want to consider that Red Back's smaller company status will give Moto shareholders more leverage to the mighty Moto gold project. On numbers crunched by one specialist London stockbrokers today, Red Back can afford to bid at least 0.55 Red Back shares (compared to the standing offer of 0.45) for Moto before the transaction becomes dilutive to Red Back's net asset value.

Red Back might recruit an ally to take on the new predators; potential names include Golden Star, which previously held a stake in Moto, or even global Tier I gold names Newmont, particularly active in Ghana, and even Barrick, particularly active in Tanzania.

A merged Red Back-Moto entity alone would be targeting production of one million ounces a year, clearly signaling an intent to join the exclusive rankings of global Tier I gold diggers. Red Back, already a global Tier II gold miner, holds interests in and operates gold mines at Chirano (Ghana) and Tasiast (Mauritania), and could (by itself) be producing 500,000 ounces of gold a year by 2012, nearly doubling 2008 production, if its own projections unfold as planned.

Red Back is anticipating 2009 production of 400,000 ounces at cash costs of US$385 an ounce, up from 260,000 ounces in 2008. While both Red Back mines appear to be situated in gold provinces that could yield up further deposits, Red Back may also move further up the production ladder on the back of corporate activity, as now appears to be the case.

Moto has one of Africa's best undeveloped gold projects - in one of the continent's most challenging countries. Moto has a 70:30 joint venture with DRC parastatal group Okimo for the project's 22.5m ounce gold resource, of which 15.8m ounces are attributable to Moto.

While Moto's DRC licence status has now been fully cleared, Moto has significant country risk and infrastructure challenges and, of course, one of the world's great gold properties. The DRC's one time colonial masters mined over 11m ounces from the Moto gold camp until Congolese independence in 1960.

The possibility of Red Back being jilted may see it return to the share register of Mineral Deposits, where Red Back spent some time earlier this year. Iamgold, which already holds African interests, recently bought 17% of Oromin, neighbour to Mineral Deposits in Senegal, and may also be circling the skies. Mineral Deposits is set to produce around 160,000 ounces of gold this year from Sabodala in Senegal. Earlier this year, Iamgold completed the US$139m acquisition of Orezone Resources, mainly for its Essakane gold mine in Burkina Faso.