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06.10.2003 Business & Finance

Randgold to dole out $1bn to revamp Ashanti

By Patrick Baidoo for Chronicle
Randgold to dole out $1bn to revamp Ashanti
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Randgold Resources will revamp Ashanti Goldfields Company (AGC) with US$1 billion in capital expenditure and will create an independent and Pan-African gold business if the proposed merger goes ahead. The Chief Executive Officer of Randgold, Dr. Mark Bristow, said this during a stakeholder meeting in Accra last Thursday to officially announce Randgold’s merger proposal, which has been submitted to the Board of Ashanti. He said the proposal (enlarged business), if considered, would enhance a low cost in production with significant potential growth. He said the Ashanti name and brand would be retained and re-launched on the London Stock Exchange with a full UK index membership respectively and also existing shareholders of Randgold and Ashanti would own approximately 30% and70% of the overall shares. Also Ashanti will retain the chairmanship of the enlarged business and workers will not be retrenched but rather trained to add more efficiency to the enlarged business and the government’s right under the Golden Share still respected. He said it has always been the policy of Randgold to undertake community development projects in the areas of operation. He also stressed on some of the key benefits the enlarged business stands to gain which include the smooth accessibility of the enlarged business to major international markets, strengthened investment appeal to a broader audience and highly complementary asset bases with strong organic potential growth amongst others. Dr. Bristow said the combined management of the enlarged business would be one of the most experienced in Africa with extensive know-how in global equity markets, debt financing, ore body modeling, grade control, mine planning and feasibility studies and the technical expertise in open pit, underground and deep level mining. He said Randgold’s proposal was a winning one that would create value for the enlarged business and the new Ashanti well placed to become Africa’s leading gold business adding that considering the success that Randgold had chalked with some mining firms in Mali, Cote devoire, Tanzania etc, Randgold was the best choice and that the merger would create an African Gold Champion.
He said the company believed that its proposal represented a genuine and attractive alternative to the transaction currently proposed by Anglogold, with a lower level of conditionality. Mr. Bristow said he believed in Anglogold, but did not think that they had what it would take to turn Ashanti into the world-beater Randgold intended to do. “Anglogold offer suggests to move the headquarters of the company to South Africa. However, you will realize that South Africa already has over six major mining firms. Why take another huge company such as Ashanti, there?” he questioned. Mr. Bristow said: “It is better to keep it as it was, where investors can invest in an emerging market and yet reap the benefits.”

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