Randgold Refutes SOKIMO Claims Over Barrick Merger
(Kitco News) - SOKIMO, the state miner of the Democratic Republic of the Congo, told Randgold Resources Ltd. (Nasdaq: GOLD) Friday that it will “assert its rights” since a merger announcement this week would bring in a new outside partner, but Randgold refuted the claims.
Canadian producer Barrick Gold Corp. (NYSE, TSX: ABX) will acquire Randgold in a planned all-stock merger announced at the start of the week. The merger will create the largest gold-mining company in the world, with market capitalization put at $18.3 billion.
Randgold is involved with several projects in the DNC, including a 45% ownership of the Kibali mine. Another 45% is owned by AngloGold and 10% by Société de Miniere de Kilo-Moto SA, or SOKIMO.
SOKIMO was not specific on its plans, according to a Reuters news report, but said the transaction was an attempt by foreign companies “to impose themselves, without any prior discussion, in the countries from which the resources that make up their wealth are extracted.”
Randgold issued a statement Friday saying the proposed merger would have no effect on Kibali.
“There are no provisions in the joint-venture agreement and the related documentation which give SOKIMO any rights resulting from the proposed merger,” Randgold said.
Randgold also said it had consulted “comprehensively” with SOKIMO at the board and executive levels in the days following the merger announcement, as well as with the minister of mines and other interested parties. The company said it would “continue to engage with all parties to demonstrate that this transaction was in the interests of all stakeholders.”