e424b5
Filed Pursuant to Rule 424(b)(5)
Registration
No. 333-160827
CALCULATION
OF REGISTRATION FEE
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Title of each class of
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Amount to be
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Maximum Aggregate
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Amount of
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Securities to be Registered
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Registered(1)
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Offering Price
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Registration fee(2)(3)
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Ordinary shares, par value U.S. $0.05 per share
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5,750,000
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$342,125,000
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$19,090.58
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(1) Includes 750,000 ordinary shares that the underwriters
have the option to purchase to cover over-allotments if any.
(2) Calculated in accordance with Rule 457(r) under
the Securities Act of 1933, as amended.
(3) Paid herewith.
PROSPECTUS
5,000,000 Ordinary Shares
in the form of ordinary shares or American Depositary Shares
INCORPORATED
IN JERSEY, CHANNEL ISLANDS
RANDGOLD
RESOURCES LIMITED
(organized
under the laws of Jersey, Channel Islands)
We are offering ordinary shares in the form of ordinary shares
or American Depositary Shares, or ADSs. Each ADS represents the
right to receive one of our ordinary shares. The offering of
ADSs is part of a global offering of 5,000,000 ordinary
shares, including 2,825,000 ordinary shares being offered
for sale in the United States and 2,175,000 ordinary shares
being offered for sale outside of the United States. The price
per ordinary share and ADS will be identical for both offerings.
Our ADSs are listed on the Nasdaq Global Select Market under the
symbol GOLD. Our ordinary shares are listed on the
Official List of the United Kingdom Listing Authority and traded
on the London Stock Exchange under the symbol RRS.
On July 29, 2009, the last reported price for our ADSs on
the Nasdaq Global Select Market was $59.67 per share.
Investing in our ordinary
shares or ADSs involves a high degree of risk. See Risk
Factors beginning on page 11.
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Per Share or ADS
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Total
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Initial price to public
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$
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59.50
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$
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297,500,000
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Underwriting discount
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$
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1.93375
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$
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9,668,750
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Proceeds, before expenses, to us
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$
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57.56625
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$
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287,831,250
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We have granted the underwriters a
30-day
option to purchase up to a total of 750,000 additional ordinary
shares, including ordinary shares in the form of ADSs, to cover
over-allotments, if any. If this option is exercised in full,
the proceeds before expenses to us will be $331,005,938.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
HSBC Bank plc, on behalf of the underwriters, expects to deliver
the ordinary shares and ADSs to purchasers on or about
August 4, 2009.
Sole Global Coordinator
HSBC
Joint Bookrunners
July 30, 2009
TABLE OF
CONTENTS
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iii
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iv
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iv
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1
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11
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23
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24
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38
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41
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43
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44
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51
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58
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59
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66
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80
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81
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81
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81
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81
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82
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82
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ii
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission (the
SEC) using a shelf registration process.
As Randgold Resources Limited is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act
of 1933, as amended (the Securities Act), the
registration statement became automatically effective once filed
with the SEC, allowing Randgold Resources Limited to issue
ordinary shares under this prospectus.
This prospectus provides you with a general description of our
ordinary shares and ADSs. We may provide a prospectus supplement
which details further information about the terms of the
offering or adds, updates or changes information contained in
this prospectus. If there is any inconsistency between the
information in this prospectus and any prospectus supplement,
you should rely on the information in the prospectus supplement.
The registration statement containing this prospectus, including
the exhibits to the registration statement, provides additional
information about us and the securities able to be offered under
this prospectus. The registration statement, including the
exhibits, can be read at the SEC website or at the SEC office
mentioned under the heading Where You Can Find More
Information.
You should rely only on the information incorporated by
reference or provided in this prospectus and any accompanying
prospectus supplement. We have not authorized anyone to provide
you with different information. We are not making an offer or
soliciting a purchase of these securities in any jurisdiction in
which the offer or solicitation is not authorized or in which
the person making the offer or solicitation is not qualified to
do so or to anyone to whom it is unlawful to make the offer or
solicitation. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any
date other than the date on the front of such document. Our
business, financial condition or results of operations may have
changed since that date.
In connection with the offering, HSBC Bank plc or its affiliates
acting on its behalf (including HSBC Securities (USA) Inc.) (the
Stabilizing Person), each acting on behalf of the
underwriters may engage in transactions that stabilize, maintain
or otherwise affect the market price of our ordinary shares.
These transactions may include stabilization transactions
effected in accordance with Rule 104 of Regulation M
under the Securities Exchange Act of 1934 (the Securities
Exchange Act), pursuant to which the Stabilizing Person
may make a bid for, or purchase, ordinary shares for the purpose
of stabilizing the market price. The Stabilizing Person also may
create a short position by selling more ordinary shares in
connection with the offering than the underwriters are committed
to purchase from us, and in such case may purchase ordinary
shares in the open market following completion of the offering
to cover all or a portion of such short position. In addition,
the Stabilizing Person may impose penalty bids
whereby the underwriters may reclaim from a dealer participating
in the offering the selling concession with respect to the
ordinary shares that the underwriters distributed in the
offering, but which was subsequently purchased for the accounts
of the underwriters in the open market. Any of the transactions
described in this paragraph may result in the maintenance of the
price of the ordinary shares at a level above that which might
otherwise prevail in the open market. None of the transactions
described in this paragraph is required and, if they are
undertaken, they may be discontinued at any time.
In connection with the offering, each of the underwriters and
any of their respective affiliates, acting as an investor for
its own account, may take up ordinary shares or ADSs in the
offering and in that capacity may retain, purchase or sell for
its own account such securities and any ordinary shares, ADSs or
related investments and may offer or sell such ordinary shares,
ADSs or other investments otherwise than in connection with the
offering. Accordingly, references in this document to ordinary
shares and ADSs being offered or placed should be read as
including any offering or placement of ordinary shares and ADSs
to any of the underwriters or any of their respective affiliates
acting in such capacity. None of the underwriters intends to
disclose the extent of any such investment or transactions
otherwise than in accordance with any legal or regulatory
obligation to do so.
In making an investment decision, each investor must rely on
their own examination, analysis and enquiry of our company and
the terms of the offering, including the merits and risks
involved. Neither the underwriters nor we, or any of our or
their respective representatives, is making any representation
to any offeree or purchaser of our ordinary shares or ADSs
regarding the legality of an investment in the ordinary shares
or the ADSs by such offeree
iii
or purchaser under the laws applicable to such offeree or
purchaser. Each investor should consult with his or her own
advisors as to the legal, tax, business, financial and related
aspects of a purchase of our ordinary shares and ADSs.
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this
prospectus. You must not rely on any unauthorized information or
representations. This prospectus is an offer to sell only the
ordinary shares and ADSs offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so.
The information contained in this prospectus is current only as
of its date.
A copy of this document has been delivered to the registrar of
companies in Jersey in accordance with Article 5 of the
Companies (General Provisions) (Jersey) Order 2002, as amended,
and the registrar has given, and has not withdrawn, consent to
its circulation. The Jersey Financial Services Commission has
given, and has not withdrawn, its consent under Article 2
of the Control of Borrowing (Jersey) Order 1958, as amended, to
the issue of shares by Randgold Resources Limited. It must be
distinctly understood that, in giving these consents, neither
the registrar of companies in Jersey nor the Jersey Financial
Services Commission takes any responsibility for the financial
soundness of Randgold Resources Limited or for the correctness
of any statements made, or opinions expressed, with regard to
it. If you are in any doubt about the contents of this document,
you should consult your stockbroker, bank manager, solicitor,
accountant or other financial advisor.
Randgold and its directors accept responsibility for the
completeness and accuracy of the information contained in this
prospectus. To the best knowledge and belief of the members of
our board of directors, who have taken all reasonable care to
ensure that such is the case, the information contained in this
prospectus is accurate and complete in all material respects and
no material facts, the omission of which would make misleading
any statements of fact or opinion herein, have been omitted. No
representation or warranty, express or implied, is made by the
underwriters as to the accuracy, completeness or verification of
the information set forth in this prospectus, and nothing
contained in this prospectus is, or shall be relied upon as, a
promise or representation in this respect, whether as to the
past or the future. The underwriters assume no responsibility
for its accuracy, completeness or verification and accordingly
disclaim, to the fullest extent permitted by applicable law, any
and all liability whether arising in tort, contract or otherwise
which they might otherwise be found to have in respect of this
document or any such statement.
HSBC Bank plc, Merrill Lynch International and the other
underwriters are acting exclusively for us and no one else in
connection with the offering. They will not regard any other
person (whether or not a recipient of this document) as their
respective clients in relation to the offering and will not be
responsible to anyone other than Randgold for providing the
protections afforded to their respective clients nor for giving
advice in relation to the offering or any transaction or
arrangement referred to herein.
PRESENTATION
OF FINANCIAL INFORMATION
We are incorporated under the laws of Jersey, Channel Islands
with the majority of our operations located in West Africa. Our
books of account are maintained in US dollars and our annual and
interim financial statements are prepared in accordance with
International Financial Reporting Standards as issued by the
International Accounting Standards Board (IFRS). Our
annual report on
Form 20-F
for the year ended December 31, 2008, or 2008 20-F, which
is incorporated by reference in this prospectus, includes our
audited consolidated financial statements for the years ended
December 31, 2008, 2007 and 2006 and as at
December 31, 2008 and 2007. Those financial statements are
prepared in accordance with IFRS and, except where otherwise
indicated, are presented in U.S. Dollars. We have also
included in the 2008 20-F the audited financial statements of
Société des Mines de Morila SA, or Morila SA for the
years ended December 31, 2008, 2007 and 2006 and as at
December 31, 2008 and 2007. The financial statements of
Morila SA included in the 2008 20-F have been prepared in
accordance with IFRS and in addition, except where otherwise
indicated, are presented in US dollars.
FORWARD-LOOKING
STATEMENTS
This prospectus, including the sections herein and in our 2008
20-F, which is incorporated by reference in this prospectus,
entitled Prospectus Summary, Risk
Factors, Operating and Financial Review and
Prospects and Business, contains
forward-looking information. In some cases, you can identify
forward-looking statements by
iv
phrases such as in our view, we cannot assure
you, or there is no way to anticipate with
certainty as well as by terminology such as
may, will, should,
expects, intends, plans,
objectives, goals, aims,
projects, forecasts,
possible, seeks, could,
might, likely, enable,
anticipates, believes,
estimates, predicts,
potential or continue, or the negative
of these terms or other comparable terminology. These statements
are subject to risks and constitute statements of expectation,
intent and anticipation, and may be inaccurate as a number of
factors could cause actual events or results to differ, in some
instances, materially. In evaluating these statements, you
should specifically consider various factors, including the
risks outlined under Risk Factors. These factors may
cause our actual results to differ materially from any
forward-looking statement. Although we believe that the
expectations reflected in the forwarding-looking statements are
reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.
Except as required by law, or unless required to do so by the
Listing Rules of the UK Listing Authority, we undertake no
obligation to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances
after the date of this prospectus or to reflect the occurrence
of unanticipated events.
v
PROSPECTUS
SUMMARY
This summary highlights the material information contained
elsewhere in this prospectus. You should read the entire
prospectus, especially the discussion of risks of investing in
our ADSs and ordinary shares described under Risk
Factors beginning on page 11 of this prospectus, as
well as our 2008 20-F, which is incorporated by reference in
this prospectus, carefully before deciding to buy our ADSs or
ordinary shares. Unless otherwise indicated, all references in
this prospectus to Randgold, we,
our and us, or words of similar import,
refer to Randgold Resources Limited, including its subsidiaries
and affiliated companies.
Our
Business
We engage in gold mining, exploration and related activities.
Our activities are focused on West and East Africa, some of the
most promising areas for gold discovery in the world. In Mali,
we have an 80% controlling interest in the Loulo mine through
Somilo SA. The Loulo mine is currently mining from two large
open pits, several smaller satellite pits and one underground
mine and is developing a further underground mine. We also own
50% of Morila Limited, which in turn owns 80% of Morila SA, the
owner of the Morila mine in Mali. In addition, we own an
effective 84% controlling interest in the development stage
Tongon project located in the neighboring country of Côte
dIvoire, which is under construction and anticipated to be
in production by the end of 2010. We also own an effective 83%
controlling interest in the Massawa project in Senegal where we
completed a scoping study in March 2009, and where we have now
commenced a prefeasibility study which is expected to be
completed by the end of 2009. We recently announced a new
discovery on our Loulo permit, Gounkoto, which is located 20
kilometers south of the existing mine. We also have exploration
permits and licenses covering substantial areas in Mali,
Côte dIvoire, Burkina Faso, Ghana, Senegal and
Tanzania. At December 31, 2008, we declared proven and
probable reserves of 8.87 million ounces attributable to
our percentage ownership interests in Loulo, Morila, and Tongon.
The following table summarizes our declared reserves at our
mines and the Tongon project as of December 31, 2008:
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Attributable
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Proven Reserves
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Probable Reserves
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Total Reserves
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Gold*
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Tonnes
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Grade
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Gold
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Tonnes
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Grade
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Gold
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Tonnes
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Grade
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Gold
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Gold
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Operation/Project
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(Mt)
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(g/t)
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(Moz)
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(Mt)
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(g/t)
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(Moz)
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(Mt)
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(g/t)
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(Moz)
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(Moz)
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Morila *
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13.74
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2.02
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0.89
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6.88
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1.14
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0.25
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20.62
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1.72
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1.14
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0.46
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Loulo
+*
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7.08
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3.38
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0.77
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43.51
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4.60
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6.43
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50.59
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4.42
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7.20
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5.76
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Tongon *
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38.25
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2.57
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3.16
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38.25
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2.57
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3.16
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2.66
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Total:
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8.87
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Our attributable share of Morila is 40%; Loulo, 80%; and Tongon,
84%. |
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Includes Loulo underground mine. |
Our strategy is to create value by finding, developing and
operating profitable gold mines for all our stakeholders. We
seek to discover significant gold deposits, either from our own
phased exploration programs or the acquisition of early stage to
mature exploration programs. We actively manage both our
portfolio of exploration and development properties and our risk
exposure to any particular geographical area. We also routinely
review opportunities to acquire development projects and
existing mining operations and companies.
Loulo
In February 2004, we announced that we would develop a new mine
at Loulo in western Mali. In 2005, we commenced open pit mining
operations at the Gara and Yalea pits. In 2008, its third year
of production, the Loulo mine produced 258,095 ounces of gold at
a total cash cost of $511 per ounce. We estimate that the mine
will produce approximately 360,000 ounces in 2009. We currently
anticipate that mining at Loulo will continue through 2026.
We commenced development of the Yalea underground mine in August
2006 and first ore was accessed in April 2008 with full
production scheduled for the end of 2009. We anticipate that we
will commence development of Loulos second underground
mine, Gara, in the first quarter of 2010 with first ore
scheduled to be delivered to the plant at the end of that year.
1
The focus of exploration at Loulo is to continue to explore and
discover additional orebodies within the 372 square
kilometer permit. To date, we have identified numerous
additional targets that are subject to further exploration and
drilling, including one significant evaluation stage target,
Gounkoto.
Gounkoto
Gounkoto is located 20 kilometers south of Loulos existing
mining operations. The target is underlain by a 2 kilometer long
north-northwest trending plus 30ppb gold in soil anomaly.
Initial follow up work consisted of lithosampling which returned
a number of strongly mineralized results (24.6g/t, 83.8g/t,
48.6g/t and 7.3g/t). The initial sample locations were
subsequently trenched and results confirmed the prospectivity of
the target (trench FRT03: 9.70 meters at 15.26g/t and trench
FRT05: 35.75 meters at 10.66g/t). Nineteen diamond drill holes
and nine reverse circulation, or RC, boreholes have been
completed, which included two initial reconnaissance diamond
drill holes to provide information on the bedrock geology,
structure, alteration and mineralization to help assess the
potential of this target.
Diamond drill hole FRDH01 was drilled under trench FRT05 and
intersected 46.60 meters at 13.63g/t from 65.70 meters
(including 7.40 meters at 13.78g/t from 65.70 meters and 14
meters at 33.40g/t from 95 meters).
Diamond drill hole FRDH005 intersected 60.17 meters at 16.53 g/t
from 126 meters (including 36.40 meters at 25.83 g/t), 200
meters along strike to the north of diamond drill hole FRDH01 in
the same heavily altered, consistently mineralized structure.
Results from diamond drill hole FRDH06, drilled another 225
meters further north, returned an average grade of 43.52 g/t
over 10.9 meters.
After giving effect to infill drilling in the second quarter of
2009, in total, the weighted averages for the true widths and
grade at Gounkoto, calculated from the drill intersections
reported from the main mineralized zone which lies between
diamond drill hole FRDH01 and FRDH02 over 1,072 meters of strike
length is now 18.26 meters @ 9.93 g/t. We expect to complete a
scoping study on the Gounkoto project by the end of the third
quarter of 2009.
Morila
In 1996, we discovered the Morila deposit, which we financed and
developed and has been our major gold producing asset to date.
Since production began in October 2000, Morila has produced more
than 5 million ounces of gold at a total average cash cost
of $187 per ounce. Morilas total production for 2008 was
425,828 ounces at a cash cost of $400 per ounce. Consistent with
the mine plan, Morila ceased in pit mining in April 2009 and is
currently processing lower grade stockpiles, which will continue
through 2013.
Outside of the Morila joint venture, we hold exploration permits
covering 382 square kilometers in the Morila region, where
we are engaged in early stage exploration work.
Tongon
The Tongon project is located within the Nielle exploration
permit in the north of Côte dIvoire, 55 kilometers
south of the border with Mali.
We have initiated a 433 hole, 39,099 meter advanced grade
control program over the planned pits of the southern and
northern zones, prior to the start of mining which is scheduled
for early 2010. We have commenced construction and agreed on the
new mining area with the government. The final government decree
for the issuance of the mining license has been drafted, and we
anticipate that it will be signed at an inter-ministerial
meeting scheduled in August 2009.
The financial analysis shown below is based on costs at
September 2008, when the related feasibility study was
completed. The key parameters of the study are summarized below:
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A flat gold price of $800 per ounce has been used for modelling
purposes, with sensitivities applied from $600 to $1,000 per
ounce.
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Total ore mined of 38.25 Mt at a strip ratio of 4.3:1 to give
total tonnes mined of 203 Mt and total contained gold of 3.16
Mozs.
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2
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Mining costs average of $3.03 per tonne over the Life of Mine.
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Mill throughput of 300,000 tonnes per month.
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Plant costs average of $12.55 per tonne.
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General and administrative costs of $2.90 per tonne over Life of
Mine.
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Capital cost of $280 million.
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Gold production is projected to build up to average over 290,000
ounces in the first two years of operation and average over
270,000 ounces per annum over 10 years to give a total of
2.88 Mozs for the Life of Mine. First gold is expected to be
poured during the fourth quarter of 2010.
The focus of exploration at Tongon is to continue to explore and
discover additional orebodies within the 671 square
kilometer Nielle permit.
Massawa
We made a significant new gold discovery at our Massawa project
located in Senegal during 2008. The Massawa target was first
identified in 2007 and is located on the Main Transcurrent Shear
Zone at the contact between the Mako volcanic belt and the
Dalama sedimentary basin, in the Kounemba permit. During the
course of 2008 we drilled a total of 58 diamond drill holes for
11,500 meters to further evaluate the target and delineate the
geometry of gold mineralization. In 2009, we declared
mineralized material of 36.76Mt at 2.87 g/t at Massawa based on
the drilling.
A successful scoping study was completed for Massawa in the
first quarter of 2009 which meets all of our investment criteria
and a decision was made to advance the project to
prefeasibility. This prefeasibility program is concentrating on
4 kilometers of continuous mineralization which is part of a
much larger (8 kilometer long) mineralized trend, which is open
in all directions. Surrounding the Massawa target are a number
of untested soil anomalies and conceptual targets.
Mineralization occurs in up to five sub-parallel structures
where fluids have exploited an intense zone of brittle/ductile
deformation at the contact between a volcaniclastic and
sedimentary unit, however at present only the largest structure
is being modeled for resource purposes. In total, 32,500 meters
of drilling have now been completed for the prefeasibility study.
The latest phase of work has confirmed the existing geological
interpretations, including three zones of mineralization. The N2
zone averages 9.9 meters wide at a grade of 7g/t over an 820
meter strike length, and hosts the most discrete and continuous
zone of mineralization defined to date at Massawa, including the
following significant diamond drill hole intersections received
in the second quarter of 2009: MWDDH097: 11 meters at 16.09g/t,
MWDDH101: 10.9 meters at 10.22g/t, MWDDH103: 17.2 meters at
7.47g/t, MWDDH106: 13.35 meters at 9.62g/t and MWDDH109: 9.2
meters at 16.4g/t.
The N1 zone is located to the south of N2 zone and, while
structurally more complex, is revealing more consistent gold
mineralization through infill drilling than previously
recognized. The N1 zone has been divided into two zones: a
northern zone which averages 10.23 meters wide at a grade of
3.45g/t over a 388 meter length and a southern zone averaging
5.75 meters wide at a grade of 4.34g/t over a 363 meter length.
The Central Zone, which is the most complex of the three zones,
averages 10 meters wide at an average grade of 5.8g/t over 1,500
meter strike and includes a number of high-grade intersections
containing visible gold mineralization, including diamond drill
hole MWDDH198: 10.3 meters at 76g/t (including 0.8 meters at
947g/t).
Further geotechnical, metallurgical and mining studies,
optimizations and designs, together with environmental and
social economic baseline studies, are planned to complete the
prefeasibility report by the end of 2009.
While the exploration work concentrated on Massawa during 2008,
the Mako Belt as a whole is highly prospective and, in addition
to Massawa, there are a number of satellite targets requiring
follow up exploration. These include the Bakan Corridor, Sofia
and Delaya. However, Massawa remains our strategic priority.
3
If the results of the prefeasibility study meet our investment
criteria and the board determines to proceed with a feasibility
study that ultimately supports the development of a new mine, we
believe that construction at Massawa could begin following
completion of our Tongon project in 2011.
Exploration
We have an extensive portfolio of exploration projects in both
West and East Africa. In 2008, we concentrated our exploration
activities on the extension of known orebodies and on the
discovery of new orebodies both at producing mines and
exploration sites. We continued with our strategy to expand our
footprint in Africa, including newly emerging countries. We are
exploring in six African countries with a portfolio of 184
targets on 11,860 square kilometers of groundholding. Our
business strategy of organic growth through exploration has been
validated by our discovery and development track record,
including the Morila and Loulo mines, the Tongon project and the
Massawa and Gounkoto discoveries. In addition to Gounkoto and
Massawa, our exploration program involves the following:
|
|
|
|
|
Following the successful consolidation of a 1,400 km2 land
package in the Loulo district straddling the highly
prospective Senegal-Mali shear zone a
helicopter-borne VTEM electromagnetic and magnetic survey has
been flown. This work has improved the geological and structural
framework of the district and has highlighted large intrusive
bodies, extensive folding and large scale boudinage structures.
Weak anomalies were also detected over the orebodies and a
number of look-alike responses along the known structures in the
area are being studied. The interpretation also provided more
information on the nature of the extensive iron alteration
system in Senegal and across the border in Mali.
|
|
|
|
In Côte dIvoire, the exploration emphasis has shifted
to the discovery of new ounces close to the existing orebodies,
as well as the development of targets further afield.
|
|
|
|
We are expanding our exploration horizons to encompass the
prospective rocks of the Congo Craton, which ranges from the
well known deposits of Tanzania through the east of the
Democratic Republic of Congo (DRC) and the Central
African Republic to Cameroon.
|
|
|
|
The current financial crisis and its associated credit squeeze
have generated potentially value-accretive opportunities in the
Congro Craton as well as in West Africa as companies,
particularly juniors, run short of funds to develop their
projects. We are considering a number of these with a view to
possibly acquiring or participating in assets which meet our
investment criteria. Such external opportunities will be rated
against our own organic growth prospects.
|
Recent
Developments
On July 16, 2009 we announced that we have approached the
board of directors of Moto Goldmines Limited (Moto),
a Canadian company with gold mining operations in the DRC, and
proposed to enter into an agreement with Moto providing for the
exchange of each outstanding common share of Moto for the
equivalent of C$5.00 per share (as at July 15, 2009) (the
Proposed Transaction). Under the Proposed
Transaction, Moto shareholders would receive 0.07061 of an
ordinary share of Randgold (or, where applicable, 0.07061 of an
ADS of Randgold) per Moto share. In addition, Moto shareholders
would be provided the option to elect to receive (in lieu of
Randgold shares or ADSs) cash consideration of $4.47 per Moto
share (C$5.00 based on the noon exchange rate published by the
Bank of Canada on July 15, 2009) in respect of all or
some of their Moto shares, subject to proration based on an
aggregate maximum cash amount payable to all Moto shareholders
under the Proposed Transaction of $244 million. Assuming
full take-up
of the cash alternative we would expect to issue a total of
approximately 3.9 million shares (including shares
represented by ADSs) and pay a total cash amount of
approximately $244 million to Moto shareholders. If no Moto
shareholder elects to take the cash alternative, we would expect
to issue approximately 7.8 million shares (including shares
represented by ADSs).
We and AngloGold Ashanti Limited (AngloGold Ashanti)
have agreed to cooperate with respect to the Proposed
Transaction and AngloGold Ashanti has agreed to fully fund the
cash alternative in partial payment for an indirect 50% interest
in Moto, which it would acquire upon completion of the Proposed
Transaction. Upon completion of the Proposed Transaction, we
would enter into a joint venture agreement with AngloGold
Ashanti under which AngloGold Ashanti would be jointly
responsible with us for funding the development of the gold
project in the DRC held by Moto (the Moto Gold
Project). We would be appointed operator of the Moto Gold
Project.
4
Among other customary closing conditions, the Proposed
Transaction is subject to Moto terminating its current agreement
(the Red Back Agreement) dated June 1, 2009
between Red Back Mining, Inc. and Moto, as amended effective
June 26, 2009, we and Moto entering into a definitive
agreement and Moto announcing its recommendation of the Proposed
Transaction.
As announced on July 27, 2009, the board of Moto has
formally confirmed that our proposed offer is superior to the
earlier offer from Red Back, and has given Red Back a period of
five business days to offer to amend the terms of their offer.
Further, we have executed an irrevocable commitment to enter
into an arrangement agreement (the Arrangement
Agreement) to implement the Proposed Transaction, provided
that Red Back does not match the Proposed Transaction by the end
of the day (12:00 midnight (Vancouver time)) on August 4,
2009.
Under the terms of the Arrangement Agreement, the Proposed
Transaction would be carried out by way of statutory plan of
arrangement under the British Columbia Business Corporations
Act, pursuant to which each outstanding common share of Moto
will be exchanged for Randgold ordinary shares, ADSs or cash, as
described in the first paragraph of this subsection. Moto would
apply to the Supreme Court of British Columbia for an interim
order with respect to the terms and conditions of the
arrangement, and thereafter prepare a shareholders meeting
circular and convene a meeting of its shareholders in accordance
with the interim order to seek shareholder approval of the terms
of the arrangement.
The Arrangement Agreement includes customary and substantially
mutual representations and warranties of Randgold and Moto, as
well as customary interim covenants, including, among others, a
covenant by Moto not to solicit alternative business combination
transactions or enter into discussions concerning, or provide
information in connection with, an alternative business
combination transaction, subject to a fiduciary-out
exception, and not to accept any superior proposal
without providing Randgold the opportunity to match the proposal.
The Arrangement Agreement sets forth a number of closing
conditions, including the approval of the arrangement by the
shareholders of Moto, the receipt of a final order from the
Supreme Court of British Columbia approving the arrangement, and
other customary closing conditions.
The Arrangement Agreement contains certain termination rights
for both Randgold and Moto. Upon termination of the Arrangement
Agreement under certain specified circumstances, Moto may be
required to pay Randgold a termination fee of
$14.6 million; under other specified circumstances,
Randgold may be required to reimburse Motos expenses up to
$2.0 million, and under other specified circumstances, Moto
may request that Randgold reimburse Moto the amount of the
termination fee under the Red Back Agreement.
Pursuant to the Red Back Agreement, Red Back has the right, but
not the obligation, to offer to amend the terms of the Red Back
Agreement within five business days ending by the end of the day
(12:00 midnight (Vancouver time)) on August 4, 2009 (the
Response Period). Under the Irrevocable Commitment,
if prior to expiry of the Response Period, Red Back does not
offer to amend the terms of the Red Back Agreement or notifies
Moto that it has determined not to offer to amend the terms of
the Red Back Agreement, Randgold has undertaken to enter into
the Arrangement Agreement. The Irrevocable Commitment is subject
to customary termination rights, including no occurrence of a
material adverse change affecting Moto. If Red Back amends the
terms of the Red Back Agreement prior to expiry of the Response
Period and the board of Moto determines that the Proposed
Transaction no longer constitutes a Superior Proposal, the
Irrevocable Commitment will expire.
Shareholders of Moto representing an aggregate of
39.4 million shares, or 36.1% of the issued and outstanding
common shares of Moto, have agreed to support the Proposed
Transaction. In addition, we have received formal written
consent for the Proposed Transaction from the Government of the
DRC.
Motos principal asset is its 70% interest in the Moto Gold
Project. The Moto Gold Project is a joint venture between Moto
and a DRC state-owned company, Offices des Mines dOr de
Kilo-Moto (Okimo), and is located in the Moto Gold
Camp in the north east of the Democratic Republic of Congo,
570km north east of the city of Kisangani and 150 kms west of
the Ugandan border town of Arua. The consolidated lease covers
an area of approximately 1,841sq kms and activities to date have
primarily focused on the 35 sq kms of the area surrounding the
old Durba gold mine.
5
On March 2, 2009, Moto reported that it completed an
optimized feasibility study that significantly enhances the
mineral reserves.
Moto is still at the development stage and reports that it
currently has no sales revenue. Its principal focus for 2009 is
to progress the Moto Gold Project.
The information above is based on publicly available information
on Moto including its public announcements and financial
reports, and we do not take any responsibility for the accuracy
of this information.
General
We develop our facilities and operations in accordance with
internationally accepted good management practices on
environmental and social issues, including World Bank and
International Council on Metal and Mining standards.
We were incorporated under the laws of Jersey, Channel Islands
in August 1995. Our principal executive offices are located at
La Motte Chambers, La Motte Street, St. Helier,
Jersey, JE1 1BJ, Channel Islands and our telephone number is +44
1534 735 333.
The
Offering
|
|
|
The global offering |
|
5,000,000 ordinary shares, in the form of ordinary shares or
ADSs, consisting of the US offering and the international
offering. |
|
The US offering |
|
2,825,000 ordinary shares, in the form of ordinary shares or
ADSs. |
|
The international offering |
|
2,175,000 ordinary shares, in the form of ordinary shares or
ADSs. |
|
Offering prices |
|
The offering prices for the US offering and the international
offering are $59.50 per ordinary share and $59.50 per ADS,
respectively. |
|
Over-allotment option |
|
750,000 ordinary shares, in the form of ordinary shares or ADSs. |
|
Lock-up |
|
We have agreed with the underwriters, subject to specified
exceptions, that for a period of 90 days after the date of
this prospectus, we will not, without the prior written consent
of HSBC Bank plc, issue or sell any of our ADSs or ordinary
shares or share capital or any securities substantially similar
to our ADSs or ordinary shares or share capital. Our executive
directors have also agreed with the underwriters that, for a
period of 90 days after the date of this prospectus, they
will not, other than in specified circumstances, dispose of any
ADSs or ordinary shares that they own without the prior written
consent of HSBC. |
|
The ADSs |
|
Each ADS represents the right to receive one ordinary share. The
ADSs are evidenced by American Depositary Receipts, or ADRs,
executed and delivered by The Bank of New York Mellon, as
depositary. |
|
Use of proceeds |
|
We expect to use the net proceeds from this offering to fund the
feasibility studies for our Gounkoto and Massawa projects; to
develop the Gounkoto and Massawa projects following approval by
our board; and for other organic and corporate opportunities,
including possible acquisitions. |
|
|
|
In addition, if we enter into the Arrangement Agreement and
consummate the acquisition of Moto, some of the net proceeds of
this offering could be used to fund the development of the Moto
Gold Project. |
6
|
|
|
Listing and trading |
|
The ADSs are listed and traded on the Nasdaq Global Select
Market and our ordinary shares are listed on the Official List
of the United Kingdom Listing Authority and traded on the London
Stock Exchange. |
|
Symbol of the ADSs on the Nasdaq Global Select
Market |
|
GOLD |
|
Symbol of the ordinary shares on the London Stock
Exchange |
|
RRS |
|
Securities outstanding after the offering |
|
81,788,150 ordinary shares. These amounts do not include: |
|
|
|
outstanding options to purchase 2,393,770 ordinary
shares;
|
|
|
|
2,727,456 shares available for issuance under
our share option scheme;
|
|
|
|
an additional 750,000 shares available for
issuance under our share option scheme after giving effect to
this offering;
|
|
|
|
shares to be issued pursuant to our Restricted Share
Plan; or
|
|
|
|
ordinary shares or ADSs that would be issued if we
enter into the Arrangement Agreement and consummate the
acquisition of Moto.
|
|
Risk factors |
|
For a discussion of some factors that you should carefully
consider in connection with an investment in the ordinary shares
or the ADSs, see Risk Factors. |
7
Summary
Consolidated Financial and Operating Data
Our 2008 20-F, which is incorporated herein by reference,
includes our audited consolidated financial statements for the
years ended December 31, 2008, 2007 and 2006 and as at
December 31, 2008 and 2007. The financial data presented
below is extracted or derived from those financial statements.
The following summary unaudited historical consolidated
financial data for the six months ended June 30, 2009 and
2008 and as at June 30, 2009, have been derived from our
unaudited condensed consolidated interim financial statements,
including the related notes that appear elsewhere in this
prospectus. Historical financial data is not necessarily
indicative of our future results. We encourage you to read this
summary in conjunction with our Operating and Financial
Review and Prospects included elsewhere in this prospectus
and the consolidated financial statements and condensed
consolidated interim financial statements that are incorporated
into or appear in this prospectus, respectively, including the
related notes to those financial statements.
The financial data has been prepared in accordance with IFRS,
unless otherwise noted.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Six Months
|
|
|
|
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
2009
|
|
2008
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
2008
|
|
2007
|
|
2006
|
|
|
(In thousands, except per share and per ounce data)
|
|
Consolidated Statement Of Comprehensive Income Data:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in accordance with IFRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
190,830
|
|
|
$
|
182,232
|
|
|
$
|
338,572
|
|
|
$
|
282,805
|
|
|
$
|
258,304
|
|
Profit attributable to owners of the parent
|
|
|
25,998
|
|
|
|
33,877
|
|
|
|
41,569
|
|
|
|
42,041
|
|
|
|
47,564
|
|
Basic earnings per share($)
|
|
|
0.34
|
|
|
|
0.44
|
|
|
|
0.54
|
|
|
|
0.60
|
|
|
|
0.70
|
|
Diluted earnings per share($)
|
|
|
0.33
|
|
|
|
0.43
|
|
|
|
0.54
|
|
|
|
0.60
|
|
|
|
0.69
|
|
Weighted average number of shares used in computation of basic
earnings per share *(1)
|
|
|
76,676,161
|
|
|
|
76,194,674
|
|
|
|
76,300,116
|
|
|
|
69,588,983
|
|
|
|
68,391,792
|
|
Weighted average number of shares used in computation of diluted
earnings per share *(1)
|
|
|
78,029,053
|
|
|
|
77,933,863
|
|
|
|
77,540,198
|
|
|
|
70,271,915
|
|
|
|
69,331,035
|
|
Cash dividends declared per ordinary share#
|
|
$
|
|
|
|
$
|
|
|
|
$
|
0.13
|
|
|
$
|
0.12
|
|
|
$
|
0.10
|
|
Other data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit from operations(2)
|
|
$
|
48,240
|
|
|
$
|
46,805
|
|
|
$
|
75,937
|
|
|
$
|
63,539
|
|
|
$
|
71,616
|
|
Total cash costs per ounce(2)
|
|
$
|
469
|
|
|
$
|
449
|
|
|
$
|
467
|
|
|
$
|
356
|
|
|
$
|
296
|
|
|
|
|
* |
|
Reflects adjustments resulting from the sub-division of shares. |
|
# |
|
There were no dividends declared in respect of the years ended
December 31, 2005 and December 31, 2004. |
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2009
|
|
At December 31,
|
|
At December 31,
|
|
|
(Unaudited)
|
|
2008
|
|
2007
|
|
|
(In thousands)
|
|
Consolidated Statement of Financial Position Data:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in accordance with IFRS
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
857,959
|
|
|
$
|
821,442
|
|
|
$
|
780,719
|
|
Long-term borrowings
|
|
|
797
|
|
|
|
1,284
|
|
|
|
2,773
|
|
Share capital(3)
|
|
|
3,841
|
|
|
|
3,827
|
|
|
|
3,809
|
|
Share premium
|
|
|
459,829
|
|
|
|
455,974
|
|
|
|
450,814
|
|
Retained earnings(3)
|
|
|
262,013
|
|
|
|
245,982
|
|
|
|
213,567
|
|
Other reserves
|
|
|
(13,075
|
)
|
|
|
(31,387
|
)
|
|
|
(69,391
|
)
|
Equity attributable to owners of the parent(3)
|
|
|
712,608
|
|
|
|
674,396
|
|
|
|
598,799
|
|
|
|
|
1. |
|
Effective June 11, 2004, we undertook a split of our
ordinary shares, which increased our issued share capital from
29,273,685 to 58,547,370 ordinary shares. In connection with
this share split, our ordinary shareholders (owners of the
parent) of record on June 11, 2004 received two $0.05
ordinary shares for every one $0.10 ordinary share they held. |
|
2. |
|
Randgold Resources has identified certain measures that it
believes will assist understanding of the performance of the
business. As these measures are not defined under IFRS
(non-GAAP), they may not be directly comparable with
other companies adjusted measures. Such non-GAAP measures
are not intended to be a substitute for, or superior to, any
IFRS measures or performance, but management has included them
as these are considered to be important comparables and key
measures used within the business for assessing performance.
These measures are further explained below. Profit from
operations is a non-GAAP measure. We calculate profit from
operations as profit before income tax, excluding finance
(costs)/income-net and profit on the sale of Syama. Total cost
of producing gold is a non-GAAP measure. We calculate the total
cost of producing gold as total costs less exploration and
corporate expenditure and other expenses. Total cash costs and
total cash costs per ounce are also non-GAAP measures. We have
calculated total cash costs and total cash costs per ounce using
guidance issued by the Gold Institute. The Gold Institute was a
non-profit industry association comprised of leading gold
producers, refiners, bullion suppliers and manufacturers. This
institute is now 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
Institutes guidance, include mine production, transport
and refinery costs, general and administrative costs, movement
in production inventories and ore stockpiles, transfers to and
from deferred stripping where relevant, and royalties. |
|
3. |
|
As discussed in Note 2 to our unaudited condensed
consolidated interim financial statements, contained elsewhere
in this prospectus, as a consequence of adopting
Amendments to IAS 1 Presentation of financial statements:
A revised presentation, amendments have been made to
affect the presentation of owners changes in equity and of
comprehensive income. The names of the primary statements have
also been amended. The Consolidated income statement
is now called the Consolidated statement of comprehensive
income, the Consolidated balance sheet is now
called the Consolidated statement of financial
position and the Statement of consolidated cash
flows is now called the Consolidated statement of
cash flows. The following balance sheet items have also
been renamed: Accounts payable and accrued
liabilities is now Trade and other payables,
Ordinary shares is now Share capital and
Accumulated profits is now Retained
earnings. IAS 1 does not change the recognition,
measurement or disclosure of specific transactions and other
events required by other IFRSs. All financial data disclosed
herein, of prior periods, has been renamed using the terminology
in IAS 1. |
Total cash costs per ounce are calculated by dividing total cash
costs, as determined using the Gold Institute guidance, by gold
ounces produced for the periods presented. We have calculated
total cash costs and total cash costs per ounce on a consistent
basis for all periods presented. Total cash costs and total cash
costs per ounce should not be considered by investors as an
alternative to net profit attributable to owners of the parent,
as an alternative to other IFRS measures or an indicator of our
performance. The data does not have a meaning prescribed by IFRS
and
9
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 and total cash costs per
ounce, 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, we believe that total cash
costs per ounce is a useful indicator to investors and
management of a mining companys performance as it provides
an indication of a companys profitability and efficiency,
the trends in cash costs as the companys operations
mature, and a benchmark of performance to allow for comparison
against other companies. Our discussion and analysis in the 2008
20-F is focused on the total cash cost measure as
defined by the Gold Institute.
The following table reconciles the costs of producing gold,
derived from income statement data prepared in accordance with
IFRS, and reconciles this cost of producing gold to total cash
costs as defined by the Gold Institutes guidance, as
non-GAAP measures, for each of the periods set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
|
Six Months
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
2009
|
|
|
2008
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands, except ounce and per ounce data)
|
|
|
Mine production costs
|
|
$
|
85,986
|
|
|
$
|
92,952
|
|
|
$
|
186,377
|
|
|
$
|
136,312
|
|
|
$
|
115,217
|
|
Movement in production inventory and ore stockpiles
|
|
|
1,600
|
|
|
|
(12,754
|
)
|
|
|
(21,865
|
)
|
|
|
(11,534
|
)
|
|
|
(13,373
|
)
|
Depreciation and amortization
|
|
|
13,311
|
|
|
|
11,390
|
|
|
|
21,333
|
|
|
|
20,987
|
|
|
|
22,844
|
|
Other mining and processing costs
|
|
|
8,635
|
|
|
|
6,490
|
|
|
|
13,675
|
|
|
|
13,638
|
|
|
|
13,006
|
|
Transport and refining costs
|
|
|
778
|
|
|
|
1,234
|
|
|
|
2,053
|
|
|
|
1,595
|
|
|
|
711
|
|
Royalties
|
|
|
11,171
|
|
|
|
10,503
|
|
|
|
19,730
|
|
|
|
18,307
|
|
|
|
16,979
|
|
Elimination of inter-company sales
|
|
|
749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of producing gold (total production cost)
|
|
|
122,230
|
|
|
|
109,815
|
|
|
|
221,303
|
|
|
|
179,305
|
|
|
|
155,384
|
|
Less: Non-cash costs included in total cost of producing gold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(13,311
|
)
|
|
|
(11,390
|
)
|
|
|
(21,333
|
)
|
|
|
(20,987
|
)
|
|
|
(22,844
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs using the Gold Institutes guidance
|
|
$
|
108,919
|
|
|
$
|
98,425
|
|
|
$
|
199,970
|
|
|
$
|
158,318
|
|
|
$
|
132,540
|
|
Ounces produced*
|
|
|
231,998
|
|
|
|
219,248
|
|
|
|
428,426
|
|
|
|
444,573
|
|
|
|
448,242
|
|
Total cash cost per ounce
|
|
$
|
469
|
|
|
$
|
449
|
|
|
$
|
467
|
|
|
$
|
356
|
|
|
$
|
296
|
|
Total production cost per ounce
|
|
$
|
527
|
|
|
$
|
501
|
|
|
$
|
517
|
|
|
$
|
403
|
|
|
$
|
347
|
|
|
|
|
* |
|
40% share of Morila and 100% share of Loulo. |
10
RISK
FACTORS
In addition to the other information included or incorporated by
reference in this prospectus, you should carefully consider the
following factors, which individually or in combination could
have a material adverse effect on our business, financial
condition and results of operations. There may be additional
risks and uncertainties not presently known to us, or that we
currently see as immaterial, which may also harm our business.
If any of the risks or uncertainties described below or any such
additional risks and uncertainties actually occur, our business,
results of operations and financial condition could be
materially and adversely affected. In this case, the trading
price of our ordinary shares and American Depositary Shares, or
ADSs, could decline and you might lose all or part of your
investment.
Risks
Relating to Our Operations
The
profitability of our operations, and the cash flows generated by
our operations, are affected by changes in the market price for
gold which in the past has fluctuated widely.
Substantially all of our revenue and cash flows have come from
the sale of gold. Historically, the market price for gold has
fluctuated widely and has been affected by numerous factors,
over which we have no control, including:
|
|
|
|
|
the demand for gold for investment purposes, industrial uses and
for use in jewelry;
|
|
|
|
international or regional political and economic trends;
|
|
|
|
the strength of the US dollar, the currency in which gold prices
generally are quoted, and of other currencies;
|
|
|
|
market expectations regarding inflation rates;
|
|
|
|
interest rates;
|
|
|
|
speculative activities;
|
|
|
|
actual or expected purchases and sales of gold bullion holdings
by central banks, the International Monetary Fund, or other
large gold bullion holders or dealers;
|
|
|
|
hedging activities by gold producers; and
|
|
|
|
the production and cost levels for gold in major gold-producing
nations.
|
The volatility of gold prices is illustrated in the following
table, which shows the approximate annual high, low and average
of the afternoon London Bullion Market fixing price of gold in
US dollars for the past ten years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price Per Ounce ($)
|
Year
|
|
High
|
|
Low
|
|
Average
|
|
1999
|
|
|
326
|
|
|
|
253
|
|
|
|
279
|
|
2000
|
|
|
313
|
|
|
|
264
|
|
|
|
279
|
|
2001
|
|
|
293
|
|
|
|
256
|
|
|
|
271
|
|
2002
|
|
|
349
|
|
|
|
278
|
|
|
|
310
|
|
2003
|
|
|
416
|
|
|
|
320
|
|
|
|
363
|
|
2004
|
|
|
454
|
|
|
|
375
|
|
|
|
409
|
|
2005
|
|
|
537
|
|
|
|
411
|
|
|
|
444
|
|
2006
|
|
|
725
|
|
|
|
525
|
|
|
|
604
|
|
2007
|
|
|
841
|
|
|
|
608
|
|
|
|
695
|
|
2008
|
|
|
1,011
|
|
|
|
712
|
|
|
|
871
|
|
2009 (through July 21)
|
|
|
990
|
|
|
|
813
|
|
|
|
917
|
|
If gold prices should fall below and remain below our cost of
production for any sustained period we may experience losses,
and if gold prices should fall below our cash costs of
production we may be forced to curtail or suspend some or all of
our mining operations. In addition, we would also have to assess
the economic impact of low gold prices on our ability to recover
from any losses we may incur during that period and on our
ability to maintain
11
adequate reserves. Our total cash cost per ounce of gold sold
was $467 in the year ended December 31, 2008, $356 in the
year ended December 31, 2007, and $296 in the year ended
December 31, 2006. We expect that Morilas cash costs
per ounce will rise as the life of the mine advances as a result
of expected declining grade, which will adversely affect our
profitability in the absence of any mitigating factors. The high
grades expected from the underground mining at Loulo will, in
the absence of any other increases, have a positive impact on
unit costs.
Our
mining operations may yield less gold under actual production
conditions than indicated by our gold reserve figures, which are
estimates based on a number of assumptions, including
assumptions as to mining and recovery factors, production costs
and the price of gold.
The ore reserve estimates contained in this prospectus are
estimates of the mill delivered quantity and grade of gold in
our deposits and stockpiles. They represent the amount of gold
that we believe can be mined, processed and sold at prices
sufficient to recover our estimated total cash costs of
production, remaining investment and anticipated additional
capital expenditures. Our ore reserves are estimated based upon
many factors, including:
|
|
|
|
|
the results of exploratory drilling and an ongoing sampling of
the orebodies;
|
|
|
|
past experience with mining properties;
|
|
|
|
gold price; and
|
|
|
|
operating costs.
|
Because our ore reserve estimates are calculated based on
current estimates of future production costs and gold prices,
they should not be interpreted as assurances of the economic
life of our gold deposits or the profitability of our future
operations.
Reserve estimates may require revisions based on actual
production experience. Further, a sustained decline in the
market price of gold may render the recovery of ore reserves
containing relatively lower grades of gold mineralization
uneconomical and ultimately result in a restatement of reserves.
The failure of the reserves to meet our recovery expectations
may have a materially adverse effect on our business, financial
condition and results of operations.
The
profitability of operations and the cash flows generated by
these operations are significantly affected by the fluctuations
in the price, cost and supply of inputs.
Fuel, power and consumables, including diesel, steel, chemical
reagents, explosives and tires, form a relatively large part of
our operating costs. The cost of these consumables is impacted
to varying degrees by fluctuations in the price of oil, exchange
rates and a shortage of supplies.
Such fluctuations have a significant impact upon our operating
costs and capital expenditure estimates and, in the absence of
other economic fluctuations, could result in significant changes
in the total expenditure estimates for mining projects, new and
existing, and could even render certain projects non-viable.
Any
appreciation of the currencies in which we incur costs against
the US dollar could adversely affect our results of
operations.
While our revenue is derived from the sale of gold in US
dollars, a significant portion of our input costs are incurred
in currencies other than the dollar, primarily Euro, South
African Rand and Communauté Financière Africaine
franc. Accordingly, any appreciation in such other currencies
could adversely affect our results of operations.
Our
results of operations have been adversely affected by increases
in fuel prices, and we would be adversely affected by future
increases in fuel prices or disruptions in the supply of
fuel.
Our results are significantly affected by the price and
availability of fuel, which are in turn affected by a number of
factors beyond our control. Fuel prices are volatile and
increased significantly in 2008. While prices have decreased
significantly in 2009, they remain higher than historical
standards. In the year ended December 31, 2008,
12
the cost of fuel and other power generation costs comprised 35%
of our operating costs and the annual price increase of our
landed fuel was 38%.
Historically, fuel costs have been subject to wide price
fluctuations based on geopolitical factors and supply and
demand. While we do not currently anticipate a significant
reduction in fuel availability, factors beyond our control make
it impossible to predict the future availability of fuel. If
there are additional outbreaks of hostilities or other conflicts
in oil producing areas or elsewhere, or a reduction in refining
capacity (due to weather events, for example), or governmental
limits on the production or sale of fuel, or restrictions on the
transport of fuel, there could be reductions in the supply of
fuel and significant increases in the cost of fuel.
We are not parties to any agreements that protect us against
price increases or guarantee the availability of fuel. Major
reductions in the availability of fuel or significant increases
in its cost, or a continuation of current high prices for a
significant period of time, would have a material adverse impact
on us.
Our
business may be adversely affected if the Government of Mali
fails to repay Value Added Tax, or TVA, owing to Morila and
Loulo.
Our mining companies operating in Mali are exonerated by their
Establishment Conventions from paying TVA for the three years
following first commercial production. After that, TVA is
payable and reimbursable. TVA is only reclaimable insofar as it
is expended in the production of income. A key aspect in TVA
recovery is managing the completion of the Government of
Malis audit of the taxpayers payments, at which time
the Government of Mali recognizes a liability.
By December 2007, Morila had successfully concluded a
reimbursement protocol with the Government of Mali for all TVA
reimbursements it was owed up to June 2005. Morila was unable to
conclude a second protocol subsequent to December 2007, however,
and pursuant to its establishment convention, began offsetting
TVA reimbursements it was owed against corporate and other taxes
payable by Morila to the Government of Mali. As a result of the
offsets, the TVA owed by the Government of Mali to Morila
declined by $7.2 million between December 31, 2008
($12.3 million) and June 30, 2009 ($5.1 million).
Morila is in discussions with the Malian fiscal authorities in
order to ensure that the tax offsets are accurately recorded and
recognized, although we cannot assure you that the Government of
Mali will ultimately recognize the tax offsets.
At December 31, 2008, TVA owed by the Government of Mali to
Loulo stood at $1.8 million. This amount has increased by
$14.4 million to $16.2 million at June 30, 2009
due to the end of the exoneration period on November 8,
2008.
If Morila and Loulo are unable to recover these funds, or if the
tax offsets are not recognized, then their results of operations
and financial position would be adversely affected, as would
their ability to pay dividends to their shareholders.
Accordingly, our business, cash flows and financial condition
will be adversely affected if anticipated dividends are not paid.
Our
business may be adversely affected if the Government of Mali
fails to repay fuel duties owing to Morila and
Loulo.
Up to June 2005, Morila was responsible for paying to diesel
suppliers the customs duties which were then paid to the
Government of Mali. Our operations at Morila and Loulo could
claim reimbursement of these duties from the Government of Mali
on presentation of a certificate from Société
Générale de Surveillance. During the third quarter of
2003, the Government of Mali began to reduce payments to all the
mines in Mali due to irregularities involving certain small
exploration companies. The Government of Mali has since given
full exoneration from fuel duties to the mining industry so that
fuel duties are no longer payable. However, a portion of
previously paid duties remain outstanding, principally the
duties paid for the period June 2005 to December 2005. Our share
of the amounts owing to Morila was $2.1 million on
December 31, 2008 and $4 million on December 31,
2007. Amounts owing to Loulo were $0.7 million on
December 31, 2008 and $0.7 million on
December 31, 2007. At June 30, 2009, amounts owing to
Loulo were $0.7 million. At June 30, 2009,
Morilas outstanding fuel duties were offset in full
against corporate and other taxes payable by the mine.
13
If Morila and Loulo are unable to recover these amounts, or if
the amounts offset are not recognized, then their results of
operations and financial position would be adversely affected,
as would their ability to pay dividends to their shareholders.
Accordingly, our business, cash flows and financial condition
will be adversely affected if anticipated dividends are not paid.
Certain
factors may affect our ability to support the carrying value of
our property, plant and equipment, and other assets on our
balance sheet.
We review and test the carrying amount of our assets on an
annual basis when events or changes in circumstances suggest
that the net book value may not be recoverable. If there are
indications that impairment may have occurred, we prepare
estimates of expected future discounted cash flows for each
group of assets. Assets are grouped at the lowest levels for
which there are separately identifiable cash flows
(cash-generating units) for purposes of assessing impairment.
Expected future cash flows are inherently uncertain, and could
materially change over time. Such cash flows are significantly
affected by reserve and production estimates, together with
economic factors such as spot and forward gold prices, discount
rates, currency exchange rates, estimates of costs to produce
reserves and future capital expenditures.
During 2008, we recorded impairment charges against our auction
rate securities, or ARS, which is described in the following
paragraph.
We
have invested in debt instruments for which the market has
become substantially illiquid.
We have invested in debt instruments for which the market has
become substantially illiquid. We had cash and cash equivalents
of $220.0 million as of June 30, 2009. In addition, we
had available-for-sale financial assets with a carrying value of
$33.6 million as of June 30, 2009. The
available-for-sale financial assets consist of auction rate
securities, or ARS. In the third quarter of fiscal year 2007,
ARS with a cost value of $49 million failed at auctions due
to the sudden and unusual deterioration in the global credit and
capital markets, and have since experienced multiple failed
auctions. Consequently, the funds associated with these
investments will not be accessible until a successful auction
occurs, a buyer is found outside of the auction process or the
underlying securities have matured.
We made provisions against these ARS of $10.35 million in
the second half of 2008 and an additional $5.0 million in
the first six months of 2009, in each case following the
deterioration of the underlying credit ratings of the collateral
of certain of the ARS. The trading market for these instruments
has become substantially illiquid as a result of unusual
conditions in the credit markets. As these investments have been
illiquid for more than twelve months and there is no certainty
that they will become liquid within the next twelve months, the
assets have been reclassified into the non-current section of
available-for-sale financial assets to more accurately reflect
their nature. Management estimates the fair value of these
investments at each reporting period. Management applies a mark
to model valuation method. Continued uncertainties in the credit
and capital markets may result in additional impairment
provisions, which could adversely impact our financial
condition, current asset position and reported earnings.
Furthermore, there can be no assurance that we will be
successful in our actions against the bank or the individual
brokers that we have commenced.
We may
not be able to recover certain funds from MDM Ferroman (Pty)
Limited.
In August 2004, we entered into a fixed lump sum turnkey
contract for $63 million for the design, supply,
construction and commissioning of the Loulo processing plant and
infrastructure with MDM Ferroman (Pty) Ltd, or MDM. At the end
of 2005, after making advances and additional payments to MDM
totaling $26 million in excess of the contract, we
determined that MDM was unable to perform its obligations under
the MDM Contract, at which time we enforced a contractual remedy
which allowed us to act as our own general contractor and to
complete the remaining work on the Loulo project that was
required under the MDM Contract.
We believe that we are entitled to recover certain amounts from
MDM, including advances of $12.1 million (December 31,
2007: $12.1 million) included in receivables as at
December 31, 2008. Of this latter amount, $7.0 million
is secured by performance bonds and the remainder is secured by
various personal guarantees and other assets. In January 2009,
the liquidator declared and paid the first dividend of
$0.1 million from the insolvent estate, leaving an
outstanding balance of $12.0 million as at June 30,
2009.
14
As part of our efforts to recoup the monies owed to us, MDM was
put into liquidation on February 1, 2006. This resulted in
a South African Companies Act Section 417 investigation
into the business and financial activities of MDM, its
affiliated companies and their directors. The investigation was
completed and summons has been issued against those MDM
creditors deemed as preferential creditors. These legal
proceedings are continuing with pleadings having been closed and
court dates been set in the South African courts.
Our ability to recover in full the $12.0 million included
in receivables is dependent on the amounts which can be
recovered from the performance bonds, personal guarantees and
other assets provided as security. Any shortfall is expected to
be recovered from any free residue accruing to the insolvent
estate. The aggregate amount which will ultimately be recovered
cannot presently be determined. The financial statements do not
reflect any additional provision that may be required if the
$12.0 million cannot be recovered in full. Our results of
operations may be adversely affected if we are unable to recover
the amounts advanced by us to MDM. Any part of the
$12.0 million included in accounts receivable which cannot
in fact be recovered will need to be charged as an expense. The
ultimate outcome of this claim cannot presently be determined
and there is significant uncertainty surrounding the amount that
will ultimately be recovered.
We may
incur losses or lose opportunities for gains as a result of our
use of our derivative instruments to protect us against low gold
prices.
We use derivative instruments to protect the selling price of
some of our anticipated gold production at Loulo. The intended
effect of our derivative transactions is to lock in a fixed sale
price for some of our future gold production to provide some
protection against a subsequent fall in gold prices. No such
protection is in place for our production at Morila.
Derivative transactions can result in a reduction in revenue if
the instrument price is less than the market price at the time
the hedged sales are recognized. Moreover, our decision to enter
into a given instrument is based upon market assumptions. If
these assumptions are not met, significant losses or lost
opportunities for significant gains may result. In all, the use
of these instruments may result in significant losses which will
prevent us from realizing the positive impact of any subsequent
increase in the price of gold on the portion of production
covered by the instrument.
Our
underground project at Loulo, developing two mines at Yalea and
Gara, is subject to all of the risks associated with underground
mining.
Development of the underground mine at Yalea commenced in
December 2006 and first ore was mined in April 2008. These
planned mines represent our entry into the business of
underground mining. In connection with the development of the
underground mines, we must build the necessary infrastructure,
the costs of which are substantial. The underground mines may
experience unexpected problems and delays during their
development and construction. Delays in the commencement of gold
production could occur and the development costs could be larger
than expected, which could affect our results of operations and
profitability. Since the commencement of the underground
operations at Yalea, we have experienced a number of technical
challenges, principally the availability of the underground
fleet and the ability to drill and blast up holes. The
development and operation of the underground mine will be
negatively impacted should these issues continue.
The business of underground mining by its nature involves
significant risks and hazards. In particular, as the development
commences the operation could be subject to:
|
|
|
|
|
rockbursts;
|
|
|
|
seismic events;
|
|
|
|
underground fires;
|
|
|
|
cave-ins or falls of ground;
|
|
|
|
discharges of gases or toxic chemicals;
|
|
|
|
flooding;
|
15
|
|
|
|
|
accidents; and
|
|
|
|
other conditions resulting from drilling, blasting and the
removal of material from an underground mine.
|
We are at risk of experiencing any and all of these hazards. The
occurrence of any of these hazards could delay the development
of the mine, production, increase cash operating costs and
result in additional financial liability for us.
Our
success may depend on our social and environmental
performance.
Our ability to operate successfully in communities will likely
depend on our ability to develop, operate and close mines in a
manner that is consistent with the health, safety and well being
of our employees, the protection of the environment, and the
creation of long-term economic and social opportunities in the
communities in which we operate. We seek to promote improvements
in health and safety, environmental performance and community
relations. However, our ability to operate could be adversely
impacted by accidents or events detrimental (or perceived to be
detrimental) to the health, safety and well being of our
employees, the environment or the communities in which we
operate.
In July 2009, the Loulo mine experienced some disruption, caused
by a small group of disaffected people unable to secure long
term employment at the mine. The disruption resulted in some
damage to the tailings pipeline as well as to some accommodation
units and other property. All operations were suspended for
36 hours, following which all mining and processing
operations were restored and operating back at normal capacity.
We cannot assure you that similar events will not happen in the
future, or that such events will not adversely affect our
results of operations and properties.
Actual
cash costs of production, production results and economic
returns may differ significantly from those anticipated by our
feasibility studies and scoping studies for new development
projects, including Tongon.
It can take a number of years from initial feasibility studies
of a mining project until development is completed and, during
that time, the economic feasibility of production may change.
The economic feasibility of development projects is based on
many factors, including the accuracy of estimated reserves,
metallurgical recoveries, capital and operating costs and future
gold prices. The capital expenditures and time required to
develop new mines or other projects are considerable, and
changes in costs or construction schedules can affect project
economics. Thus it is possible that actual costs and economic
returns may differ materially from our estimates.
In addition, there are a number of uncertainties inherent in the
development and construction of any new mine, including:
|
|
|
|
|
the availability and timing of necessary environmental and
governmental permits;
|
|
|
|
the timing and cost necessary to construct mining and processing
facilities, which can be considerable;
|
|
|
|
the availability and cost of skilled labor, power, water and
other materials;
|
|
|
|
the accessibility of transportation and other infrastructure,
particularly in remote locations; and
|
|
|
|
the availability of funds to finance construction and
development activities.
|
At our Tongon project in Côte dIvoire, our board
approved the development of the new mine based on the strength
of a feasibility study. A final draft of the proposed mining
convention has been submitted to Côte dIvoires
Ministry of Mines and Energy and we expected to sign the
convention during the third quarter of 2009. Construction of the
mine commenced at the end of 2008 with first gold production
scheduled for the fourth quarter of 2010. We cannot provide any
assurance that the project will ultimately result in a new
commercial mining operation, or that a new commercial mining
operation will be successful.
16
We
conduct mining, development and exploration activities in
countries with developing economies and are subject to the risks
of political and economic instability associated with these
countries.
We currently conduct mining, development and exploration
activities in countries with developing economies. These
countries and other emerging markets in which we may conduct
operations have, from time to time, experienced economic or
political instability. It is difficult to predict the future
political, social and economic direction of the countries in
which we operate, and the impact government decisions may have
on our business. Any political or economic instability in the
countries in which we currently operate could have a material
and adverse effect on our business and results of operations.
The countries of Mali, Senegal, Burkina Faso, Ghana, Tanzania
and Côte dIvoire have, since independence,
experienced some form of political upheaval with varying forms
of changes of government taking place. Côte dIvoire
has experienced several years of political chaos, including an
attempted coup détat. The political situation in that
country is normalizing and national elections are anticipated in
the fourth quarter of 2009.
Goods are supplied to our operations in Mali through Ghana,
Burkina Faso and Senegal, which routings have, to date,
functioned satisfactorily. Our operations at Morila have been
adversely affected by the higher transportation costs for diesel
that now has to be delivered via Senegal. Any present or future
policy changes in the countries in which we operate may in some
way have a significant effect on our operations and interests.
The mining laws of Mali, Côte dIvoire, Senegal,
Burkina Faso, Ghana and Tanzania stipulate that, should an
economic orebody be discovered on a property subject to an
exploration permit, a permit that allows processing operations
to be undertaken must be issued to the holder. Except for
Tanzania, legislation in these countries currently provides for
the relevant government to acquire a free ownership interest,
normally of at least 10%, in any mining project. For example,
the Malian government holds a 20% interest in Morila SA and
Somilo SA, and cannot be diluted below 10%, as a result of this
type of legislation. The requirements of the various governments
as to the foreign ownership and control of mining companies may
change in a manner which adversely affects us.
If we
assume operations of the Moto Gold Project, we will be subject
to varying degrees of political and economic uncertainties
associated with operating in the DRC.
If we enter into the Arrangement Agreement and consummate the
acquisition of Moto, we will be subject to risks associated with
operating the Moto Gold Project in the DRC. The Moto Gold
Project is located in the north-east region of the DRC and is
subject to various levels of political, economic and other risks
and uncertainties associated with operating in the DRC. Some of
these risks include political and economic instability, high
rates of inflation, severely limited infrastructure, lack of law
enforcement, labor unrest, and war and civil conflict. In
addition, the Moto Gold Project is subject to the risks inherent
in operating in any foreign jurisdiction including changes in
government policy, restrictions on foreign exchange, changes in
taxation policies, and renegotiation or nullification of
existing concessions, licenses, permits and contracts.
The DRC is an impoverished country with physical and
institutional infrastructure that is in a debilitated condition.
It is in transition from a largely state-controlled economy to
one based on free market principles, and from a non-democratic
political system with a centralized ethnic power base to one
based on more democratic principles. There can be no assurance
that these changes will be effected or that the achievement of
these objectives will not have material adverse consequences for
the Moto Gold Project.
Any changes in mining or investment policies or shifts in
political attitude in the DRC may adversely affect operations
and/or
profitability of the Moto Gold Project. Operations may be
affected in varying degrees by government regulations with
respect to, but not limited to, restrictions on production,
price controls, export controls, currency remittance, income
taxes, foreign investment, maintenance of claims, environmental
legislation, land use, land claims of local people, water use
and mine safety. These changes may impact the profitability and
viability of the Moto Gold Project.
Furthermore, the Moto Gold Project is located in a remote area
of the DRC, which lacks basic infrastructure, including sources
of power, water, housing, food and transport. In order to
develop any of the mineral interests, facilities and material
necessary to support operations in the remote locations in which
they are situated must be established. The remoteness of the
mineral interests would affect the potential viability of mining
operations, as we
17
would also need to establish substantially greater sources of
power, water, physical plant and transport infrastructure than
are currently present in the area.
Moreover, the north-east region of the DRC has undergone civil
unrest and instability that could have an impact on political,
social or economic conditions in the DRC generally. The impact
of unrest and instability on political, social or economic
conditions in the DRC could result in the impairment of the
explorations, development and operations at the Moto Gold
Project.
Under
our joint venture agreement with AngloGold Ashanti, we jointly
manage Morila Limited, and any disputes with AngloGold Ashanti
over the management of Morila Limited could adversely affect our
business.
We jointly control Morila Limited with AngloGold Ashanti under a
joint venture agreement. Since February 15, 2008, we have
been responsible for the day-to-day operations of Morila,
subject to the overall management control of the Morila Limited
board. Substantially all major management decisions, including
approval of a budget for Morila, must be approved by the Morila
Limited board. We and AngloGold Ashanti retain equal control
over the board, with neither party holding a deciding vote. If a
dispute arises between us and AngloGold Ashanti with respect to
the management of Morila Limited and we are unable to amicably
resolve the dispute, we may have to participate in arbitration
or other proceeding to resolve the dispute, which could
materially and adversely affect our business.
The
use of mining contractors at certain of our operations may
expose it to delays or suspensions in mining
activities.
Mining contractors are used at Loulo and Morila to mine and
deliver ore to processing plants. These mining contractors rely
on third-party vendors to supply them with required mining
equipment, many of which have been adversely affected by the
global economic slowdown. Consequently, at these mines, we do
not own all of the mining equipment and may face disruption of
operations and incur costs and liabilities in the event that any
of the mining contractors at these mines, or any of the vendors
that supply them, has financial difficulties, or should there be
a dispute in renegotiating a mining contract, or a delay in
replacing an existing contractor.
We may
be required to seek funding from the global credit and capital
markets to develop our properties, and the recent weaknesses in
those markets could adversely affect our ability to obtain
financing and capital resources.
We require substantial funding to develop our properties, and
may be required to seek funding from the credit and capital
markets to finance these activities. Our ability to obtain
outside financing will depend upon the price of gold and the
markets perception of its future price, and other factors
outside of our control. We may not be able to obtain funding on
acceptable terms when required, or at all.
The credit and capital markets experienced significant
deterioration in 2008, including the failure of significant and
established financial institutions in the US and abroad, and may
continue to deteriorate in 2009 and beyond, all of which will
have an impact on the availability and terms of credit and
capital in the near term. If uncertainties in these markets
continue, or these markets deteriorate further, it could have a
material adverse effect on our ability to raise capital. Failure
to raise capital when needed or on reasonable terms may have a
material adverse effect on our business, financial condition and
results of operations.
We may
not pay dividends to shareholders in the near
future.
We paid our third dividend since 2007 to ordinary shareholders
in March 2009. It is our policy to pay dividends if profits and
funds are available for that purpose. Whether or not funds are
available depends on a variety of factors, including capital
expenditures. We cannot guarantee that dividends will be paid in
the future.
If we
are unable to attract and retain key personnel our business may
be harmed.
Our ability to bring additional mineral properties into
production and explore our extensive portfolio of mineral rights
will depend, in large part, upon the skills and efforts of a
small group of management and technical
18
personnel, including D. Mark Bristow, our Chief Executive
Officer. If we are not successful in retaining or attracting
highly qualified individuals in key management positions our
business may be harmed. The loss of any of our key personnel
could adversely impact our ability to execute our business plan.
Our
insurance coverage may prove inadequate to satisfy future claims
against us.
We may become subject to liabilities, including liabilities for
pollution or other hazards, against which we have not insured
adequately or at all, or cannot insure. Our insurance policies
contain exclusions and limitations on coverage. Our current
insurance policies provide worldwide indemnity of
£50 million in relation to legal liability incurred as
a result of death, injury, disease of persons
and/or loss
of or damage to property. Main exclusions under this insurance
policy, which relates to our industry, include war, nuclear
risks, silicosis, asbestosis or other fibrosis of the lungs or
diseases of the respiratory system with regard to employees, and
gradual pollution. In addition, our insurance policies may not
continue to be available at economically acceptable premiums. As
a result, in the future our insurance coverage may not cover the
extent of claims against us.
It may
be difficult for you to affect service of process and enforce
legal judgments against us or our affiliates.
We are incorporated in Jersey, Channel Islands and a majority of
our directors and senior executives are not residents of the
United States. Virtually all of our assets and the assets of
those persons are located outside the United States. As a
result, it may not be possible for you to effect service of
process within the United States upon those persons or us.
Furthermore, the United States and Jersey currently do not have
a treaty providing for the reciprocal recognition and
enforcement of judgments (other than arbitration awards) in
civil and commercial matters. Consequently, it may not be
possible for you to enforce a final judgment for payment
rendered by any federal or state court in the United States
based on civil liability, whether or not predicated solely upon
United States Federal securities laws against those persons or
us.
In order to enforce any judgment rendered by any Federal or
state court in the United States in Jersey, proceedings must be
initiated by way of common law action before a court of
competent jurisdiction in Jersey. The entry of an enforcement
order by a court in Jersey is conditional upon the following:
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that the court which pronounced the judgment has jurisdiction to
entertain the case according to the principles recognized by
Jersey law with reference to the jurisdiction of the foreign
courts;
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that the judgment is final and conclusive it cannot
be altered by the courts which pronounced it;
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that there is payable pursuant to a judgment a sum of money, not
being a sum payable in respect of tax or other charges of a like
nature or in respect of a fine or other penalty;
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that the judgment has not been prescribed;
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that the courts of the foreign country have jurisdiction in the
circumstances of the case;
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that the judgment was not obtained by fraud; and
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that the recognition and enforcement of the judgment is not
contrary to public policy in Jersey, including observance of the
rules of natural justice which require that documents in the
United States proceeding were properly served on the defendant
and that the defendant was given the right to be heard and
represented by counsel in a free and fair trial before an
impartial tribunal.
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Furthermore, it is doubtful whether you could bring an original
action based on United States Federal securities laws in a
Jersey court.
We are
subject to significant corporate regulation as a public company
and failure to comply with all applicable regulations could
subject us to liability or negatively affect our share
price.
As a publicly traded company, we are subject to a significant
body of regulation. While we have developed and instituted a
corporate compliance program based on what we believe are the
current best practices in corporate governance and continue to
update this program in response to newly implemented or changing
regulatory
19
requirements, we cannot provide absolute assurance that we are
or will be in compliance with all potentially applicable
corporate regulations. For example, we cannot provide assurance
that in the future our management will not find a material
weakness in connection with its annual review of our internal
control over financial reporting pursuant to Section 404 of
the US Sarbanes-Oxley Act of 2002. If we fail to comply with any
of these regulations, we could be subject to a range of
regulatory actions, fines or other sanctions or litigation. If
we must disclose any material weakness in our internal control
over financial reporting, our share price could decline.
Risks
Relating to Our Industry
The
exploration of mineral properties is highly speculative in
nature, involves substantial expenditures, and is frequently
unproductive.
We must continually seek to replenish our ore reserves depleted
by production to maintain production levels over the long term.
Ore reserves can be replaced by expanding known ore bodies or
exploring for new deposits. Exploration for gold is highly
speculative in nature. Our future growth and profitability will
depend, in part, on our ability to identify and acquire
additional mineral rights, and on the costs and results of our
continued exploration and development programs. Many exploration
programs, including some of ours, do not result in the discovery
of mineralization and any mineralization discovered may not be
of sufficient quantity or quality to be profitably mined. Our
mineral exploration rights may not contain commercially
exploitable reserves of gold. Uncertainties as to the
metallurgical recovery of any gold discovered may not warrant
mining on the basis of available technology. Our operations are
subject to all of the operating hazards and risks normally
incident to exploring for and developing mineral properties,
such as:
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encountering unusual or unexpected formations;
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environmental pollution;
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personal injury and flooding; and
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decrease in reserves due to a lower gold price.
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If we discover a viable deposit, it usually takes several years
from the initial phases of exploration until production is
possible. During this time, the economic feasibility of
production may change.
Moreover, we will use the evaluation work of professional
geologists, geophysicists, and engineers for estimates in
determining whether to commence or continue mining. These
estimates generally rely on scientific and economic assumptions,
which in some instances may not be correct, and could result in
the expenditure of substantial amounts of money on a deposit
before it can be determined whether or not the deposit contains
economically recoverable mineralization. As a result of these
uncertainties, we may not successfully acquire additional
mineral rights, or identify new proven and probable reserves in
sufficient quantities to justify commercial operations in any of
our properties.
If management determines that capitalized costs associated with
any of our gold interests are not likely to be recovered, we
would recognize an impairment provision against the amounts
capitalized for that interest. All of these factors may result
in losses in relation to amounts spent which are found not to be
recoverable.
Title
to our mineral properties may be challenged, which may prevent
or severely curtail our use of the affected
properties.
Title to our properties may be challenged or impugned, and title
insurance is generally not available. Each sovereign state is
the sole authority able to grant mineral property rights, and
our ability to ensure that we have obtained secure title to
individual mineral properties or mining concessions may be
severely constrained. Our mineral properties may be subject to
prior unregistered agreements, transfers or claims, and title
may be affected by, among other things, undetected defects. In
addition, we may be unable to operate our properties as
permitted or to enforce our rights with respect to our
properties.
20
Our
ability to obtain desirable mineral exploration projects in the
future may be adversely affected by competition from other
exploration companies.
We compete with other mining companies in connection with the
search for and acquisition of properties producing or possessing
the potential to produce gold. Existing or future competition in
the mining industry could materially and adversely affect our
prospects for mineral exploration and success in the future.
Our
operations are subject to extensive governmental and
environmental regulations, which could cause us to incur costs
that adversely affect our results of operations.
Our mining facilities and operations are subject to substantial
government laws and regulations, concerning mine safety, land
use and environmental protection. We must comply with
requirements regarding exploration operations, public safety,
employee health and safety, use of explosives, air quality,
water pollution, noxious odor, noise and dust controls,
reclamation, solid waste, hazardous waste and wildlife as well
as laws protecting the rights of other property owners and the
public.
Any failure on our part to be in compliance with these laws,
regulations, and requirements with respect to our properties
could result in us being subject to substantial penalties, fees
and expenses, significant delays in our operations or even the
complete shutdown of our operations. We provide for estimated
environmental rehabilitation costs when the related
environmental disturbance takes place. Estimates of
rehabilitation costs are subject to revision as a result of
future changes in regulations and cost estimates. The costs
associated with compliance with government regulations may
ultimately be material and adversely affect our results of
operations and financial condition.
If our
environmental and other governmental permits are not renewed or
additional conditions are imposed on our permits, our financial
condition and results of operations may be adversely
affected.
Generally, compliance with environmental and other government
regulations requires us to obtain permits issued by governmental
agencies. Some permits require periodic renewal or review of
their conditions. We cannot predict whether we will be able to
renew these permits or whether material changes in permit
conditions will be imposed. Non-renewal of a permit may cause us
to discontinue the operations requiring the permit, and the
imposition of additional conditions on a permit may cause us to
incur additional compliance costs, either of which could have a
material adverse effect on our financial condition and results
of operations.
Labor
disruptions could have an adverse effect on our operating
results and financial condition.
Our operations in West Africa are highly unionized, and strikes
are legal in the countries in which we operate. Therefore, our
operations are at risk of having work interrupted for indefinite
periods due to industrial action, such as strikes by employee
collectives. Should long disruptions take place on our
operations, the results from our operations and their financial
condition could be materially and adversely affected.
AIDS
poses risks to us in terms of productivity and
costs.
The incidence of AIDS in Mali and Côte dIvoire, which
has been forecast to increase over the next decade, poses risks
to us in terms of potentially reduced productivity and increased
medical and insurance costs. The exact extent to which our
workforce is infected is not known at present. The prevalence of
AIDS in the countries in which we operate and among our
workforce could become significant. Significant increases in the
incidence of AIDS infection and AIDS-related diseases among
members of our workforce in the future could adversely impact
our operations and financial condition.
Risks
Relating to this Offering
The
market value of our ordinary shares and ADSs may fluctuate due
to the volatility of the securities markets.
The securities markets in the United States and other countries
have experienced significant price and volume fluctuations, and
investors may receive less than the full amount of their
investment on disposal of the shares or
21
ADSs. Volatility in the price of our ordinary shares and ADSs
may be caused by factors beyond our control and may be unrelated
to, or disproportionate to changes in, our results of
operations. In the past, following periods of volatility in the
market price of a public companys securities, securities
class action litigation has often been instituted against that
company. Litigation of this kind could result in substantial
costs and a diversion of our managements attention and
resources.
Holders
of ADSs have fewer rights than shareholders and have to act
through the depositary to exercise those rights.
Holders of ADSs do not have the same rights as shareholders and
accordingly cannot exercise rights of shareholders against us.
The Bank of New York Mellon, as depositary, or the custodian, is
the registered shareholder of the deposited shares underlying
the ADSs, and therefore you will generally have to exercise your
shareholder rights through The Bank of New York Mellon. In
certain cases, we may not ask The Bank of New York Mellon to ask
you for instructions as to how you wish the shares underlying
the ADSs evidenced by your ADRs voted. The Bank of New York
Mellon will not ask you for voting instructions in the absence
of written instructions from us to do so. In the event that we
did not so instruct The Bank of New York Mellon, you could still
instruct The Bank of New York Mellon how to vote if you
otherwise learn of our upcoming shareholders meeting or
vote by surrendering your ADSs, withdrawing your underlying
shares, and then voting as ordinary shareholders. Even if we ask
The Bank of New York Mellon to ask you for such instructions, it
may not be possible for The Bank of New York Mellon to obtain
these instructions from you in time for The Bank of New York
Mellon to vote in accordance with such instructions. If The Bank
of New York Mellon does not receive instructions from you, it
may give a proxy to vote your underlying ordinary shares or
other deposited securities to our designated representative.
This means you may not be able to exercise your right to vote
and there may be nothing you can do if your underlying ordinary
shares or other deposited securities are not voted as you
instructed.
In
some cases, The Bank of New York Mellon may not make rights or
other distributions available to ADS holders.
If we make a rights offer to holders of securities, The Bank of
New York Mellon may make these rights available to you after we
instruct it to do so and provide it with evidence that it is
legal to do so. If we fail to do this and The Bank of New York
Mellon determines that it is impractical to sell the rights, it
may allow these rights to lapse. In that case, you will receive
no value for them.
Additionally, The Bank of New York Mellon is not responsible if
it decides that it is unlawful or impractical to make a
distribution available to any ADS holder and we have no
obligation to take any other action to permit a distribution.
This means that you may not receive the distribution we make on
ordinary shares or any value for them if it is illegal or
impractical for us to make them available to you.
22
USE OF
PROCEEDS
We expect to use the net proceeds from this offering to fund the
feasibility studies for our Gounkoto and Massawa projects; to
develop the Gounkoto and Massawa projects following approval by
our board; and for other organic and corporate opportunities,
including possible acquisitions.
In addition, if we enter into the Arrangement Agreement and
consummate the acquisition of Moto, some of the net proceeds of
this offering could be used to fund the development of the Moto
Gold Project.
23
DIVIDENDS
We paid our third dividend since 2007 to ordinary shareholders
in March 2009. It is our policy to pay dividends if profits and
funds are available for that purpose. Whether or not funds are
available depends on a variety of factors, including capital
expenditure requirements. We cannot guarantee that dividends
will be paid in the future.
Subject to the provisions of the 1991 Law and of the Articles of
Association, we may, by ordinary resolution, declare dividends
to be paid to shareholders according to their respective rights
and interests in our profits. However, no dividend shall exceed
the amount recommended by us. Subject to the provisions of the
1991 Law, we may declare and pay an interim dividend, including
a dividend payable at a fixed rate, if an interim dividend
appears to us to be justified by our profits available for
distribution.
24
CAPITALIZATION
The following table sets forth our actual short-term and
long-term indebtedness, equity attributable to owners of the
parent and total capitalization on a consolidated basis at
June 30, 2009, and as adjusted to give effect to this
offering and the application of the net proceeds of this
offering at the public offering price of $59.50 per ordinary
share, or $59.50 per ADS, as described in Use of
Proceeds. The following table should be read in
conjunction with Use of Proceeds and our unaudited
condensed consolidated interim financial statements, including
the related notes, appearing elsewhere in this prospectus.
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At June 30, 2009
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(Unaudited)
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Actual
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As Adjusted
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(In thousands)
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Total short-term indebtedness
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$
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898
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$
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898
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Guaranteed, secured
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898
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898
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Unguaranteed, secured
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Guaranteed, unsecured
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Unguaranteed, unsecured
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Total long-term indebtedness
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$
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797
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$
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797
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Guaranteed, secured
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797
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797
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Unguaranteed, secured
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Guaranteed, unsecured
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Unguaranteed, unsecured
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Equity attributable to owners of the parent
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Share capital
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3,841
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4,091
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Share premium
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459,829
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746,510
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Retained earnings
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262,013
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262,013
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Other reserves
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(13,075
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(13,075
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Total equity attributable to owners of the parent
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712,608
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999,539
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Total capitalization (equity attributable to owners of the
parent plus total debt)
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$
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714,303
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$
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1,001,234
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25
DILUTION
If you invest in our ADSs, your interest will be diluted to the
extent of the difference between the public offering price per
ADS and our net tangible book value per ADS after this offering.
Dilution results from the fact that the public offering price
per ordinary share is substantially in excess of the book value
per ordinary share attributable to the existing shareholders for
our presently outstanding ordinary shares.
Our consolidated net tangible book value as of June 30,
2009 was $732 million, or $9.54 per ordinary share.
Consolidated net tangible book value per share represents the
total amount of our consolidated tangible assets reduced by the
amount of our consolidated liabilities and divided by the number
of ordinary shares outstanding on June 30, 2009. Our
consolidated net tangible book value at June 30, 2009,
after giving effect to the sale of 5,000,000 ordinary shares or
ADSs in this offering at the public offering price of $59.50 per
ordinary share, and after deducting underwriting discounts and
estimated offering expenses, would be $1,019 million or
$12.46 per share.
Without taking into account any other changes in such
consolidated net tangible book value after June 30, 2009
except for the issuance and sale of ordinary shares in the form
of ADSs offered by us in this offering at the public offering
price of $59.50 per ADS, and after deduction of underwriting
discounts and estimated aggregate offering expenses of this
offering payable by us, our pro forma net tangible book value as
of June 30, 2009 would have increased to
$1,019 million or $12.46 per ordinary share and per ADS,
assuming no exercise of the underwriters over-allotment
option to purchase additional ordinary shares, in the form of
ordinary shares or ADSs, from us. This represents an immediate
increase in net tangible book value of $2.93 per ordinary share
and per ADS to the existing shareholder and an immediate
dilution in net tangible book value of $47.04 per ordinary share
and per ADS to investors purchasing ADSs in this offering.
The following table illustrates such per share dilution:
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Public Offering Price per Share
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US$
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Consolidated net tangible book value per share as of
June 30, 2009
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9.54
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Increase in consolidated net tangible book value per ordinary
share or ADS attributable to new investors in this offering
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2.93
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Consolidated net tangible book value per ordinary share or ADS
after this offering
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12.46
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Dilution per ordinary share or ADS to new investors
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47.04
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The following table presents the differences between the total
consideration paid to us and the average price per share paid by
existing shareholders and by new investors purchasing ordinary
shares and ADSs in this offering:
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Average
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Ordinary Shares
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Total
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Price per
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Purchased
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Consideration
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Ordinary
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Number
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Percent
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Amount
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Percent
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Share or ADS
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(thousands)
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(thousands)
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Existing shareholders
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76,780
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94
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%
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$
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584,914
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66
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%
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$
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7.62
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New investors
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5,000
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6
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%
|
|
|
297,500
|
|
|
|
34
|
%
|
|
$
|
59.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
81,780
|
|
|
|
100
|
%
|
|
$
|
882,414
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The above tables do not reflect any ordinary shares or ADSs that
would be issued if we enter into the Arrangement Agreement and
consummate the acquisition of Moto.
26
OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
The following discussion provides information that our
management believes is relevant to an assessment and
understanding of our consolidated financial condition and
results of operations.
This discussion should be read in conjunction with the more
detailed information contained in Operating and Financial
Review and Prospects included in our 2008 20-F
incorporated by reference in this prospectus (which includes the
audited consolidated financial statements) and the unaudited
condensed consolidated interim financial statements that appear
in this prospectus, including the notes hereto. The following
unaudited information for the six month period ended
June 30, 2009 and 2008 and as of June 30, 2009, have
been derived from our unaudited condensed consolidated interim
financial statements, including the related notes that appear
elsewhere in this prospectus.
General
We earn substantially all of our revenue in US dollars and a
large proportion of our costs are denominated or based in US
dollars, excluding the Morila mining contract which is partially
denominated in Euros. We also have South African Rand,
Communauté Financière Africaine franc and Pound
Sterling denominated costs, which are primarily wages and
material and capital purchases.
Revenue
Substantially all of our revenue is derived from the sale of
gold. As a result, our operating results are directly related to
the price of gold. Historically, the price of gold has
fluctuated widely. The gold price is affected by numerous
factors over which we have no control. See Risk Factors
Risks Relating to Our Operations The
profitability of our operations, and the cash flows generated by
our operations, are affected by changes in the market price for
gold which in the past has fluctuated widely.
We have followed a hedging strategy the aim of which is to
secure a minimum price which is sufficient to protect us in
periods of significant capital expenditure and debt finance,
while at the same time allowing significant exposure to the spot
gold price. Accordingly, we have made use of hedging
arrangements. Under the terms of the Morila project loan, we
were required to hedge 50% of approximately 36% of Morilas
first 5 years of production. The last remaining hedges were
closed out during 2004.
Our prior financing arrangements for the development of Loulo
included provisions for gold price protection. Although the
facility was fully repaid in December 2007, these instruments
are still in place. At June 30, 2009, 79,248 ounces had
been sold forward at an average price of $466 per ounce. This
represents approximately 12% of planned production at Loulo for
the period ending December 2010.
Significant changes in the price of gold over a sustained period
of time may lead us to increase or decrease our production,
which could have a material impact on our revenue.
Our
Realized Gold Price
The following table sets out the average, the high and the low
afternoon London Bullion Market fixing price of gold and our
average US dollar realized gold price during the six months
ended June 30, 2009 and 2008.
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2009
|
|
June 30, 2008
|
|
Average
|
|
$
|
915
|
|
|
$
|
911
|
|
High
|
|
|
989
|
|
|
|
1,011
|
|
Low
|
|
|
810
|
|
|
|
847
|
|
Average realized gold price*
|
|
|
834
|
|
|
|
831
|
|
|
|
|
* |
|
Our average realized gold price differs from the average gold
price as a result of the timing of our gold deliveries and
different realized prices achieved on the hedge book. |
27
Costs and
Expenses
Our operations currently comprise two operations mined by
contractors. Milling operations are undertaken by the
groups own employees. Open pit mining activities ceased at
Morila in April 2009 and the mine began the treatment of low
grade stockpiles. Total cash costs in the six months ended
June 30, 2009 as defined by guidance issued by the Gold
Institute made up approximately 75% of total costs and expenses
and comprised mainly mining and milling costs, including labor
and consumable stores costs. Consumable stores costs include
diesel and reagent costs. Contractor costs represented 38% of
total cash costs, with diesel and reagent costs making up 27% of
total cash costs. Direct labor costs accounted for approximately
5% of total cash costs. A definition of total cash costs, as
defined by the Gold Institute, is included in Summary
Consolidated Financial and Operating Data.
Total costs increased by 6.6% from $136.3 million for the
six months ended June 30, 2008 to $145.3 million for
the six months ended June 30, 2009. The price of diesel
acquired for Morila and Loulo has declined during 2009. The
average price of fuel for the six months ended June 30,
2009 was $0.72 per liter, compared to $1.04 per liter for the
six months ended June 30, 2008. Should these prices
increase again in future, this could significantly impact total
cash costs mainly as a result of the high volume of diesel
consumed to generate power and to run the mining fleet.
Increased costs were in large part the result of movements in
stockpiles at both Loulo and Morila. Ore was added to the
stockpiles during the six months ended June 30, 2008 at
both operations, while ore was taken from the stockpiles during
the six months ended June 30, 2009 at both operations, in
line with the mine plans.
The remainder of our total costs and expenses consists primarily
of amortization and depreciation, exploration costs, exchange
losses, interest expense and general administration or corporate
charges.
Loulo benefited from a three-year duty exemption period, which
ended on November 8, 2008. Duties became payable in
accordance with the Malian duty regime on all imported goods. On
average, it is anticipated that this has the effect of
increasing the costs of imported goods by 7%, which equates to
an overall increase of 1% on total costs.
28
Operating
results for six months ended June 30, 2009 and
2008
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2009
|
|
June 30, 2008
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
(In thousands, except per share data)
|
|
REVENUE
|
|
|
|
|
|
|
|
|
Gold sales on spot
|
|
$
|
212,216
|
|
|
$
|
199,253
|
|
Loss on matured hedges
|
|
|
(22,722
|
)
|
|
|
(17,021
|
)
|
Non-cash profit on roll forward of hedges
|
|
|
1,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
190,830
|
|
|
|
182,232
|
|
Other income
|
|
|
2,714
|
|
|
|
893
|
|
|
|
|
|
|
|
|
|
|
Total income
|
|
|
193,544
|
|
|
|
183,125
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
Mine production costs
|
|
|
85,986
|
|
|
|
92,952
|
|
Movement in production inventory and ore stockpiles
|
|
|
1,600
|
|
|
|
(12,754
|
)
|
Depreciation and amortization
|
|
|
13,311
|
|
|
|
11,390
|
|
Other mining and processing costs
|
|
|
8,635
|
|
|
|
6,490
|
|
|
|
|
|
|
|
|
|
|
Mining and processing costs
|
|
|
109,532
|
|
|
|
98,078
|
|
Transport and refining costs
|
|
|
778
|
|
|
|
1,234
|
|
Royalties
|
|
|
11,171
|
|
|
|
10,503
|
|
Exploration and corporate expenditure
|
|
|
23,823
|
|
|
|
26,505
|
|
|
|
|
|
|
|
|
|
|
Total costs
|
|
|
145,304
|
|
|
|
136,320
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
979
|
|
|
|
6,859
|
|
Finance costs
|
|
|
(1,549
|
)
|
|
|
(1,413
|
)
|
Provision for financial assets
|
|
|
(4,975
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance (costs)/income net
|
|
|
(5,545
|
)
|
|
|
5,446
|
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE INCOME TAX
|
|
|
42,695
|
|
|
|
52,251
|
|
Income tax expense
|
|
|
(10,679
|
)
|
|
|
(13,860
|
)
|
|
|
|
|
|
|
|
|
|
PROFIT FOR THE PERIOD
|
|
|
32,016
|
|
|
|
38,391
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
|
14,781
|
|
|
|
544
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
46,797
|
|
|
|
38,935
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to:
|
|
|
|
|
|
|
|
|
Owners of the parent
|
|
|
25,998
|
|
|
|
33,877
|
|
Non-controlling interests
|
|
|
6,018
|
|
|
|
4,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,016
|
|
|
|
38,391
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to:
|
|
|
|
|
|
|
|
|
Owners of the parent
|
|
|
40,779
|
|
|
|
34,421
|
|
Non-controlling interests
|
|
|
6,018
|
|
|
|
4,514
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
46,797
|
|
|
$
|
38,935
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (US$)
|
|
|
0.34
|
|
|
|
0.44
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share (US$)
|
|
|
0.33
|
|
|
|
0.43
|
|
|
|
|
|
|
|
|
|
|
Product
Sales
Total revenue increased by 4.7% from $182.2 million for the
six months ended June 30, 2008 to $190.8 million for
the six months ended June 30, 2009. Gold sales on spot (net
of inter-company sale eliminations) increased by 6.5% from the
six months ended June 30, 2008, compared to the six months
ended June 30, 2009. This was due mainly to a 5% increase
in attributable ounces of gold sold. The average gold price
received of $830 per ounce during the six months ended
June 30, 2009 was consistent with the average gold price
received of $833 per ounce during the six months ended
June 30, 2008.
29
The loss incurred on matured hedges increased by 34% from
$17 million for the six months ended June 30, 2008 to
$22.7 million for the six months ended June 30, 2009.
The increased loss was due to more ounces delivered into the
hedge book during the six months ended June 30, 2009
(47,496 ounces), compared to the six month period ended
June 30, 2008 (34,998 ounces), as well as a small increase
in the average spot gold price.
The non-cash profit on roll forward of hedges of
$1.3 million for the six months ended June 30, 2009,
compared to $nil for the six months ended June 30, 2008,
relates to the recycling of amounts accumulated in equity where
losses were previously recognized on hedges that were rolled and
have now been delivered into.
Other
Income
Other income was $2.7 million for the six months ended
June 30, 2009, compared to $0.9 million for the six
months ended June 30, 2008. Other income includes
management fees received from Morila (net of eliminations) since
we assumed operatorship of the mine from February 15, 2008.
Other income also includes net exchange gains on operational
expenditure.
Cost
and Expenses
Total
Cash Costs per ounce
The following table sets out our total ounces produced and total
cash cost and production cost per ounce for the six months ended
June 30, 2009 and 2008 (for a definition of total cash
costs, please see footnote 2 Summary Consolidated
Financial and Operating Data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, (unaudited)
|
|
|
2009
|
|
2008
|
|
|
Ounces
|
|
$ Per Ounce
|
|
Ounces
|
|
$ Per Ounce
|
|
Morila (40% share) cash costs
|
|
|
73,911
|
|
|
|
423
|
|
|
|
85,898
|
|
|
|
395
|
|
Loulo (100% share) cash costs
|
|
|
158,087
|
|
|
|
491
|
|
|
|
133,350
|
|
|
|
483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ounces (attributable production)
|
|
|
231,998
|
|
|
|
|
|
|
|
219,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash costs per ounce($)
|
|
|
|
|
|
|
469
|
|
|
|
|
|
|
|
449
|
|
Total production cost per ounce($)*
|
|
|
|
|
|
|
527
|
|
|
|
|
|
|
|
501
|
|
|
|
|
* |
|
Total production cost used in calculating total production cost
per ounce comprises total cash costs plus depreciation and
amortization cost, which is discussed below. |
Our total cash costs per ounce increased $20 per ounce, or 4%,
from $449 per ounce for the six months ended June 30, 2008
to $469 per ounce for the six months ended June 30, 2009.
The increases in our costs were mainly the result of movements
in stockpiles at both Loulo and Morila. Total cash cost per
ounce includes these stockpile adjustments. Ore was added to the
stockpiles during the six months ended June 30, 2008 at
both operations, while ore was taken from the stockpiles during
the six months ended June 30, 2009 at both operations, in line
with the mine plans. The principal reason for this change
results from the transition of in pit mining to stockpile
treatment at Morila with the cessation of in pit mining in April
2009. The overall effect was a stockpile charge to costs of
$3.2 million for the six months ended June 30, 2009
and a corresponding credit of $12.6 million to costs for
the six months ended June 30, 2008.
The increase in costs was further due to higher mining rates
following the new open pit mining agreement at Loulo entered
into with effect from April 1, 2009, as well as higher use
of reagents as a result of the higher copper content ore from
Yalea opencast at Loulo during the second quarter of 2009. The
increase in total cash costs per ounce was partially offset by
the increase in ounces produced of 6% from 219,248 ounces for
the six months ended June 30, 2008 to 231,998 ounces for
the six months ended June 30, 2009.
Royalties increased by $0.7 million, or 7%, from
$10.5 million for the six months ended June 30, 2008
to $11.2 million for the six months ended June 30,
2009. The increased royalties reflect increased gold sales.
We incur other mining and processing costs consisting of
expenses associated with providing for mine administration
support services to the Morila and Loulo mine. These charges
increased to $8.6 million for the six
30
months ended June 30, 2009 from $6.5 million for the
six months ended June 30, 2008. The increase relates to an
increase in insurance cost at Loulo, as well as an increase in
duty taxes at Loulo following the end of the exoneration period
on November 8, 2008.
Depreciation
and Amortization
Depreciation and amortization for the six months ended
June 30, 2009 was $13.3 million, compared to
$11.4 million for the six months ended June 30, 2008.
This includes depreciation charges for both operations, and the
increase reflects the capital expenditures for the underground
development at Loulo, as well as capital expenditure to increase
processing capacity at Loulo.
Exploration
and Corporate Expenditure
Exploration and corporate expenditure was $23.8 million for
the six months ended June 30, 2009, compared to
$26.5 million for the six months ended June 30, 2008.
The six months ended June 30, 2008 reflects a higher level
of executive bonuses as a result of the substantial growth in
our share price during the first quarter of 2008. The reduction
in corporate and exploration expenditure of $2.7 million in
the six months ended June 30, 2009 is furthermore the
result of changes in executive directors employment
contracts as well as amendments in the formulae for the
calculation of executive bonuses.
Finance
Income
Finance income consists primarily of interest received on cash
held at banks, as well as exchange gains on financing
activities. Finance income of $1.0 million for the six
months ended June 30, 2009 decreased from $6.9 million
for the six months ended June 30, 2008. Finance income for
the six months ended June 30, 2008 included an exchange
gain of $2.1 million relating primarily to the appreciation
of euro denominated cash investments against the dollar. The
effective interest rate for the six months ended June 30,
2009 of 1.1% was lower than the 2.6% which was achieved during
the six months ended June 30, 2008.
Finance
Costs
Finance costs for the six months ended June 30, 2009 were
$1.5 million compared to the finance costs for the six
months ended June 30, 2008 of $1.4 million and
consisted mainly of interest on the Morila power plant and
oxygen plant finance leases, as well as the Loulo CAT finance
lease. The Loulo CAT finance lease was fully repaid in May 2009.
Finance costs for the six months ended June 30, 2009 also
include an exchange loss of $0.6 million on financing
activities, as a result of the movements of cash investments
denominated in currencies other than the dollar.
Provision
for Financial Assets
At the end of 2007, we transferred $49.0 million from cash
and cash equivalents to available-for-sale financial assets
which was attributable to our portfolio of ARS. The trading
market for these instruments has become substantially illiquid
as a result of the unusual conditions in the credit markets.
During the second half of 2008 and the first six months of 2009,
following the deterioration of the underlying credit ratings of
the collateral of certain of the ARS and as a result of applying
the mark-to-model valuation methodology as at June 30,
2009, a further impairment of $5.0 million was made during
the first six months ended June 20, 2009
($10.4 million was provided during the second half of
2008). As previously disclosed, we believe that we have been the
subject of a fraud committed by brokers working for a large
investment bank through material misrepresentations of the
nature of the ARS in which we were invested. Consequently, we
have engaged legal counsel and in October 2008 we commenced
arbitration proceedings against the bank and the brokers for
their misconduct. These individuals are the subject of criminal
proceedings instigated by the US government, in which we have co
operated with the U.S. Department of Justice, and
regulatory proceedings instigated by the SEC, which we believe
reinforce our position. There can be no assurance that we will
be successful in our actions against the bank or the individual
brokers, and consequently we have not relied upon this for the
determination of the provision.
31
Income
Tax Expense
The income tax expense amounted to $10.7 million for the
six months ended June 30, 2009 and $13.9 million for
the six months ended June 30, 2008. The decrease in the tax
expense was the result of the decrease in profit before tax at
Morila SA for the six months ended June 30, 2009 compared
to the corresponding period in 2008. Morila SA benefited from a
five year tax holiday until November 14, 2005. Loulo SA
also benefits from a five year tax holiday in Mali which
commenced on November 8, 2005. Under Malian tax law, income
tax is based on the greater of 35% taxable income or 0.75% of
gross revenue.
Non-controlling
interest
The non-controlling interests for the six months ended
June 30, 2009 and June 30, 2008 represents the 20%
minority share of the profits of Loulo.
Liquidity
and Capital Resources for Six months ended June 30, 2009
and 2008
An analysis of the cash flows for the six month periods ended
June 30, 2009 and June 30, 2008 is set out below:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30, 2009
|
|
|
June. 30, 2008
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
(In thousands)
|
|
|
Profit for the period
|
|
$
|
32,016
|
|
|
$
|
38,391
|
|
Income tax expense
|
|
|
10,679
|
|
|
|
13,860
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax
|
|
|
42,695
|
|
|
|
52,251
|
|
Adjustment for non-cash items
|
|
|
21,679
|
|
|
|
14,303
|
|
Effects of changes in operating working capital items
|
|
|
(13,071
|
)
|
|
|
(33,052
|
)
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(14,815
|
)
|
|
|
(2,754
|
)
|
Inventories and ore stockpiles
|
|
|
(2,618
|
)
|
|
|
(17,633
|
)
|
Trade and other payables
|
|
|
4,362
|
|
|
|
(12,665
|
)
|
|
|
|
|
|
|
|
|
|
Income tax paid
|
|
|
(5,450
|
)
|
|
|
(5,169
|
)
|
|
|
|
|
|
|
|
|
|
Net cash generated from operating activities
|
|
|
45,853
|
|
|
|
28,333
|
|
|
|
|
|
|
|
|
|
|
Net cash used by investing activities
|
|
|
(75,015
|
)
|
|
|
(37,654
|
)
|
Additions to property, plant and equipment
|
|
|
(75,015
|
)
|
|
|
(37,654
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used by financing activities
|
|
|
(8,482
|
)
|
|
|
(9,537
|
)
|
Ordinary shares issued
|
|
|
2,692
|
|
|
|
1,004
|
|
Long-term loans repaid
|
|
|
(1,207
|
)
|
|
|
(1,387
|
)
|
Dividends paid
|
|
|
(9,967
|
)
|
|
|
(9,154
|
)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
$
|
(37,644
|
)
|
|
$
|
(18,858
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
$
|
257,631
|
|
|
$
|
294,183
|
|
Cash and cash equivalents at end of period
|
|
$
|
219,987
|
|
|
$
|
275,325
|
|
Operating
Activities
Net cash generated from operating activities was
$45.9 million for the six months ended June 30, 2009,
compared to $28.3 million for the six months ended
June 30, 2008. The $17.6 million increase was due
mainly to changes in stockpiles at Loulo and Morila for the six
months ended June 30, 2009, compared to the six months
ended June 30, 2008, as well as closer management of trade
payables at Loulo for the comparative periods.
The increase in the adjustment for non-cash items is
attributable to a $5 million non-cash impairment to ARS
during the six months ended June 30, 2009 (2008: $0.0), as
well as a $2.0 million increase in the non-cash adjustment
of share-based payments due to the increase in the cost of
options granted to employees.
32
Receivables increased by $14.8 million during the six
months ended June 30, 2009 due mainly to the increase in
TVA balances at Loulo following the end of the exoneration
period on November 8, 2008.
Inventories and ore stockpiles increased by $17.6 million
during the six months ended June 30, 2008 as a result of
increases in stockpiles at both Morila and Loulo in line with
the life of mine plans.
Inventories and ore stockpiles increased by $2.6 million
during the six months ended June 30, 2009 due to increases
in mining strategic stocks, reagent and grinding media at Loulo,
due to increased demand for supplies and insurance spares
resulting from the expansion of operations.
Trade and other payables decreased significantly by
$12.7 million during the six months ended June 30,
2008 due to the accounts payable balances in December 2007
including accruals related to the equity placing in December
2007, which was subsequently settled.
Trade and other payables increased by $4.4 million during
the six months ended June 30, 2009 mainly as a result of
the timing of payments of creditors and closer management of
trade creditors at Loulo.
Investing
Investing activities for the six months ended June 30, 2009
comprised $75 million of capital expenditure compared to
$37.7 million for the six months ended June 30, 2008.
Investing activities for both periods relates to capital
expenditure incurred on the underground development work at
Loulo, power plant expansion, upgrades to the crushing plant and
expenditure on the overland conveyer, stockpile and tailings
facilities at Loulo, as well as expenditure related to the
Tongon project. The increase of $37.3 million is mainly the
result of increased capital expenditure incurred on the Tongon
project during the six months ended June 30, 2009
($28.9 million expenditure), compared to $5.7 million
for the corresponding period in 2008, as well as increased
expenditure on the underground projects of Yalea and Gara at
Loulo during 2009.
We believe that based on our current cash and cash equivalents
balance of $220.0 million at June 30, 2009 and
expected operating cash flows, the current lack of liquidity in
the credit and capital markets will not have a material impact
on our liquidity, or our ability to fund our operations.
Financing
Financing activities for the six months ended June 30, 2009
utilized $8.5 million. This was mainly due to the payment
of dividends to our shareholders amounting to $10.0 million.
Financing activities for the six months ended June 30, 2008
utilized $9.5 million. This was mainly due to the payment
of dividends to our shareholders amounting to $9.2 million.
Credit
and Loan Facilities
During the year ended December 31, 2000, Morila entered
into a finance lease for five Rolls-Royce generators under the
terms of a Deferred Terms Agreement between Morila and
Rolls-Royce. The lease is repayable over ten years commencing
April 1, 2001 and bears interest at a variable rate which
at June 30, 2009 was approximately 25% (2008: 33%) per
annum. Our attributable share of this finance lease obligation
amounted to $1.4 million at June 30, 2009 and
$1.8 million at December 31, 2008. We have guaranteed
the repayment of the lease.
Morila also has a finance lease with Air Liquide relating to
three oxygen generating units. The lease is payable over
10 years commencing December 1, 2000 and bears
interest at a variable rate which at June 30, 2009 stood at
approximately 3.09%. (2008: 3.09%).
Somilo SA has a $0.6 million loan from the Government of
Mali at June 30, 2009. This loan is uncollateralized and
bears interest at the base rate of the Central Bank of West
African States plus 2% per annum. The accrual of interest ceased
in the last quarter of 2005 per mutual agreement between
shareholders. This loan is repayable from cash flows of the
Loulo mine after the repayment of all other loans.
33
The Loulo project finance loan was arranged by NM
Rothschild & Sons Limited and SG Corporate &
Investment Banking, who were joined in the facility by Absa Bank
and HVB Group, and was repayable through September 2009.
The Loulo project finance facility was replaced in May of 2007
with a $60 million corporate revolving credit facility to
Randgold Resources (Somilo) Limited. The facility was with NM
Rothschild, Société Générale, Fortis and
Barclays. It carried interest at rates of between LIBOR + 1.4%
and LIBOR + 1.6%. The facility was fully repaid in December
2007. The corporate facility remains in place should it be
required. The maximum amounts available under the facility are:
prior to November 1, 2009 $60 million; up
to May 1, 2010 $48 million; up to
November 1, 2010 $36 million; up to
May 1, 2011 $24 million.
Loulo has a Euro denominated Caterpillar finance facility
relating to fifteen 3512B HD generator sets and ancillary
equipment purchased from JA Delmas and financed by a loan from
Caterpillar Finance. The lease is payable quarterly over
42 months commencing on August 1, 2005, and bears
interest at a fixed rate of 6.03% per annum. Together with
Randgold Resources (Somilo) Limited, we jointly guaranteed the
repayment of this lease. The loan was fully repaid in May 2009.
Equity
Attributable to Owners of the Parent and Gross Indebtedness as
at June 30, 2009
The following table sets out our equity attributable to owners
of the parent and gross indebtedness. The figures for
June 30, 2009 have been derived from our unaudited
condensed consolidated interim financial statements.
|
|
|
|
|
|
|
At June 30, 2009
|
|
|
|
(Unaudited)
|
|
|
|
(In thousands)
|
|
|
Total current debt
|
|
|
|
|
Guaranteed
|
|
$
|
|
|
Secured
|
|
|
898
|
|
|
|
|
|
|
|
|
|
898
|
|
|
|
|
|
|
Long term borrowings (excluding current portion of long term
borrowings)
|
|
|
|
|
Guaranteed
|
|
|
|
|
Secured
|
|
|
797
|
|
|
|
|
|
|
|
|
|
797
|
|
|
|
|
|
|
Total gross indebtedness
|
|
|
1,695
|
|
Equity attributable to owners of the parent (excluding
accumulated profit)
|
|
|
|
|
Share capital
|
|
|
3,841
|
|
Share premium
|
|
|
459,829
|
|
Other reserves
|
|
|
(13,075
|
)
|
|
|
|
|
|
Equity attributable to owners of the parent
|
|
|
450,595
|
|
|
|
|
|
|
Total equity attributable to owners of the parent and gross
indebtedness
|
|
$
|
452,290
|
|
|
|
|
|
|
34
The following schedule sets out our net indebtedness. The
figures for June 30, 2009 have been derived from our
unaudited condensed consolidated interim financial statements.
|
|
|
|
|
|
|
At June 30, 2009
|
|
|
|
(Unaudited)
|
|
|
|
(In thousands)
|
|
|
Cash and cash equivalents
|
|
$
|
219,987
|
|
|
|
|
|
|
Liquidity
|
|
|
219,987
|
|
Current portion of long term borrowings
|
|
|
(898
|
)
|
|
|
|
|
|
Current Financial Debt
|
|
|
(898
|
)
|
|
|
|
|
|
Net Current Financial Indebtedness
|
|
|
219,089
|
|
Non-current bank loans
|
|
|
|
|
Long term borrowings
|
|
|
(797
|
)
|
|
|
|
|
|
Non-current Financial Indebtedness
|
|
|
(797
|
)
|
|
|
|
|
|
Net cash
|
|
$
|
218,292
|
|
|
|
|
|
|
Risk
Management and Treasury Policy
Although, in general, it is not our policy to hedge our gold
sales, we believe it is prudent to hedge during times of
significant capital expansion and debt and we are sometimes
required to do so under debt financing arrangements. The market
price of gold has a significant effect on our results of
operations, our ability to pay dividends and undertake capital
expenditures, and the market price of our ordinary shares. Gold
prices have historically fluctuated widely and are affected by
numerous industry factors over which we have no control. The
aggregate effect of these factors is impossible for us to
predict.
We use hedging instruments to protect the selling price of some
of our anticipated gold production. These hedging instruments
have been required by the terms of our Morila and Loulo loans.
The Morila hedge book was closed out in 2004.
The Loulo project finance loan was entered into in 2004 with a
consortium of financial lenders, namely, Rothschild, SG
Corporate and Investment Bank, ABSA Bank and HVB Group, and had
as a requirement that some hedging be put in place. The intended
effect of the hedging transactions was to lock in a fixed sale
price for some of our future gold production, and reduce the
adverse impact of a future fall in gold prices.
Somilos hedging is administered by our finance department
which acts upon the recommendations of a treasury committee
within the guidelines of a policy set by our board. The hedging
was entered into in terms of a requirement of the Loulo Loan.
The Loulo loan and our hedging arrangements were with a
consortium of financial lenders: Rothschild, SG Corporate and
Investment Bank, ABSA Bank and HVB Group. The Loulo Loan had in
early May 2007 been replaced by a Revolving Credit Facility.
The consortium of financial lenders in the Revolving Credit
Facility are Rothschild, SG Corporate and Investment Bank,
Barclays Bank and Fortis Bank. The Revolving Credit Facility
does not require any minimum hedging levels, but all hedging
contracts are assigned to the consortium of financial lenders as
well as those banks we have hedging arrangements with as part of
a security package.
All of Somilos derivative transactions previously had to
be in compliance with the terms and conditions of the Loulo loan
agreement. That agreement placed a limit on derivative
transactions of 70% of Loulos forecast production for a
given year. In terms of the Revolving Credit Facility Agreement,
derivative transactions in the group are limited to 75% of group
production.
Our board agreed as part of the financing arrangements for the
development of Loulo that some gold price protection be secured.
At June 30, 2009, 79,248 ounces remained, sold forward at
an average forward price of $466 per ounce. At December 31,
2008, 126,744 ounces had been sold forward at an average price
of $456 per ounce.
35
These derivatives are accounted for in accordance with
International Accounting Standard 39, Financial
Instruments: Recognition and Measurement. Under IAS 39,
all these derivatives are recognized on the balance sheet at
their fair value.
On the date a derivative contract is entered into, we designate
the derivative for accounting purposes as either a hedge of the
fair value of a recognized asset or liability or a firm
commitment (fair value hedge) or a hedge of a forecasted
transaction (cash flow hedge). The derivatives held as at
June 30, 2009 and at December 31, 2008 were all being
accounted for as cash flow hedges.
We formally document all relationships between hedging
instruments and hedged items, as well as our risk management
objective and strategy for undertaking various hedge
transactions. This process includes linking derivatives designed
as hedges to specific assets and liabilities or to specific firm
commitments or forecasted transactions. We formally assess, both
at the hedge inception and on an ongoing basis, whether the
derivatives that are used in hedging transactions are highly
effective in offsetting changes in fair values or cash flows of
hedged items.
Corporate,
Exploration, Development and New Business Expenditures
Our expenditures on corporate, exploration, development and new
business activities for the six months ended June 30, 2009
and the six months ended June 30, 2008 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
(Unaudited)
|
|
|
|
2009
|
|
|
2008
|
|
|
|
(In thousands)
|
|
|
Area
|
|
|
|
|
|
|
|
|
Rest of Africa
|
|
$
|
132
|
|
|
$
|
98
|
|
Burkina Faso
|
|
|
335
|
|
|
|
1,541
|
|
Mali
|
|
|
2,596
|
|
|
|
2,567
|
|
Tanzania
|
|
|
177
|
|
|
|
602
|
|
Côte dIvoire
|
|
|
1,433
|
|
|
|
1,528
|
|
Senegal
|
|
|
4,928
|
|
|
|
2,435
|
|
Ghana
|
|
|
194
|
|
|
|
487
|
|
|
|
|
|
|
|
|
|
|
Total exploration expenditure
|
|
$
|
9,795
|
|
|
$
|
9,258
|
|
Corporate expenditure
|
|
|
14,028
|
|
|
|
17,247
|
|
|
|
|
|
|
|
|
|
|
Total exploration and corporate expenditure
|
|
$
|
23,823
|
|
|
$
|
26,505
|
|
|
|
|
|
|
|
|
|
|
The main focus of exploration work is on our advanced projects
in western Mali, around Morila, and in Senegal, Burkina Faso,
Tanzania, Côte dIvoire and Ghana.
Site establishment is nearing completion at Tongon in Côte
dIvoire ahead of the
ramp-up of
the main construction program, with earthworks for the water
storage nearing completion, as well as the basis for the Carbon
In Leach tanks having been excavated and concrete poured.
Progress has been made regarding the approval of the mining
convention.
36
Tabular
Disclosure of Contractual Obligations
Our contractual obligations and commercial commitments consist
primarily of credit facilities, as described above. The related
obligations as of June 30, 2009 are set out below
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 1
|
|
|
|
|
|
|
|
|
More than
|
|
Contractual Obligations
|
|
Total
|
|
|
Year
|
|
|
1-3 Years
|
|
|
3-5 Years
|
|
|
5 Years
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
Long term borrowings(1)
|
|
$
|
2,383
|
|
|
$
|
1,286
|
|
|
$
|
1,097
|
|
|
$
|
|
|
|
$
|
|
|
Operating lease obligations
|
|
|
2,422
|
|
|
|
346
|
|
|
|
692
|
|
|
|
692
|
|
|
|
692
|
|
Financial liabilities forward gold sales
|
|
|
37,019
|
|
|
|
26,496
|
|
|
|
10,523
|
|
|
|
|
|
|
|
|
|
Provision for environmental rehabilitation
|
|
|
14,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,076
|
|
Loans from minority shareholders in subsidiaries
|
|
|
2,893
|
|
|
|
|
|
|
|
|
|
|
|
2,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual cash obligations
|
|
$
|
58,793
|
|
|
$
|
28,128
|
|
|
$
|
12,312
|
|
|
$
|
3,585
|
|
|
$
|
14,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts for capital expenditure as at June 30, 2009
amounted $50.3 million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This relates to finance lease obligations and includes total
interest of $0.7 million calculated at the interest rate
existing at June 30, 2009. |
37
DIRECTORS
AND SENIOR MANAGEMENT
Our Articles of Association provide that the board must consist
of no less than two and no more than 20 directors at any
time.
The address of each of our executive directors and non-executive
directors is the address of our principal executive offices,
La Motte Chambers, La Motte Street, St. Helier,
Jersey, JE1 1BJ, Channel Islands.
Executive
Directors
D. Mark Bristow (50) Chief Executive Officer. We were
founded on Dr. Bristows pioneering work in West Africa. He
has subsequently led our growth through the discovery and
development of world-class assets into a major gold mining
business with a market capitalization of more than
$4.5 billion. He also played a significant part in
promoting the emergence of a sustainable mining industry in West
Africa. A geologist with more than 26 years
experience in the mining industry and a PhD from Natal
University, he has held board positions at a number of global
mining companies, and is currently a non-executive director of
Rockwell Resources International. Dr. Bristow was appointed
a director in August 1995 and Chief Executive Officer in October
1995. Prior to this he held executive responsibility for the
exploration and new business activities of Randgold &
Exploration from 1992 to 1995. During the period 1995 to 1997 he
also directed the re-engineering of the reserve management
functions of the gold mining of the Randgold &
Exploration Group and its affiliated gold mining companies.
Graham P. Shuttleworth (40) Chief Financial Officer;
Financial Director. Mr. Shuttleworth joined us as Chief
Financial Officer and Financial Director on July 1, 2007
but has been associated with Randgold Resources since its
inception, initially as part of the management team involved in
our listing on the London Stock Exchange in 1997, and
subsequently as an adviser. A chartered accountant, he was a
managing director and the New York-based head of metals and
mining for the Americas in the global investment banking
division of HSBC before taking his new position with us. At HSBC
he led or was involved in a wide range of major mining industry
transactions, including our Nasdaq listing, our bid for Ashanti
Goldfields and our 2005 equity offering.
Non-Executive
Directors
Philippe Liétard (60) Non-Executive Chairman;
Mr. Liétard was appointed a director in February 1998.
Mr. Liétard was managing director of the Global
Natural Resources Fund from 2000 to 2003. Prior to July 2000, he
was director of the Oil, Gas and Mining Department of the
International Finance Corporation. His experience in corporate
and project finance with UBS, IFC and the World Bank extends
over 30 years, most of them in the minerals business and in
Africa. Mr. Liétard is now an independent consultant
and a promoter of mining and energy investments. He was
appointed a director in February 1998 and chairman in November
2004.
Norborne P. Cole (67) Non-Executive Director. Chairman of
the remuneration committee and member of the nomination and
governance committee. Mr. Cole was appointed a director in
May 2006. Mr. Cole was CEO of
Coca-Cola
Amatil based in Sydney, Australia until 1998. Currently he is
vice-chairman of Silver Eagle Distributers of Houston, Texas and
a director of Lancer Corporation and Papa Johns
International Inc. Mr. Cole was appointed senior
independent director on May 5, 2009.
Christopher L. Coleman (41) Non-Executive Director; member
of the nomination and governance, remuneration and audit
committees. Mr. Coleman is co-head of banking at N M
Rothschild, a director of N M Rothschild & Sons,
chairman of Rothschild Bank International in the Channel Islands
and serves on a number of other boards and committees of the
Rothschild Group, which he joined in 1989. Mr. Coleman has
served as a non-executive director of the Merchant Bank of
Central Africa from 2001 to 2008. He was appointed a director in
November 2008.
Robert I. Israel (59) Non-Executive Director; Member of the
nomination and governance committee. Mr. Israel was
appointed a director in June 1997. Mr. Israel is a partner
at Compass Advisers, LLP. Until April 2000, Mr. Israel
served as a managing director of Schroder & Co. Inc.
and head of its Energy Department. He has 29 years of
experience in corporate finance, especially in the natural
resources sector.
38
Karl Voltaire (58) Non-Executive Director; Chairman of the
audit committee since May 5, 2009 and member of the
remuneration committee. Dr. Voltaire was appointed a
director in May 2006. He holds a Ph.D in finance from the
University of Chicago. He is currently the CEO of The Nelson
Mandela Institute and was previously a director of the African
Development Bank. Dr. Voltaire was formerly with the
International Finance Corporation where he was the director in
charge of Global Financial Markets.
Jonathan K. Walden (56) Non-Executive Director; Member of
the audit committee. Mr. Walden is Senior independent
director of Morgan Sindall plc. He was formerly the managing
director of Lex Vehicle Leasing, a subsidiary of HBOS and a main
board director at RAC plc. He was appointed a director in
November 2008.
Executive
Officers
David Haddon (51) General Counsel and Secretary. Having
overseen our administrative obligations from our incorporation
in 1995, Mr. Haddon assumed full secretarial responsibility
when we became listed on the London Stock Exchange in July 1997.
He has over 24 years of legal and administrative
experience. He assumed the responsibility as general counsel in
January 2004. He is a director of Seven Bridges Trading 14 (Pty)
Limited.
Paul Harbidge (39) General Manager Exploration.
Mr. Harbidge is a geologist with 16 years
experience, mainly in West Africa. He joined us in 2000 and was
appointed exploration manager in 2004 and general
manager exploration in November 2006.
Bill Houston (61) General Manager Human
Resources. Mr. Houston joined us in 1992 as group training
and development manager and currently heads the human resources
function. He has 28 years of human resources experience. He
is a director of Morila SA, Somilo SA and Seven Bridges Trading
14 (Pty) Limited.
Amadou Konta (51) General Manager Loulo.
Mr. Konta has a degree in civil engineering as well as
several management and project management qualifications. He was
appointed mine foreman and superintendent at Syama mine and
served as mine manager from 1997. In 2001 he was promoted as our
construction manager in Mali and was appointed Loulo general
manager on October 1, 2004.
Victor Matfield (44) General Manager Corporate
Finance. Mr. Matfield is a chartered accountant with
16 years experience in the mining industry. He was
appointed corporate finance manager in August 2001, prior to
that he served as financial manager of the Syama mine and of the
Morila capital project. He is a director of Seven Bridges
Trading 14 (Pty) Limited.
Chris Prinsloo (58) General Manager Commercial
and Operations. Mr. Prinsloo was appointed general manager
commercial and operations in April 2009 and prior to that he was
group financial manager. He has 36 years of experience in
the mining industry. He is a director of Somilo SA and Morila SA.
Rodney Quick (37) General Manager Project
Development, Evaluation and Environment. Mr. Quick is a
geologist with 15 years experience in the gold mining
industry. Since joining us in 1996, he has been involved in the
exploration, evaluation and production phases of the Morila,
Loulo and Tongon deposits and was appointed the Somilo resource
manager in 2006. He is now responsible for all project
development, evaluation and environmental issues.
Mahamadou Samaké (61) General Manager
Randgold Resources West Africa. Mr. Samaké is the
general manager for West Africa and is a director of our Malian
subsidiaries. He was a professor of company law at the
University of Mali.
John Steele (48) General Manager Capital
Projects. Mr. Steele has overseen the capital expansion
program at the Syama mine, and at the beginning of July 1998,
assumed the position of general manager capital projects for the
Randgold Resources Group, overseeing the construction of Morila.
He is a director of Somilo SA and Morila Limited and is
currently leading the Tongon construction project.
Samba Touré (55) General Manager Morila.
Mr. Touré has a masters degree in chemical engineering
and geochemistry and was part of the team that set up
Malis first research laboratory for the mining and
petroleum industries in 1985. As country manager for BHP
Minerals, he oversaw that companys exploration programs in
West Africa. He joined Morila in 2000 and was promoted to
operations manager in 2004 and general manager in 2007.
39
Tania de Welzim (33) Chief Accounting Officer; Group
Financial Manager. Ms. de Welzim was appointed group financial
manager in April 2009 and prior to that she was group financial
controller. She is a chartered accountant with ten years
experience in finance including eight years in the mining
industry. She is responsible for financial reporting in the
group as well as internal control procedures.
Luiz Correia (47): Operations Manager. A metallurgist with
21 years experience in the gold mining industry,
Mr. Correia has BSc Eng and BCom degrees. He joined us in
2005 and in 2006 was appointed operations manager responsible
for the mining, planning, processing, maintenance and
engineering functions at Loulo.
Philip Pretorius (45): Human Resources Manager.
Mr. Pretorius joined us in 2008, bringing with him
20 years of human resources experience of which the last
13 years were spent exclusively dealing with the West
African gold mining industry. He has been involved in
establishing various gold mining projects in Mali. He holds a
post-graduate diploma in management practices from the
University of Cape Town.
Lois Wark (54): Group Corporate Communications Manager. A member
of our team since our inception who assumed management of the
cartography department in 1995, Ms. Wark is responsible for
the coordination of the groups communication and investor
relations programs as well as for the management of its South
African subsidiary, Seven Bridges. She holds a diploma in land
surveying: cadastral and topographical.
Our Articles of Association provide that the longest serving
one-third of directors retire from office at each annual general
meeting. Retiring directors normally make themselves available
for re-election and are re-elected at the annual general meeting
on which they retire. Our officers who are also directors retire
as directors in terms of the Articles of Association, but their
service as officers is regulated by standard industry employment
agreements.
40
PRINCIPAL
SHAREHOLDERS
Major
Shareholders
As of June 30, 2009, our issued share capital consisted of
76,788,150 ordinary shares with a par value of $0.05 per share.
To our knowledge we are not, directly or indirectly, owned or
controlled by another corporation, any foreign government or
other person.
The following table sets forth information regarding the
beneficial ownership of our ordinary shares as of June 30,
2009, by:
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Any person of whom the directors are aware that is interested
directly or indirectly in 3% or more of our ordinary shares;
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Each of our directors; and
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All of our executive officers and directors as a group.
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Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power
with respect to securities. Ordinary shares issuable pursuant to
options, to the extent the options are currently exercisable or
convertible within 60 days of June 30, 2009, are
treated as outstanding for computing the percentage of the
person holding these securities but are not treated as
outstanding for computing the percentage of any other person.
Unless otherwise noted, each person or group identified
possesses sole voting and investment power with respect to the
shares, subject to community property laws where applicable.
Unless indicated otherwise, the business address of the
beneficial owners is: Randgold Resources Limited, La Motte
Chambers, La Motte Street, St Helier, Jersey, JE1 1BJ,
Channel Islands.
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Shares Beneficially Owned
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Holder
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Number
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%
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D.M. Bristow
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657,584
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0.86
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G.P. Shuttleworth(1)
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24,000
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0.03
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N.P. Cole, Jr.
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2,265
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0.00
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C.L. Coleman
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1,800
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0.00
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R.I. Israel
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40,201
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0.05
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P. Liétard
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31,765
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0.04
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K. Voltaire
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2,265
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0.00
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J.K. Walden
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400
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0.00
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BNY (Nominees) Limited(2)
30 Cannon Street
London EC4M XH
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55,652,796
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72.48
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Wells Fargo & Company(3)
420 Montgomery Street
San Francisco, CA 94104
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6,470,274
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8.43
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FMR LLC(4)
82 Devonshire Street
Boston, MA 02109
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11,476,298
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14.95
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Directors and executive officers(5)
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762,182
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0.99
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(1) |
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Mr. G.P. Shuttleworth was awarded 36,000 restricted shares
in terms of his employment contract. The first tranche of
12,000 shares vested on July 1, 2008 and the second
tranche vested on July 1, 2009. |
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(2) |
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Shares held by BNY (Nominees) Ltd are held for, and on behalf
of, our ADS holders. |
41
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(3) |
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Wells Fargo & Company reported in its
Schedule 13G filed with the Securities and Exchange
Commission on May 1, 2009 that its beneficial ownership in
us amounted to 6,470,274 ordinary shares (8.44%) on a
consolidated basis. These shares are included in the shares held
by BNY (Nominees) Limited. |
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(4) |
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FMR LLC reported in its Schedule 13G filed with the
Securities and Exchange Commission that as at February 17,
2009 its beneficial ownership in us amounted to 11,476,298
ordinary shares (15%) on a consolidated basis. These shares are
included in the shares held by BNY (Nominees) Limited. |
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(5) |
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No executive officer beneficially owns in excess of 1% of the
outstanding ordinary shares. |
To the knowledge of management, none of the above shareholders
hold voting rights which are different from those held by our
other shareholders.
As of June 30, 2009, there was 1 record holder of our
ordinary shares in the United States, holding an aggregate of
31,765 ordinary shares or 0.04%.
As of June 30, 2009, there were 38 record holders of our
ADSs in the United States, holding an aggregate of 55,652,796
ADSs or 72.48%.
42
MARKET
INFORMATION
Our ordinary shares are listed on the London Stock Exchange,
which currently constitutes the principal
non-United
States trading market for those shares, under the symbol RRS and
our ADSs trade in the United States on the Nasdaq Global Select
Market under the trading symbol GOLD, in the form of American
Depositary Receipts. The ADSs are delivered by The Bank of New
York Mellon, as Depositary. Each American Depositary Receipt
represents one American Depositary Share. Each American
Depositary Share represents one of our ordinary shares.
The following table sets forth, for the periods indicated, the
high and low sales prices of our ordinary shares, as reported by
the London Stock Exchange, and of our ADSs, as reported by the
Nasdaq Global Select Market. Effective March 10, 2003, we
changed the ratio of ordinary shares to ADSs from two ordinary
shares per ADS to one ordinary share per ADS, so that each ADS
now represents one ordinary share. In March 2003 we changed the
currency in which the price of our ordinary shares that are
traded on the London Stock Exchange are quoted. The ordinary
shares are now quoted in pound sterling and not in US dollars.
The ADSs continue to be quoted on the London Stock Exchange and
the Nasdaq Global Select Market in US dollars.
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Price Per Ordinary Share
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Price Per ADS
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Financial Period Ended
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High (£)
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Low (£)
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High ($)
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Low ($)
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December 31, 2008
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30.00
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15.57
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55.65
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23.45
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December 31, 2007
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19.50
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10.53
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38.86
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21.04
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December 31, 2006
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14.08
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9.09
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26.32
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15.88
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December 31, 2005
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9.67
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5.31
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18.69
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10.13
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December 31, 2004
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7.82
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4.29
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14.26
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7.77
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Price Per Ordinary Share
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Price Per ADS
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Calendar Period
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High (£)
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Low (£)
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High ($)
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Low ($)
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2009
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|
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Second Quarter
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44.49
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28.23
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73.96
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41.59
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First Quarter
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37.76
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25.10
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54.35
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36.65
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2008
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Fourth Quarter
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30.00
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15.57
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44.68
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23.45
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Third Quarter
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27.47
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18.00
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54.73
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32.47
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Second Quarter
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28.03
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19.19
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55.26
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37.28
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First Quarter
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27.59
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18.62
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55.65
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37.22
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2007
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Fourth Quarter
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19.50
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15.06
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38.86
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30.90
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Third Quarter
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16.60
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10.60
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33.24
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21.62
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Second Quarter
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13.00
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10.53
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26.24
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21.41
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First Quarter
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12.47
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10.79
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24.68
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21.04
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Price Per Ordinary Share
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Price Per ADS
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Calendar Month
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High (£)
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Low (£)
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High ($)
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Low ($)
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2009
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July (through July 24)
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40
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.80
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35
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.98
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67
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.25
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58
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.02
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June
|
|
|
44
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.49
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38
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.48
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|
73
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.96
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|
61
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.65
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May
|
|
|
43
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.97
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|
33
|
.33
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|
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69
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.88
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49
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.56
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April
|
|
|
38
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.83
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|
|
|
28
|
.23
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|
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|
56
|
.89
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|
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41
|
.59
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March
|
|
|
37
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.76
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|
|
|
30
|
.00
|
|
|
|
54
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.35
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|
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|
43
|
.34
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February
|
|
|
34
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.98
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|
|
|
30
|
.30
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|
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|
50
|
.08
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|
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42
|
.37
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January
|
|
|
31
|
.75
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|
|
|
25
|
.10
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|
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|
45
|
.75
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36
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.76
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43
DESCRIPTION
OF OUR MEMORANDUM
AND ARTICLES OF ASSOCIATION AND ORDINARY SHARES
General
We are a company organized with limited liability under the laws
of Jersey, Channel Islands. Our registered number is 62686.
The authorized share capital is $5,000,000 divided into
100,000,000 ordinary shares of $0.05 each, of which 76,788,150
were issued as of June 30, 2009 and 23,211,850 were
available for issue.
At the annual general meeting held on April 28, 2008,
shareholders approved a resolution which authorized an increase
in the authorized share capital of the company from $4,000,000
divided into 80,000,000 ordinary shares of $0.05 each to
$5,000,000 divided into 100,000,000 ordinary shares of $0.05
each.
At the annual general meeting held on April 26, 2004,
shareholders approved a resolution which authorized a share
split which amended our authorized share capital from $4,000,000
divided into 40,000,000 ordinary shares of $0.10 each to
$4,000,000 divided into 80,000,000 ordinary shares of $0.05
each. The issued share capital therefore increased from
29,263,385 to 58,526,770 ordinary shares with effect from
June 11, 2004. None of our shares have any redemption
rights.
Memorandum
of Association
Clause 2 of our Memorandum of Association provides that we
shall have all the powers of a natural person including but not
limited to the power to carry on mining, exploration or
prospecting.
Changes
in Capital or Objects and Powers
Subject to the 1991 Law and our Articles of Association, we may
by special resolution at a general meeting:
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increase our authorized or paid up share capital;
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consolidate and divide all or any part of our shares into shares
of a larger amount;
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sub-divide all or any part of our shares having a par value;
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convert any of our issued or unissued shares into shares of
another class;
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convert any of our
paid-up
shares into stock, and reconvert any stock into any number of
paid-up
shares of any denomination;
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convert any of our issued shares into redeemable shares which
can be redeemed;
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cancel shares which, at the date of passing of the resolution,
have not been taken or agreed to be taken by any person, and
diminish the amount of the authorized share capital by the
amount of the shares so cancelled;
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reduce the authorized share capital;
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reduce our issued share capital; or
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alter our Memorandum or Articles of Association.
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Articles
of Association
We adopted our Articles of Association by special resolution
passed on June 24, 1997. Our Articles of Association
include provisions to the following effect:
General
Meeting of Shareholders
We may at any time convene general meetings of shareholders. We
hold an annual general meeting for each fiscal year within nine
months of the end of each fiscal year. No more than eighteen
months may elapse between the date of one annual general meeting
and the next.
44
Annual general meetings and meetings calling for the passing of
a special resolution require twenty-one days notice of the
place, day and time of the meeting in writing to our
shareholders. Any other general meeting requires no less than
fourteen days notice in writing. Our business may be
transacted at a general meeting only when a quorum of
shareholders is present. Two persons entitled to attend and to
vote on the business to be transacted, each being a member or a
proxy for a member or a duly authorized representative of a
corporation which is a member, constitute a quorum.
Nasdaqs marketplace rules, which apply to all companies
listed on the Nasdaq Global Select Market, state in
Rule 4350(f) that the minimum quorum for any meeting of
holders of a companys common stock is 33 1 / 3%
of the outstanding shares. As a result, we requested, and Nasdaq
granted to us, an exemption from compliance with the
Rule 4350(f) requirement.
The annual general meetings deal with and dispose of all matters
prescribed by our Articles of Association and by the 1991 Law
including:
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the consideration of our annual financial statements and report
of our independent accountants;
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the election of directors; and
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the appointment of independent auditors.
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Voting
Rights
Subject to any special terms as to voting on which any shares
may have been issued or may from time to time be held, at a
general meeting, every shareholder who is present in person
(including any corporation present by its duly authorized
representative) shall on a show of hands have one vote and every
shareholder present in person or by proxy shall on a poll have
one vote for each share of which he is a holder. In the case of
joint holders, the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders.
Unless we otherwise determine, no shareholder is entitled to
vote at a general meeting or at a separate meeting of the
holders of any class of shares, either in person or by proxy, or
to exercise any other right or privilege as a shareholder in
respect of any share held by him unless all calls presently
payable by him in respect of that share, whether alone or
jointly with any other person, together with interest and
expenses, if any, have been paid to us.
Dividends
Subject to the provisions of the 1991 Law and of the Articles of
Association, we may, by ordinary resolution, declare dividends
to be paid to shareholders according to their respective rights
and interests in our profits. However, no dividend shall exceed
the amount recommended by us. Subject to the provisions of the
1991 Law, we may pay an interim dividend, including a dividend
payable at a fixed rate, if an interim dividend appears to us to
be justified by our profits available for distribution.
Except as otherwise provided by the rights attached to any
shares, all dividends shall be declared and paid according to
the amounts paid up, otherwise than in advance of calls, on the
shares on which the dividend is paid. All dividends unclaimed
for a period of 12 years after having been declared or
become due for payment shall, if we so resolve, be forfeited and
shall cease to remain owing by us.
We may, with the authority of an ordinary resolution, direct
that payment of any dividend declared may be satisfied wholly or
partly by the distribution of assets, and in particular of paid
up shares or debentures of any other company, or in any one or
more of those ways.
We may also with the prior authority of an ordinary resolution,
and subject to such conditions as we may determine, offer to
holders of shares the right to elect to receive shares, credited
as fully paid, instead of the whole, or some part, to be
determined by us, of any dividend specified by the ordinary
resolution.
Ownership
Limitations
Our Articles of Association and the 1991 Law do not contain
limits on the number of shares that a shareholder may own.
45
Distribution
of Assets on a
Winding-Up
If we are wound up, the liquidator may, with the sanction of a
special resolution and any other sanction required by law,
divide among the shareholders in specie the whole or any part of
our assets and may, for that purpose, value any assets and
determine how the dividend shall be carried out as between the
shareholders or vest the whole or any part of the assets in
trustees on such trusts for the benefit of the shareholders as
he with the like sanction shall determine but no shareholder
shall be compelled to accept any assets on which there is a
liability.
Transfer
of Shares
Every shareholder may transfer all or any of his shares by
instrument of transfer in writing in any usual form or in any
form approved by us. The instrument must be executed by or on
behalf of the transferor and, in the case of a transfer of a
share which is not fully paid up, by or on behalf of the
transferee. The transferor is deemed to remain the holder until
the transferees name is entered in the register of
shareholders.
We may, in our absolute discretion and without giving any
reason, refuse to register any transfer of a share or
renunciation of a renounceable letter of allotment unless:
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it is in respect of a share which is fully paid up;
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it is in respect of only one class of shares;
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it is in favor of a single transferee or not more than four
joint transferees;
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it is duly stamped, if so required; and
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it is delivered for registration to our registered office for
the time being or another place that we may from time to time
determine accompanied by the certificate for the shares to which
it relates and any other evidence as we may reasonably require
to prove the title of the transferor or person renouncing and
the due execution of the transfer or renunciation by him or, if
the transfer or renunciation is executed by some other person on
his behalf, the authority of that person to do so; provided that
we shall not refuse to register any transfer of partly paid
shares which are listed on the grounds they are partly paid
shares in circumstances where our refusal would prevent dealings
in those shares from taking place on an open and proper basis.
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Variation
of Rights
If at any time our share capital is divided into shares of
different classes, any of the rights for the time being attached
to any share or class of shares may be varied or abrogated in
the manner, if any, that is provided by the rights or, in the
absence of any such provision, either with the consent in
writing of the holders of not less than three-quarters in
nominal value of the issued shares of the class or with the
sanction of a resolution passed by the holders of not less than
three-quarters in nominal value of the issued shares of that
class at a separate general meeting of the holders of shares of
the class. The quorum at that meeting shall be not less than two
persons holding or representing by proxy at least one-third of
the nominal amount paid up on the issued shares of the class in
question and at an adjourned meeting not less than one person
holding shares of the class in question or his proxy.
Subject to the terms of issue of or rights attached to any
shares, the rights or privileges attached to any class of shares
shall be deemed not to be varied or abrogated by the creation or
issue of any new shares ranking equally in all respects, except
as to the date from which those new shares shall rank for
dividend, with or subsequent to those already issued or by the
reduction of the capital paid up on those shares or by the
purchase or redemption by us of our own shares in accordance
with the provisions of the 1991 Law and the Articles.
Capital
Calls
Subject to the terms of allotment of shares, we may from time to
time make calls on the members in respect of any monies unpaid
on the shares, whether in respect of nominal value or premium,
and not payable on a fixed date. A member must receive fourteen
days notice of any call and any call is deemed to be made
when the resolution of the board authorizing such call was
passed.
46
If any call is not paid on or before the date appointed for
payment, the person liable to pay that call shall pay all costs,
charges and expenses of ours in connection with the non-payment,
including interest on the unpaid amount, if requested by us.
Unless we otherwise determine, no member shall be entitled to
receive any dividend or to be present and vote at any general
meeting, or be included in a quorum, or to exercise any other
right or privilege as a shareholder unless and until any
outstanding calls in respect of his shares are paid.
Borrowing
Powers
We may exercise all of our powers to borrow money and to
mortgage or charge all or any part of our undertaking, property
and assets, present and future, and uncalled capital and,
subject to the provisions of the 1991 Law, to create and issue
debenture and other loan stock and other securities, whether
outright or as collateral security for any debt, liability or
obligation of ours or of any third party.
Issue
of Shares and Preemptive Rights
Subject to the provisions of the 1991 Law and to any special
rights attached to any shares, we may allot or issue shares with
those preferred, deferred or other special rights or
restrictions regarding dividends, voting, transfer, return of
capital or other matters as we may from time to time determine
by ordinary resolution, or if no ordinary resolution has been
passed or an ordinary resolution does not make specific
provision, as we may determine. We may issue shares that are
redeemable or are liable to be redeemed at our option or the
option of the holder in accordance with our Articles of
Association. Subject to the provisions of the 1991 Law the
unissued shares at the date of adoption of the Articles of
Association and shares created thereafter shall be at our
disposal. We cannot issue shares at a discount.
There are no pre-emptive rights for the transfer of our shares
either within the 1991 Law or our Articles of Association.
Meetings
of the Board of Directors
Any director may, and the secretary at the request of a director
shall, call a board meeting at any time on reasonable notice. A
director may waive this notice requirement.
Subject to our Articles of Association our board of directors
may meet for the conducting of business, adjourn and otherwise
regulate its proceedings as it sees fit. The quorum necessary
for the transaction of business may be determined by the board
of directors and unless otherwise determined shall be two
persons, each being a director or an alternate director. A duly
convened meeting of the board of directors at which a quorum is
present is necessary to exercise all or any of the boards
authorities, powers and discretions.
Our board of directors may delegate or entrust to and confer on
any director holding an executive office any of its powers,
authorities and discretions for such time, on such terms and
subject to such conditions as it sees fit. Our board of
directors may also delegate any of its powers, authorities and
discretions for such time and on such terms and subject to such
conditions as it sees fit to any committee consisting of one or
more directors and one or more other persons, provided that a
majority of the members of the committee should be directors.
Remuneration
of Directors
Our directors (other than alternate directors) shall be entitled
to receive by way of fees for their services as directors any
sum that we may from time to time determine, not exceeding in
aggregate $300,000 per annum or any other sum as we, by ordinary
resolution in a general meeting, shall from time to time
determine. That sum, unless otherwise directed by ordinary
resolution of us by which it is voted, shall be divided among
the directors in the proportions and in the manner that the
board determines or, if the board has not made a determination,
equally. The directors are entitled to be repaid all traveling,
hotel and other expenses properly incurred by them in or about
the performance of their duties as directors.
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The salary or remuneration of any director appointed to hold any
employment or executive office may be either a fixed sum of
money, or may altogether or in part be governed by business done
or profits made or otherwise determined by us, and may be in
addition to or in lieu of any fee payable to him for his
services as director.
Pensions
and Gratuities for Directors
We may exercise all of our powers to provide and maintain
pensions, other retirement or superannuation benefits, death or
disability benefits or other allowances or gratuities for
persons who are or were directors of any company in our group
and their relatives or dependants.
Directors
Interests in Contracts
Subject to the provisions of the 1991 Law and provided that his
interest is disclosed as soon as practicable after a director
becomes aware of the circumstances which gave rise to his duty
to disclose in accordance with the Articles of Association, a
director, notwithstanding his office, may enter into or
otherwise be interested in any contract, arrangement,
transaction or proposal with us, or in which we are otherwise
interested, may hold any other office or place of profit under
us (except that of auditor of, or of a subsidiary of ours) in
conjunction with the office of director and may act by himself
or through his firm in a professional capacity for us, and in
any such case on such terms as to remuneration and otherwise as
we may arrange, and may be a director or other officer of, or
employed by, or a party to any transaction or arrangement with,
or otherwise interested in, any company promoted by us or in
which we are otherwise interested and shall not be liable to
account to us for any profit, remuneration or other benefit
realized by any such office, employment, contract, arrangement,
transaction or proposal.
No such contract, arrangement, transaction or proposal shall be
avoided on the grounds of any such interest or benefit.
Restrictions
on Directors Voting
Except as provided in our Articles of Association, a director
shall not vote on, or be counted in the quorum in relation to,
any resolution of the board or of a committee of the board
concerning any contract, arrangement, transaction or any other
proposal whatsoever to which we are or will be a party and in
which he has an interest which (together with an interest of any
person connected with him) is to his knowledge a material
interest otherwise than by virtue of his interests in shares or
debentures or other securities of or otherwise in or through us,
unless the resolution concerns any of the following matters:
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the giving of any guarantee, security, or indemnity in respect
of money lent or obligations incurred by him or any other person
at the request of or for the benefit of us or any of our
subsidiary undertakings;
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the giving of any guarantee, security or indemnity in respect of
a debt or obligation of ours or any of our subsidiary
undertakings for which he himself has assumed responsibility in
whole or in part under a guarantee or indemnity or by the giving
of security;
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any proposal concerning an offer of shares or debentures or
other securities of or by us or any of our subsidiary
undertakings in which offer he is or may be entitled to
participate as a holder of securities or in the underwriting or
sub-underwriting of which he is to participate;
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any proposal concerning any other body corporate in which he
(together with persons connected with him) does not to his
knowledge have an interest in 1% or more of the issued equity
share capital of any class of that body corporate or of the
voting rights available to shareholders of that body corporate;
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any proposal relating to an arrangement for the benefit of our
employees or the employees of any of our subsidiary undertakings
which does not award him any privilege or benefit not generally
awarded to the employees to whom the arrangement relates; or
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any proposal concerning insurance which we propose to maintain
or purchase for the benefit of directors or for the benefit of
persons who include directors.
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A director shall not vote or be counted in the quorum for any
resolution of the board or committee of the board concerning his
own appointment (including fixing or varying the terms of his
appointment or termination) as the holder of any office or place
of profit with us or any company in which we are interested.
Number
of Directors
Unless and until otherwise determined by a special resolution,
the number of directors shall be not less than two or more than
20.
Directors
Appointment and Retirement by Rotation
Directors may be appointed by ordinary shareholder resolution or
by the board. If appointed by ordinary resolution, a director
holds office only until the next annual general meeting and
shall not be taken into account in determining the number of
directors who are to retire by rotation. A director shall not be
required to hold any of our shares.
At each annual general meeting, one-third of the directors who
are subject to retirement by rotation will retire by rotation
and be eligible for re-election. Subject to the provisions of
the 1991 Law and to the Articles, the directors to retire will,
first, be any director who wishes to retire and not offer
himself for re-election and secondly, will be those who have
been longest in office since their last appointment or
re-appointment, but as between those who have been in office an
equal length of time, those to retire shall (unless they
otherwise agree) be determined by lot. There is no age limit
imposed upon directors.
Untraced
Shareholders
Subject to the Articles, we may sell any of our shares
registered in the name of a shareholder remaining untraced for
12 years who fails to communicate with us following
advertisement of an intention to make such a disposal. Until we
can account to the shareholder, the net proceeds of sale will be
available for use in our business or for investment, in either
case at our discretion. The proceeds will not carry interest.
CREST
The Companies (Amendment No. 4) (Jersey) Law 1998 and the
Companies (Uncertificated Securities) (Jersey) Order 1999 allow
the holding and transfer of shares under CREST, the electronic
system for settlement of securities in the United Kingdom. Our
Articles of Association already provide for our shares to be
held in uncertificated form under the CREST system.
Purchase
of Shares
Subject to the provisions of the 1991 Law, we may purchase any
of our own shares of any class. The 1991 Law provides that we
may, by special resolution approve the acquisition of our own
shares from any source, but only if they are fully paid.
Non-Jersey
Shareholders
There are no limitations imposed by Jersey law or by our
Articles of Association on the rights of non-Jersey shareholders
to hold or vote on our ordinary shares or securities convertible
into our ordinary shares.
Rights of
Minority Shareholders and Fiduciary Duties
Majority shareholders of Jersey companies have no fiduciary
obligations under Jersey law to minority shareholders. However,
under the 1991 Law, a shareholder may, under some circumstances,
seek relief from the court if he has been unfairly prejudiced by
us. The provisions of the 1991 Law are designed to provide
relief from oppressed shareholders without necessarily
overriding the majoritys decision. There may also be
common law personal actions available to our shareholders.
49
Jersey
Law and Our Memorandum and Articles of Association
The content of our Memorandum and Articles of Association is
largely derived from an established body of corporate law and
therefore they mirror the 1991 Law. Jersey company law draws
very heavily from company law in England and there are various
similarities between the 1991 Law and the English Companies Act
1985 (as amended). However, the 1991 Law is considerably shorter
in content than the English Companies Act 1985 and there are
some notable differences between English and Jersey company law.
There are, for example, no provisions under Jersey law (as there
are under English law):
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controlling possible conflicts of interests between us and our
directors, such as loans by us or directors, and contracts
between us and our directors other than a duty on directors to
disclose an interest in any transaction to be entered into by us
or any of our subsidiaries which to a material extent conflicts
with our interest;
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specifically requiring particulars to be shown in our accounts
of the amount of loans to officers or directors emoluments
and pensions, although these would probably be required to be
shown in our accounts in conformity to the requirement that
accounts must be prepared in accordance with generally accepted
accounting principles;
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requiring us to file details of charges other than charges of
Jersey realty; or
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as regards statutory preemption provisions in relation to
further issues of shares.
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Under Article 143 of the 1991 Law, the court may make an
order giving relief, including regulation of our affairs
requiring us to refrain from doing or continuing to do an act
complained of, authorizing civil proceedings and providing for
the purchase of shares by any of our other shareholders.
The court has wide powers within its inherent jurisdiction and a
shareholder could successfully bring an action in a variety of
circumstances. Although there is no statutory definition of
unfairly prejudicial conduct, authority suggests that it
includes oppression and discrimination and that the test is
objective.
There are no provisions in our Memorandum or Articles of
Association concerning changes of capital where these provisions
would be considered more restrictive than that required by the
1991 Law.
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DESCRIPTION
OF AMERICAN DEPOSITARY SHARES
This section summarizes the material provisions of the Deposit
Agreement, dated as of July 1, 1997, and amended and
restated as of June 26, 2002, and further amended and
restated as of July 10, 2002, among us, The Bank of New
York Mellon, as depositary, and all registered owners and
holders from time to time of ADRs issued under the Deposit
Agreement. All references in this section to The Bank of New
York Mellon refer to The Bank of New York Mellon or its
successor in the capacity of depositary under the Deposit
Agreement.
A copy of the Deposit Agreement, including the form of ADR, has
been filed as an exhibit to the registration statement of which
this prospectus forms a part. A copy of the Deposit Agreement
will be available for inspection at the Corporate
Trust Office of The Bank of New York Mellon, currently
located at 101 Barclay Street, New York, New York 10286. The
Bank of New York Mellons principal executive office is
located at One Wall Street, New York, New York 10286.
The Bank of New York Mellon is incorporated and operates under
the laws of the State of New York. The Bank of New York Mellon
is a state-chartered New York banking corporation and a member
of the United States Federal Reserve System, subject to
regulation and supervision principally by the United States
Federal Reserve Board and the New York State Banking Department.
The Bank of New York Mellon was constituted in 1784 in the State
of New York. It does not have a registration number. It is a
wholly owned subsidiary of The Bank of New York Mellon
Corporation, a New York corporation.
As an ADS holder, we will not treat you as one of our
shareholders and you will not have shareholder rights. Jersey
law governs shareholder rights. The Bank of New York Mellon will
be the holder of the ordinary shares underlying your ADSs. As a
holder of ADSs, you will have ADS holder rights. The deposit
agreement sets out ADS holder rights as well as the rights and
obligations of The Bank of New York Mellon as depositary. New
York law governs the deposit agreement and the ADSs.
You may hold ADSs either (A) directly (i) by having an
American Depositary Receipt, or ADR, which is a certificate
evidencing a specific number of ADSs, registered in your name,
or (ii) by holding ADSs in the Direct Registration System,
or DRS, or (B) indirectly through your broker or other
financial institution. If you hold ADSs directly, you are an ADS
holder. This description assumes you hold your ADSs directly. If
you hold the ADSs indirectly, you must rely on the procedures of
your broker or other financial institution to assert the rights
of ADS holders described in this section. You should consult
with your broker or financial institution to find out what those
procedures are.
The ADRs evidence ADSs, which in turn represent ownership
interests in:
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ordinary shares deposited with the custodian, currently the
London, England office of The Bank of New York Mellon, and the
rights attributable to those ordinary shares; and
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securities, cash or other property received by The Bank of New
York Mellon or by the custodian in respect of the ordinary
shares deposited with the custodian, but not distributed to ADS
owners.
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Share
Dividends and Other Distributions
How
will you Receive Dividends and other Distributions on
Shares?
The Bank of New York Mellon will pay to you the cash dividends
or other distributions it or the custodian receives on the
ordinary shares or other deposited securities, after deducting
its fees and expenses. You will receive these distributions in
proportion to the number of ordinary shares the ADSs evidenced
by your ADRs represent.
Cash
The Bank of New York Mellon will convert any cash dividend or
distribution that we pay on the ordinary shares, if in a foreign
currency, into US dollars. If any government approval of the
conversion is needed and cannot be obtained or is not obtained
within a reasonable amount of time, or if the conversion is
otherwise not possible on a reasonable basis, The Bank of New
York Mellon may distribute the foreign currency only to those
ADS holders to whom it is possible to do so or may hold the
foreign currency it cannot convert for the account of the ADS
holders
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who have not been paid. The Bank of New York Mellon may hold the
foreign currency without investing it, and will not be required
to pay you any interest if it does so.
Before making a distribution, The Bank of New York Mellon will
deduct any withholding taxes that must be paid under applicable
laws. It will distribute only whole US dollars and cents and
will round any fractional amounts to the nearest whole cent. If
the exchange rates fluctuate during a time when The Bank of New
York Mellon cannot convert the foreign currency, you may lose
some or all of the value of the distribution.
Shares
The Bank of New York Mellon may, and will if we so request,
distribute new ADSs representing any ordinary shares that we
distribute as a dividend or free distribution, if we furnish The
Bank of New York Mellon promptly with satisfactory evidence that
it is legal to do so. The Bank of New York Mellon will only
distribute whole ADSs. It will sell ordinary shares which would
require it to deliver a fractional ADS and distribute the net
proceeds to the holders entitled to those shares. If The Bank of
New York Mellon does not distribute additional cash or ADSs, the
outstanding ADSs will also represent the new ordinary shares.
Each ADS currently represents one ordinary share.
Rights
If we offer holders of securities any rights, including rights
to subscribe for additional ordinary shares, The Bank of New
York Mellon may make these rights available to you and has the
authority to set the procedures for any offer to you. We must
first instruct The Bank of New York Mellon to do so and furnish
it with satisfactory evidence that it is legal to do so. If we
do not furnish this evidence
and/or give
these instructions, and The Bank of New York Mellon determines
that it is practical to sell the rights, The Bank of New York
Mellon may sell the rights and allocate the net proceeds to
holders accounts. The Bank of New York Mellon may allow
rights that are not distributed or sold to lapse. In that case,
you will receive no value for them.
If The Bank of New York Mellon makes rights available to you,
upon instruction from you it will exercise the rights and
purchase the ordinary shares on your behalf. The Bank of New
York Mellon will then deposit the ordinary shares and deliver
ADSs to you. It will only exercise rights if you pay The Bank of
New York Mellon the exercise price and any charges the rights
require you to pay.
The Bank of New York Mellon will not offer you rights unless
those rights and the securities to which the rights relate are
either exempt from registration or have been registered under
the Securities Act with respect to a distribution to you.
Other
Distributions
The Bank of New York Mellon will send to you any other property
that we distribute on deposited securities by any means The Bank
of New York Mellon thinks is legal, fair and practical. If it
cannot make the distribution in that way, The Bank of New York
Mellon may decide to sell what we distributed; for example by
public or private sale, and distribute the net proceeds, in the
same way as it does with cash, or it may decide to hold what we
distributed, in which case the outstanding ADSs will also
represent the newly distributed property.
The Bank of New York Mellon is not responsible if it decides
that it is unlawful or impractical to make a distribution
available to any ADS holder. For example, The Bank of New York
Mellon may decide that a distribution of cash to ADS holders is
illegal where any applicable foreign currency control would
prohibit it, or that a share or rights distribution to ADS
holders is illegal if the underlying securities have not been
registered or are not being offered under an available exemption
from registration requirements. A distribution to ADS holders
may be impractical if we do not give timely or sufficient notice
of the proposed distribution to The Bank of New York Mellon or
if the costs of the distribution exceed the value the holders
would receive from the distribution. We will have no obligation
to take any other action to permit the distribution of ADSs,
ordinary shares, rights or anything else to ADS holders. This
means that you may not receive the distribution we make on our
ordinary shares or any value for them if it is illegal or
impractical for us to make them available to you.
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Deposit,
Withdrawal and Cancellation
How
does The Bank of New York Mellon deliver ADSs?
The Bank of New York Mellon will deliver the ADSs that you are
entitled to receive against deposit of the underlying ordinary
shares represented by the ADSs. The Bank of New York Mellon will
deliver additional ADSs if you or your broker deposit ordinary
shares with the custodian. You must also deliver evidence
satisfactory to The Bank of New York Mellon of any necessary
approvals of the governmental agency in Jersey, if any, which is
responsible for regulating currency exchange at that time. If
required by The Bank of New York Mellon, you must in addition
deliver an agreement transferring your rights as a shareholder
to receive dividends on other property. Upon payment of its fees
and of any taxes or charges, The Bank of New York Mellon will
register the appropriate number of ADSs in the names you request
and will deliver the ADSs at its Corporate Trust Office to
the persons you request.
How do
you cancel an ADS and obtain ordinary shares?
You may submit a written request to withdraw ordinary shares and
turn in your ADSs at the Corporate Trust Office of The Bank
of New York Mellon. Upon payment of its fees and of any taxes or
charges, such as stamp taxes or stock transfer taxes, The Bank
of New York Mellon will deliver the deposited securities
underlying the ADSs evidenced by the surrendered ADRs to an
account designated by you at the office of the custodian. At
your request, risk and expense, The Bank of New York Mellon may
deliver at its Corporate Trust Office any dividends or
distributions with respect to the deposited securities
underlying the ADSs evidenced by your ADRs, or any proceeds from
the sale of any dividends, distributions or rights, which may be
held by The Bank of New York Mellon.
Record
Dates
Whenever any distribution of cash or rights, change in the
number of ordinary shares represented by ADSs or notice of a
meeting of holders of ordinary shares or other deposited
securities is made, The Bank of New York Mellon will fix a
record date for the determination of the owners entitled to
receive the benefits, rights or notice.
Voting of
Deposited Securities
How do
you Vote?
If you are an ADS holder on a record date fixed by The Bank of
New York Mellon, you may instruct The Bank of New York Mellon
how to exercise the voting rights of the ordinary shares or
other deposited securities underlying the ADSs evidenced by your
ADRs. Otherwise, you wont be able to exercise your right
to vote unless you withdraw the ordinary shares or other
deposited securities. However, you may not know about the
meeting enough in advance to withdraw the ordinary shares or
other deposited securities.
If we ask for your instructions, The Bank of New York Mellon
will notify you of the upcoming meeting and arrange to deliver
the relevant materials to you. The materials will:
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include all information included with the meeting notice sent by
us to The Bank of New York Mellon;
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explain how you may instruct The Bank of New York Mellon to vote
the ordinary shares or other deposited securities underlying the
ADSs evidenced by your ADRs as you direct; and
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include a voting instruction card and any other information
required under Jersey law that we and The Bank of New York
Mellon will prepare.
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For instructions to be valid, The Bank of New York Mellon must
receive them on or before the date established by The Bank of
New York Mellon. The Bank of New York Mellon will try, to the
extent practical, subject to applicable law and the provisions
of our Articles of Association, to vote or have its agents vote
the underlying ordinary shares or other deposited securities as
you instruct. The Bank of New York Mellon will only vote, or
attempt to vote, as you instruct. However, if The Bank of New
York Mellon does not receive your voting instructions, it may
give a proxy to vote your underlying ordinary shares or other
deposited securities to our designated representative.
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We cannot assure that you will receive the voting materials or
otherwise learn of a shareholders meeting in time to
ensure that you can instruct The Bank of New York Mellon to vote
your underlying ordinary shares or other deposited securities.
In addition, The Bank of New York Mellon and its agents are not
responsible for failing to carry out voting instructions or for
the manner of carrying out voting instructions. This means that
you may not be able to exercise your right to vote and there may
be nothing you can do if your underlying ordinary shares or
other deposited securities are not voted as you requested.
Inspection
of Transfer Books
The Bank of New York Mellon will keep books for the registration
and transfer of ADSs. These books will be open at all reasonable
times for inspection by you, provided that you are inspecting
the books for a purpose related to us, the Deposit Agreement or
the ADSs.
Reports
and Other Communications
The Bank of New York Mellon will make available for your
inspection any reports or communications, including any proxy
material, received from us, as long as these materials are
received by The Bank of New York Mellon as the holder of the
ordinary shares or other deposited securities underlying the
ADSs and are generally available to our shareholders. At our
written request, The Bank of New York Mellon will also send
copies of reports, notices and communications to you.
Fees and
Expenses
The Bank of New York Mellon will charge any party depositing or
withdrawing ordinary shares or other deposited securities or any
party surrendering ADSs or to whom ADSs are delivered:
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For:
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ADS Holders Must Pay:
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each issuance of an ADS, including as a result of a distribution
of shares or rights or other property or upon exercise of a
warrant
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$5.00 or less per 100 ADSs or portion thereof
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each surrender of an ADS for withdrawal of the ordinary shares
and other deposited securities underlying the ADS evidenced by
the surrendered ADR, including if the Deposit Agreement is
terminated
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$5.00 or less per 100 ADSs or portion thereof
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each cash distribution pursuant to the Deposit Agreement
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$0.02 or less per ADS or portion thereof
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depositary services
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$0.02 or less per ADS or portion thereof, which will accrue on
December 31 of each year, except in years in which the fee
described in the preceding bullet point was charged
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transfer and registration of shares on our share register from
your name to the name of The Bank of New York Mellon or its
agent when you deposit, substitute or withdraw ordinary shares
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registration or transfer fees
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conversion of foreign currency to US dollars
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expenses of The Bank of New York Mellon
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cable, telex and facsimile transmission expenses, expressly
provided in the Deposit Agreement
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expenses of The Bank of New York Mellon
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as necessary
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taxes and governmental charges The Bank of New York Mellon or
custodian has to pay on any ADS or ordinary share or other
deposited security underlying an ADS; for example, withholding
taxes, stamp duty or stock transfer taxes
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Payment
of Taxes
You will be responsible for any taxes or other governmental
charges payable on your ADSs or on the ordinary shares and any
other deposited securities underlying your ADSs. The Bank of New
York Mellon may:
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deduct the amount of any taxes owed from any payments to you;
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restrict or refuse the transfer of your ADSs or restrict or
refuse the withdrawal of your underlying deposited securities
until you pay any taxes owed on the ADSs evidenced by your ADRs
or underlying ordinary shares or other deposited
securities; or
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sell ordinary shares or deposited securities to pay any taxes
owed, in which case you will remain liable if the proceeds of
the sale are not enough to pay the taxes.
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If The Bank of New York Mellon sells deposited securities, it
will, if appropriate, reduce the number of ADSs held by you to
reflect the sale and pay to you any proceeds, or send to you any
property, remaining after it has paid the taxes.
Reclassifications,
Recapitalizations and Mergers
If we:
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change the par value of any of our ordinary shares;
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reclassify, split or consolidate any of our ordinary shares;
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distribute securities on any of our ordinary shares that are not
distributed to you; or
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recapitalize, reorganize, merge, consolidate, sell our assets,
or take any similar action, then the cash, shares or other
securities received by The Bank of New York Mellon will become
new deposited securities under the Deposit Agreement, and each
ADS evidenced by your ADRs will automatically represent the
right to receive a proportional interest in the new deposited
securities. The Bank of New York Mellon may and will, if we ask
it to, distribute new ADRs or ask you to surrender your
outstanding ADRs in exchange for new ADRs identifying the new
deposited securities.
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Amendment
and Termination of the Deposit Agreement
How
may the Deposit Agreement be Amended?
We and The Bank of New York Mellon may agree to amend the
Deposit Agreement and the ADSs without your consent for any
reason. If the amendment adds or increases fees or charges,
except for the taxes and governmental charges, or prejudices an
important right of ADS holders, it will only become effective
thirty days after The Bank of New York Mellon notifies you of
the amendment. At the time an amendment becomes effective, you
are considered, by continuing to hold your ADSs, to agree to the
amendment and to be bound by the agreement as amended. However,
no amendment will impair your right to surrender your ADSs to
receive the ordinary shares and any other deposited securities
underlying the ADSs evidenced by your ADRs.
How
may the Deposit Agreement be Terminated?
The Bank of New York Mellon will terminate the Deposit Agreement
if we ask it to do so, in which case it must notify you at least
90 days before termination. The Bank of New York Mellon may
also terminate the agreement after notifying you if The Bank of
New York Mellon informs us that it would like to resign and we
do not appoint a new depositary bank within 90 days.
If any ADSs remain outstanding after termination, The Bank of
New York Mellon will stop registering the transfer of ADSs, will
stop distributing dividends to ADS holders, and will not give
any further notices or do anything else under the Deposit
Agreement other than:
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collect dividends and distributions on the ordinary shares and
any other deposited securities;
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sell rights and other property offered to holders of the
ordinary shares and any other deposited securities; and
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deliver ordinary shares and other deposited securities upon
surrender of ADSs.
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At any time after one year after termination of the Deposit
Agreement, The Bank of New York Mellon may sell any remaining
ordinary shares and any other deposited securities by public or
private sale. After that, The Bank of New York Mellon will hold
the money it received on the sale, as well as any cash it is
holding under the Deposit Agreement, for the pro rata benefit of
the ADS holders that have not surrendered their ADSs. It will
not invest the money and will have no liability for interest.
The Bank of New York Mellons only obligations will be to
account for the money it received on the sale and any other cash
it then holds under the Deposit Agreement. After termination,
our only obligations will be with respect to indemnification of,
and to pay agreed upon fees, expenses and out-of-pocket charges
to, The Bank of New York Mellon.
Your
Right to Receive Underlying Ordinary Shares and Other Deposited
Securities
You have the right to surrender your ADSs and the underlying
ordinary shares and any other deposited securities underlying
the ADSs evidenced by your ADRs at any time except:
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due to temporary delays caused by The Bank of New York Mellon
closing its or the closing of our transfer books, the transfer
of ordinary shares is blocked in connection with voting at a
shareholders meeting, or we are paying dividends;
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when you or other ADS holders seeking to withdraw ordinary
shares owe money to pay fees, taxes and similar charges; or
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when it is necessary to prohibit withdrawals in order to comply
with any laws or governmental regulations that apply to ADSs or
to the withdrawal of ordinary shares or other deposited
securities.
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This right of withdrawal may not be limited by any provision of
the Deposit Agreement.
Limitations
on Obligations and Liabilities to ADS Holders
The Deposit Agreement expressly limits our obligations and
liability and those of The Bank of New York Mellon. We and The
Bank of New York Mellon:
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are only obligated to take the actions specifically set forth in
the Deposit Agreement without negligence or bad faith;
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are not liable if prevented or delayed by law, any provisions of
our Articles of Association or by-laws or circumstances beyond
our control from performing our obligations under the Deposit
Agreement;
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are not liable for exercising, or failing to exercise,
discretion permitted under the Deposit Agreement;
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have no obligation to become involved in a lawsuit or proceeding
related to the ADSs or the Deposit Agreement on your behalf or
on behalf of any other party unless we are indemnified to our
satisfaction or The Bank of New York Mellon is indemnified to
its satisfaction; and
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may rely upon any advice of or information from any legal
counsel, accountants, any person depositing shares, any ADS
holder or any other person who we or The Bank of New York Mellon
believe in good faith is competent to give that advice or
information.
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In the Deposit Agreement, we and The Bank of New York Mellon
agree to indemnify each other under specified circumstances.
56
Requirements
for Depositary Actions
Before The Bank of New York Mellon will deliver or register the
transfer of an ADS, make a distribution on an ADS, or permit
withdrawal of ordinary shares or other deposited securities, The
Bank of New York Mellon may require:
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payment of taxes, including stock transfer taxes or other
governmental charges, and transfer or registration fees charged
by third parties for the transfer of any ordinary shares or
other deposited securities, as well as the fees and expenses of
The Bank of New York Mellon;
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production of satisfactory proof of the identity of the person
presenting shares for deposit or ADSs upon withdrawal, and of
the genuineness of any signature; and
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compliance with regulations The Bank of New York Mellon may
establish consistent with the Deposit Agreement, including
presentation of transfer documents.
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The Bank of New York Mellon may refuse to deliver, transfer, or
register transfer of ADSs generally when the transfer books of
The Bank of New York Mellon are closed or at any time if The
Bank of New York Mellon or we think it advisable to do so.
Pre-Release
of ADSs
In some circumstances, subject to the provisions of the Deposit
Agreement, The Bank of New York Mellon may deliver ADSs before
deposit of the underlying ordinary shares. This is called a
pre-release of ADSs. The Bank of New York Mellon may also
deliver ordinary shares prior to the receipt and cancellation of
re-released ADSs, even if those ADSs are canceled before the
pre-release transaction has been closed out. A pre-release is
closed out as soon as the underlying ordinary shares are
delivered to The Bank of New York Mellon. The Bank of New York
Mellon may receive ADSs instead of the ordinary shares to close
out a pre-release. The Bank of New York Mellon may pre-release
ADSs only under the following conditions:
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before or at the time of the pre-release, the person to whom the
pre-release is being made must represent to The Bank of New York
Mellon in writing that it or its customer, as the case may be,
owns the ordinary shares or ADSs to be deposited;
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the pre-release must be fully collateralized with cash or
collateral that The Bank of New York Mellon considers
appropriate; and
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The Bank of New York Mellon must be able to close out the
pre-release on not more than five business days notice.
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The pre-release will be subject to whatever indemnities and
credit regulations that The Bank of New York Mellon considers
appropriate. In addition, The Bank of New York Mellon will limit
the number of ADSs that may be outstanding at any time as a
result of pre-release, although The Bank of New York Mellon may
disregard the limit from time to time, if it thinks it is
appropriate to do so.
57
EXCHANGE
CONTROLS AND OTHER LIMITATIONS
AFFECTING SECURITY HOLDERS
There are currently no Jersey or United Kingdom foreign exchange
control restrictions on the payment of dividends on our ordinary
shares or on the conduct of our operations. Jersey is in a
monetary union with the United Kingdom. There are currently no
limitations under Jersey law or our Articles of Association
prohibiting persons who are not residents or nationals of the
United Kingdom from freely holding, voting or transferring our
ordinary shares in the same manner as United Kingdom residents
or nationals.
58
TAXATION
Material
Jersey Tax Consequences
General
The following summary of the anticipated tax treatment in Jersey
in relation to the payments on the ordinary shares and ADSs is
based on the taxation law and practice in force at the date of
prospectus, and does not constitute legal or tax advice and
prospective investors should be aware that the relevant fiscal
rules and practice and their interpretation may change. We
encourage you to consult your own professional advisers on the
implications of subscribing or buying, holding, selling,
redeeming or disposing of ordinary shares or ADSs and the
receipt of interest and distributions, whether or not on a
winding-up,
with respect to the ordinary shares or ADSs under the laws of
the jurisdictions in which they may be taxed.
Following amendments to the Income Tax (Jersey) Law 1961 (the
Income Tax Law), our tax position (along with all
other companies incorporated in Jersey) has changed. Up until
December 31, 2008, we were an exempt company
within the meaning of Article 123A of the Income Tax Law.
As an exempt company we were not liable for Jersey
income tax other than on Jersey source income, except by
concession bank deposit interest on Jersey bank accounts. For as
long as we were an exempt company, payments in
respect of the ordinary shares and ADSs were not subject to any
taxation unless a shareholder was resident in Jersey, and no
withholding in respect of taxation were required on those
payments to any holder of the ordinary shares or ADSs.
We are now regarded by the Comptroller as a zero
rated company within the meaning of Article 123C of
the Income Tax Law with effect from January 1, 2009.
The Income Tax Law now provides that the standard rate of income
tax on profits of a non-financial service company regarded as
resident in Jersey or having a permanent establishment in Jersey
will be zero percent. The Income Tax Law also provides that the
new tax regime will apply for the year of assessment 2008 in
relation to non-financial service companies which are first
regarded as resident in Jersey or which have a permanent
establishment in Jersey on or after June 3, 2008.
As a zero rated non-financial service company we
will not be liable for Jersey income tax other than on Jersey
source income, except by concession bank deposit interest on
Jersey bank accounts. For so long as we are a zero
rated company, payments in respect of the ordinary shares
and ADSs will not be subject to any taxation in Jersey and no
withholding in respect of taxation will be required on those
payments to any holder of the ordinary shares or ADSs.
Currently, there is no double tax treaty or similar convention
between the US and Jersey.
Taxation
of Dividends
Dividends are declared and paid gross in US dollars. Under the
existing Jersey law, payments in respect of the ordinary shares
and ADSs, whether by dividend or other distribution paid to
shareholders (other than to residents in Jersey), will not be
subject to any taxation in Jersey and no withholding in respect
of taxation will be required on those payments to any holder of
our ordinary shares or ADSs.
Taxation
of Capital Gains and Estate and Gift Tax
Under current Jersey law, there are no death or estate duties,
capital gains, gift, wealth, inheritance or capital transfer
taxes. No stamp duty is levied in Jersey on the issue or
transfer of ordinary shares or ADSs. In the event of the death
of an individual sole shareholder, duty at rates of up to 0.75%
of the value of the ordinary shares or ADSs held may be payable
on the registration of Jersey probate or letters of
administration which may be required in order to transfer or
otherwise deal with ordinary shares or ADSs held by the deceased
individual sole shareholder.
Material
United States Federal Income Tax Consequences
The following summary describes the material US Federal income
tax consequences to US holders (as defined below) arising from
the purchase, ownership and disposition of our ordinary shares
or ADSs. This summary applies
59
only to US holders that purchase ADSs in cash pursuant to the
offering. This summary is based on the provisions of the
Internal Revenue Code of 1986, as amended, which we refer to as
the Code, final, temporary and proposed US Treasury Regulations
promulgated under the Code, and administrative and judicial
interpretations of the Code and the US Treasury Regulations, all
as in effect as of the date of this summary, and all of which
are subject to change, possibly with retroactive effect, that
could affect the consequences described below. In addition, this
discussion assumes that the representations contained in the
deposit agreement are true and that the obligations in the
deposit agreement and any related agreement have been and will
be complied with in accordance with their terms.
This summary has no binding effect or official status of any
kind; we cannot assure holders that the conclusions reached
below would be sustained by a court if challenged by the
Internal Revenue Service.
For purposes of this discussion, a US holder is a
holder of our ordinary shares or ADSs that is a beneficial owner
of such shares or ADSs and is:
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a US citizen;
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an individual resident in the United States for US Federal
income tax purposes;
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a domestic corporation, or other entity taxable as a
corporation, organized under the laws of the United States or of
any US state or the District of Columbia;
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an estate the income of which is includible in its gross income
for US Federal income tax purposes without regard to its
source; or
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a trust, if either: a US court is able to exercise primary
supervision over the administration of the trust and one or more
US persons have the authority to control all the substantial
decisions of the trust, or the trust has a valid election in
effect under applicable US Treasury regulations to be treated as
a US person.
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This summary does not address all aspects of US Federal income
taxation that may be relevant to particular US holders in light
of their particular circumstances, or to US holders subject to
special rules, including, without limitation:
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retirement plans;
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insurance companies;
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persons that hold ordinary shares or ADSs as part of a
straddle, synthetic security,
hedge, conversion transaction or other
integrated investment;
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persons that enter into constructive sales involving
our ordinary shares or ADSs or substantially identical property
with other transactions;
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persons whose functional currency is not the US Dollar;
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expatriates or former long-term residents of the United States;
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financial institutions;
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dealers in securities or currencies;
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tax-exempt organizations;
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persons that own, actually or constructively, 10% or more of our
outstanding voting stock;
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persons subject to the alternative minimum tax;
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regulated investment companies;
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real estate investment trusts;
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persons who trade in securities who elect to apply a
mark-to-market method of accounting; and
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persons who acquired their shares or ADSs pursuant to the
exercise of employee stock options or otherwise as compensation.
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In addition, this summary does not address the effect of any
applicable US state, local or non-US tax laws or any federal,
estate or gift tax consequences, does not consider the tax
treatment of persons who own our ordinary shares or ADSs through
a partnership or other pass-through entity, and deals only with
ordinary shares or ADSs held by US holders as capital
assets as defined in Section 1221 of the Code. If a
partnership (including for this purpose, any entity treated as a
partnership for US Federal income tax purposes) holds shares or
ADSs, the tax treatment of a partner generally will depend upon
the status of the partner and the activities of the partnership.
If a US holder is a partner in a partnership that holds shares
or ADSs, the holder is urged to consult its own tax advisor
regarding the specific tax consequences of the ownership and
disposition of the shares or ADSs.
We encourage US holders of our ordinary shares or ADSs to
consult with their own tax advisors with respect to the US
Federal, state and local tax consequences, as well as the tax
consequences in other jurisdictions, of the purchase, ownership
and disposition of our ordinary shares or ADSs applicable in
their particular tax situations.
Ownership
of Ordinary Shares or ADSs
For purposes of the Code, US holders of ADSs should be treated
for US Federal income tax purposes as the owner of the ordinary
shares represented by those ADSs. The US Treasury has, however,
expressed concerns that intermediaries in the chain of ownership
between the US holder of an ADS and the issuer of the security
underlying the ADS may, in some circumstances, be taking actions
that are inconsistent with the beneficial ownership of the
underlying security (for example, pre-releasing ADSs to persons
that do not have the beneficial ownership of the securities
underlying the ADSs). Accordingly, the availability of the
reduced tax rate (as discussed below) for dividends received by
certain non-corporate US holders, including US holders who are
individuals, could be affected by future actions that may be
taken by the US Treasury
and/or
intermediaries in the chain of ownership between the US holders
of ADSs and us.
Subject to the discussion below under the heading Passive
Foreign Investment Company Rules, for US Federal income
tax purposes, distributions with respect to our ordinary shares
or ADSs, other than distributions in liquidation and
distributions in redemption of stock that are treated as
exchanges, will be taxed to US holders as ordinary dividend
income to the extent that the distributions do not exceed our
current and accumulated earnings and profits as determined for
federal income tax purposes. Distributions, if any, in excess of
our current and accumulated earnings and profits will constitute
a non-taxable return of capital and will be applied against and
reduce the holders basis in our ordinary shares or ADSs.
To the extent that these distributions exceed the US
holders tax basis in our ordinary shares or ADSs, as
applicable, the excess generally will be treated as capital
gain. We do not, however, intend to calculate our earnings and
profits under US federal income tax principles. Therefore, you
should expect that any distribution from us generally will be
treated for US federal income tax purposes as a dividend. Such
dividends will not be eligible for the dividends received
deduction generally allowed to a US corporation under
Section 243 of the Code.
Individual US holders are eligible for reduced rates of US
Federal income tax (currently a maximum of 15%) in respect of
qualified dividend income received in taxable years
beginning before January 1, 2011. For this purpose,
qualified dividend income generally includes dividends paid by
non-US corporations if, among other things, certain minimum
holding periods are met and either (i) the ordinary shares
(or ADSs) with respect to which the dividend has been paid are
readily tradable on an established securities market in the
United States, or (ii) the non-US corporation is
eligible for the benefits of a comprehensive US income tax
treaty which provides for the exchange of information. For this
purpose, ADSs listed on the Nasdaq exchange are considered to be
readily tradable on an established securities market in the
United States. Therefore, we currently believe that dividends
paid with respect to our ordinary shares and ADSs will
constitute qualified dividend income for US federal income tax
purposes, provided the individual US holders of our shares and
ADSs meet certain holding period requirements. However, if we
are a passive foreign investment company, as discussed below
under the heading Passive Foreign Investment Company
Rules, in the taxable year of the distribution or the
preceding tax year, the dividends paid with respect to our ADSs
will not constitute qualified dividend income. US holders are
urged to consult their own tax advisors regarding the
classification of any distributions from us as qualified
dividend income.
Dividends from us generally will constitute non-US-source income
for foreign tax credit limitation purposes. The limitation on
foreign taxes eligible for credit is calculated separately with
respect to specific classes of income.
61
For this purpose, dividends distributed by us generally will be
treated as passive category income or, in the case
of certain US holders, as general category income.
Sale
or Other Disposition of Ordinary Shares or ADSs
Subject to the discussion below under Passive Foreign
Investment Company Rules, if a US holder sells or
otherwise disposes of its ordinary shares or ADSs in a taxable
transaction, it will generally recognize gain or loss for US
Federal income tax purposes in an amount equal to the difference
between the amount realized on the sale or other taxable
disposition and its tax basis in the ordinary shares or ADSs.
Such gain or loss generally will be capital gain or loss and
will be long-term capital gain or loss if the US holder has held
the ordinary shares or ADSs for more than one year at the time
of the sale or other taxable disposition. In general, any gain
that US holders recognize on the sale or other taxable
disposition of ordinary shares or ADSs will be US source income
for purposes of the foreign tax credit limitation and any losses
recognized will generally be allocated against US source income.
Deduction of capital losses is subject to limitations under the
Code.
Passive
Foreign Investment Company Rules
A special and adverse set of US Federal income tax rules apply
to a US holder that holds stock in a passive foreign investment
company, or PFIC. In general, we will be a PFIC if 75% or more
of our gross income in a taxable year is passive income.
Alternatively, we will be considered to be a PFIC if at least
50% of our assets in a taxable year, averaged over the year and
determined based on fair market value, are held for the
production of, or produce, passive income.
In determining whether a non-US corporation is a PFIC, a
proportionate share of the income and assets of each corporation
in which it owns, directly or indirectly, at least a 25%
interest (by value) is taken into account.
We believe that we currently are not a PFIC and do not expect to
become a PFIC in 2009. However, there is significant uncertainty
in the application of the PFIC rules to mining enterprises such
as ourselves as a result of the interplay of several sets of tax
rules. In addition, because the tests for determining PFIC
status are applied as of the end of each taxable year and are
dependent upon a number of factors, some of which are beyond our
control, including the value of our assets, the market price of
our ordinary shares, and the amount and type of our gross
income, we cannot assure you that we will not become a PFIC in
the future or that the US Internal Revenue Service will agree
with our conclusion that we are not a PFIC now.
If we are a PFIC for US Federal income tax purposes for any year
during a US holders holding period of our ADSs or ordinary
shares and the US holder does not make a QEF Election or a
mark-to-market election, both as described below:
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any gain recognized by a US holder upon the sale of ADSs or
ordinary shares, or the receipt of some types of distributions,
would be treated as ordinary income;
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this income generally would be allocated ratably over a US
holders holding period with respect to our ADSs or
ordinary shares; and
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the amount allocated to prior years, with certain exceptions,
will be subject to tax at the highest tax rate in effect for
those years and an interest charge would be imposed on the
amount of deferred tax on the income allocated to the prior
taxable years.
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We generally will be treated as a PFIC as to any US holder if we
are a PFIC for any year during such holders holding
period. However, if we cease to satisfy the requirements for
PFIC classification, a US holder may avoid PFIC classification
for subsequent years if such holder elects to recognize gain
based on the unrealized appreciation in the ADSs or ordinary
shares through the close of the tax year in which we cease to be
a PFIC. Additionally, if we are a PFIC, a US holder who acquires
ADSs or ordinary shares from a decedent would be denied the
normally available
step-up in
tax basis for our ADSs or ordinary shares to fair market value
at the date of death and instead would have a tax basis equal to
the lower of the fair market value or the decedents tax
basis.
A US holder who beneficially owns stock in a PFIC must file
Form 8621 (Return by a Shareholder of a Passive Foreign
Investment Company or Qualified Electing Fund) with the Internal
Revenue Service for each tax year such
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US holder holds stock in a PFIC. This form describes any
distributions received with respect to such stock and any gain
realized upon the disposition of such stock.
A US holder generally may be able to avoid the imposition of the
special tax and interest charge described above by electing to
mark its ADSs or ordinary shares to market annually, and,
therefore, recognize for each taxable year, subject to certain
limitations, ordinary income or loss equal to the difference, as
of the close of taxable year, between the fair market value of
its ADSs or ordinary shares and the adjusted tax basis of his or
its ADSs or ordinary shares. Losses would be allowed only to the
extent of the net mark-to-market gain previously included by the
US holder under the election in prior taxable years. If a
mark-to-market election with respect to ADSs or ordinary shares
is in effect on the date of a US holders death, the tax
basis of the ADSs or ordinary shares in the hands of a US holder
who acquired them from a decedent will be the lesser of the
decedents tax basis or the fair market value of the ADSs
or ordinary shares. A mark-to-market election is available only
if the ADSs or ordinary shares, as the case may be, are
considered marketable stock. Generally, stock will
be considered marketable stock if it is regularly
traded on a qualified exchange within the
meaning of applicable US Treasury regulations. A class of stock
is regularly traded during any calendar year during which such
class of stock is traded, other than in de minimis quantities,
on at least 15 days during each calendar quarter. The
Nasdaq constitutes a qualified exchange, and a non-US securities
exchange constitutes a qualified exchange if it is regulated or
supervised by a governmental authority of the country in which
the securities exchange is located and meets certain trading,
listing, financial disclosure and other requirements set forth
in US Treasury regulations.
In certain circumstances a holder of stock or ADSs in a PFIC may
avoid taxation under the rules described above by making a
qualified electing fund, or QEF,
election to include in income its share of a PFICs annual
income on a current basis. However, a QEF election is only
available if the PFIC annually provides its stockholders with
certain tax information, and we currently do not intend to
prepare or provide such information. Accordingly, you should
assume that a QEF election is unavailable.
Rules relating to a PFIC are very complex. US holders are
encouraged to consult their own tax advisors regarding the
application of the PFIC rules to their investments in our ADSs
or our ordinary shares.
Backup
Withholding and Information Reporting
Payments to US holders in respect of our ordinary shares or ADSs
may be subject to information reporting to the US Internal
Revenue Service and to backup withholding tax, currently imposed
at a rate of 28%.
However, backup withholding and information reporting will not
apply to a US holder that is a corporation or comes within an
exempt category, and demonstrates the fact when so required, or
furnishes a correct taxpayer identification number and makes any
other required certification. US holders who are required to
establish their exempt status generally must provide such
certification on Internal Revenue Service
Form W-9.
Backup withholding is not an additional tax. Amounts withheld
under the backup withholding rules will be allowed as a refund
or credit against a US holders US Federal income tax
liability, provided that the required procedures are followed.
United
Kingdom Tax Considerations
The following statements do not constitute tax advice and are
intended as a general guide only to the U.K. tax position under
current U.K. tax legislation and published HM
Revenue & Customs (HMRC) practice as at
the date of this document, both of which is subject to change at
any time, possibly with retrospective effect. These statements
deal only with the position of shareholders who are resident
(and, in the case of individuals only, ordinarily resident and
domiciled) solely in the U.K. for tax purposes (except where the
position of a non-U.K. tax resident shareholder is expressly
referred to), who hold their ordinary shares or ADSs as an
investment and who are the absolute beneficial owners of the
ordinary shares or ADSs and of all dividends of any kind paid in
respect of them in circumstances where the dividends paid are
regarded for U.K. tax purposes as that persons own income
(and not the income of some other person). The tax position of
certain categories of shareholders who are subject to special
rules (such as persons acquiring their shares or ADSs (or deemed
to acquire their shares or ADSs) in connection with an
employment or office, dealers in securities, insurance companies
and collective investment
63
schemes and shareholders owning 10% or more of the ordinary
shares or voting power, rights to profit or capital of the
company) is not considered. Any shareholder who is in doubt as
to their tax position regarding the acquisition, ownership or
disposal of their ordinary shares or ADSs, or who are subject to
tax in a jurisdiction other than the U.K., should consult their
own independent tax adviser.
Dividends
A person having an interest in ADSs or ordinary shares who is
not a resident in the U.K. will not be subject to tax in the
U.K. on dividends paid on ordinary shares, unless that person
carries on a trade, profession or vocation in the U.K. (and, if
that person is a company, does so through a permanent
establishment) to which the ordinary shares or ADSs in question
are attributable.
A person having an interest in ADSs or ordinary shares who is
resident in the U.K. and is not a body corporate will, in
general, be subject to U.K. income tax on dividends paid by us.
A U.K. resident body corporate holding an interest in ADSs or
ordinary shares should not generally be taxable on dividends
paid by us.
A U.K. resident individual shareholder will be entitled to a tax
credit, which may be set off against the shareholders
total income tax liability on the dividend. The value of the tax
credit is currently 10% of the aggregate of the dividend and the
tax credit (the Gross Dividend), which is also equal
to one-ninth of the cash dividend received.
Such an individual U.K. resident shareholder who is liable to
income tax at the basic rate will be subject to tax on the
dividend at the rate of 10% of the Gross Dividend, so that any
tax credit will satisfy in full such shareholders
liability to income tax on the dividend.
An individual shareholder who is liable to income tax at the
higher rate will be taxed at the rate of 32.5% on the Gross
Dividend. Any tax credit will be set against, but not fully
match, the shareholders tax liability on the Gross
Dividend and such shareholder will have to account for
additional income tax equal to 22.5% of the Gross Dividend
(which is equal to 25% of the cash dividend received) to the
extent that the Gross Dividend, when treated as the top slice of
the shareholders income, falls above the threshold for
higher rate income tax.
The U.K. government has announced proposals to introduce, with
effect from April 6, 2010, a new tax rate of 50% for
taxable income above £150,000. However, dividends which
would otherwise be taxable at the new 50% rate would be liable
to income tax at a new rate of 42.5% of the Gross Dividend. Any
tax credit will be set against, but not fully match, the
shareholders tax liability on the Gross Dividend and such
shareholder will have to account for additional income tax equal
to 32.5% of the Gross Dividend (this equates to 36.1% of the
cash dividend received) to the extent that the Gross Dividend,
when treated as the top slice of the shareholders income,
falls above the threshold for the 50% rate of tax.
An individual shareholder will not generally be able to claim
repayment from HMRC of any part of the tax credit attaching to
dividends paid by us.
Each shareholder resident outside the U.K. may also be subject
to foreign taxation on dividend income under local law.
We are zero rated for the purposes of
Article 123A of the Income Tax (Jersey) Law 1961 and
therefore we are taxed in Jersey at the rate of 0% of our
worldwide income. Accordingly, we are not required to make any
deduction or withholding with respect of Jersey taxation on any
dividend we may pay. In addition, we are not required to make
any deduction from payments of dividends for or on account of
U.K. tax.
Capital
Gains
A person having an interest in ADSs or ordinary shares who is
neither resident nor, in the case of an individual shareholder,
ordinarily resident in the U.K. will generally not be subject to
tax in the U.K. on gains arising on a disposal of our ordinary
shares or interests in the ADSs.
However, individuals who left the U.K. on or after
March 17, 1998, who were resident in the U.K. for four out
of seven tax years prior to departure, and who return to the
U.K. before five complete tax years following departure
64
will be subject to U.K. capital gains tax on any gains realized
on the disposal during the period of absence of any assets which
were owned before taking up residence abroad.
Persons having an interest in ADSs or ordinary shares who are
resident and/or, in the case of an individual shareholder,
ordinarily resident in the U.K. or who hold their ordinary
shares or interests in ADSs through a U.K. trading branch or
agency (or, if that person is a company, a permanent
establishment) will, in general, be subject to U.K. taxation on
gains arising on a disposal of ordinary shares or interests in
ADSs. An individual shareholder will currently be subject to
capital gains tax on any gains arising at a rate of 18% (subject
to any available reliefs and exemptions). A body corporate will
generally be subject to U.K. corporation tax on chargeable gains
at the standard rate of U.K. corporation tax (which is currently
28%).
Inheritance
Tax
Liability to U.K. inheritance tax may arise on the death of an
individual having an interest in ADSs or ordinary shares, or on
a gift (or disposal at an undervalue) of ordinary shares or ADSs
by an individual, who is domiciled, or deemed to be domiciled,
in the U.K.
Where ordinary shares or interests in ADSs are held by an
individual who is neither domiciled nor deemed to be domiciled
in the U.K., no liability to U.K. inheritance tax will arise in
respect of them.
Stamp
Duty and Stamp Duty Reserve Tax
No U.K. stamp duty or stamp duty reserve tax should be payable
on the issue of the ordinary shares or ADSs, or on the delivery
of the ADSs into DTC.
No U.K. stamp duty should in practice be payable on the transfer
of ordinary shares or ADSs provided any instrument of transfer
is executed and retained outside of the U.K. and no U.K. stamp
duty will arise in respect of any dealings in the ordinary
shares or ADSs within a clearance service, where such dealings
are effected in book entry form in accordance with the
procedures of the clearance service and not by written
instrument.
Stamp duty reserve tax will not be payable on an agreement to
transfer ADSs or ordinary shares, provided there is no register
in the United Kingdom in respect of the ordinary shares or ADSs.
65
PLAN OF
DISTRIBUTION
Under the terms and subject to the conditions contained in the
underwriting agreement dated July 29, 2009, the
underwriters named below, for whom HSBC Bank plc and Merrill
Lynch International are acting as representatives, have
severally agreed to purchase, and we have agreed to sell to them
the number of ordinary shares, including ordinary shares in the
form of ADSs, indicated below.
|
|
|
|
|
|
|
Number of
|
Underwriters
|
|
Ordinary Shares
|
|
HSBC Bank plc
|
|
|
2,500,000
|
|
Merrill Lynch International
|
|
|
1,500,000
|
|
Arbuthnot Securities Limited
|
|
|
600,000
|
|
National Bank Financial Inc.
|
|
|
250,000
|
|
Barnard Jacobs Mellet (UK) Limited
|
|
|
150,000
|
|
|
|
|
|
|
Total
|
|
|
5,000,000
|
|
|
|
|
|
|
The underwriters may elect to take delivery of all or a portion
of the ordinary shares purchased in the form of ADSs. References
in this section to ordinary shares include ADSs, to
the extent applicable.
The global offering is being coordinated by HSBC Bank plc as the
global coordinator.
In the underwriting agreement, the several underwriters have
agreed, subject to the terms and conditions set forth therein,
to purchase all of the ordinary shares being sold pursuant to
that agreement if any of the ordinary shares being sold pursuant
to such agreement are purchased. In some circumstances, under
the underwriting agreement, the commitments of non-defaulting
underwriters may be increased. The underwriters propose
initially to offer the ordinary shares and the ADSs in part
directly to the public in the United States at the initial
offering prices set forth on the cover page of this document,
and in part to selected dealers, including the underwriters, at
such price less a concession not in excess of $1.07 per ordinary
share or $1.07 per ADS.
We granted to the representatives an option to purchase, from
time to time, in whole or in part, up to an additional 750,000
ordinary shares, at the initial public offering price less
underwriting discounts and commissions. This option is
exercisable within 30 days from the closing date of the
global offering to cover over-allotments in the global offering,
if any. To the extent that the representative exercises the
over-allotment option, each of the underwriters will be
obligated, subject to specified conditions, to purchase its pro
rata portion of any additional ordinary shares based on each
underwriters percentage underwriting commitment in the
global offering as reflected in the preceding table.
The following table summarizes the compensation and estimated
expenses that we will pay:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share($)
|
|
Per ADS($)
|
|
|
With Over-
|
|
Without Over-
|
|
With Over-
|
|
Without Over-
|
|
|
Allotment
|
|
Allotment
|
|
Allotment
|
|
Allotment
|
|
Underwriting discounts and commissions paid by us
|
|
|
1.93375
|
|
|
|
1.93375
|
|
|
|
1.93375
|
|
|
|
1.93375
|
|
Expenses payable by us
|
|
|
0.15652
|
|
|
|
0.18000
|
|
|
|
0.15652
|
|
|
|
0.18000
|
|
The ordinary shares and ADSs are being offered in the global
offering by the several underwriters, subject to prior sales,
when, as and if transferred to and accepted by them, subject to
the approval of various legal matters by counsel for the
underwriters and other conditions.
It is intended that, where possible, allocations of ordinary
shares and ADSs being offered in the global offering will be
made:
|
|
|
|
|
first, to existing shareholders who may lawfully participate in
the global offering and have expressed an interest in doing so
(Qualifying Existing Shareholders), pro rata to
their existing shareholdings in Randgold; and
|
66
|
|
|
|
|
second, either to Qualifying Existing Shareholders in respect of
any ordinary shares or ADSs that they have indicated that they
wish to take up in excess of such pro rata share entitlement or,
in the absolute discretion of Randgold and the representatives,
to persons other than Qualifying Existing Shareholders who may
lawfully be, and are, invited to participate in the global
offering.
|
While reasonable inquiries have been made to establish the pro
rata entitlements of Qualifying Existing Shareholders for these
purposes, neither Randgold nor either representative is
obligated to offer ordinary shares or ADSs to, or accept offers
from, any person, and Randgold and the representatives reserve
the right to determine allocations of ordinary shares and ADSs
at their sole discretion.
We have agreed with the underwriters, subject to specified
exceptions, that for a period of 90 days after the date of
this prospectus, we will not, without the prior written consent
of HSBC Bank plc, issue or sell any of our ADSs or ordinary
shares or share capital or any securities substantially similar
to our ADSs or ordinary shares or share capital. Our executive
directors have also agreed with the underwriters that, for a
period of 90 days after the date of this prospectus, they
will not, other than in specified circumstances, dispose of any
ADSs or ordinary shares that they own without the prior written
consent of HSBC Bank plc. Notwithstanding the foregoing, if
during the last 17 days of the
90-day
restricted period, we issue an earnings release or material news
or a material event occurs, or prior to the expiration of the
restricted period, we announce that we will release earnings
results during the
16-day
period from the last day of the restricted period, the
lock-up
restrictions will continue until the expiration of the
18-day
period beginning on the issuance of such earnings release or
material news or the occurrence of a material event.
We have agreed to indemnify the underwriters and others against
specified liabilities, including liabilities under the
Securities Act and other applicable securities laws, and to
contribute to payments the underwriters may be required to make
in respect of those liabilities, losses and expenses.
HSBC Bank plc or its affiliates acting on its behalf (including
HSBC Securities (USA) Inc.) (the Stabilizing
Person), each acting on behalf of the underwriters, may
make short sales of the ordinary shares and the ADSs in
connection with the global offering, resulting in the sale of a
greater number of ordinary shares and ADSs than is required to
be purchased by the underwriters pursuant to the underwriting
agreement. The short position resulting from those short sales
will be deemed a covered short position to the
extent that it does not exceed the ordinary shares and the ADSs
subject to the over-allotment option and will be deemed a
naked short position to the extent that it exceeds
that number. A naked short position is more likely to be created
if the Stabilizing Person is concerned that there may be
downward pressure on the trading price of the ordinary shares or
the ADSs in the open market that could adversely affect
investors who purchase ordinary shares or ADSs in the global
offering. The Stabilizing Person may reduce or close out its
covered short position either by exercising the over-allotment
option or by purchasing ordinary shares or ADSs in the open
market. In determining which of these alternatives to pursue,
the Stabilizing Person will consider the prices at which
ordinary shares or ADSs are available for purchase in the open
market as compared to the price at which it may purchase through
the over-allotment option. Any naked short position will be
closed out by purchasing ordinary shares or ADSs in the open
market. Similar to other stabilizing transactions described
below, open market purchases made by the Stabilizing Person to
cover all or a portion of its short position may have the effect
of preventing or retarding a decline in the market price of the
ordinary shares or the ADSs following the global offering. As a
result, the ordinary shares or the ADSs may trade at a price
that is higher than the price that otherwise might prevail in
the open market.
A Stabilizing Person pursuant to Regulation M under the
Securities Exchange Act may engage in transactions including
stabilizing bids that may have the effect of stabilizing or
maintaining the market price of the ordinary shares or the ADSs
at a level above that which might otherwise prevail in the open
market. A stabilizing bid is a bid for or the
purchase of ordinary shares or ADSs on behalf of the
underwriters for the purpose of fixing or maintaining the price
of the ordinary shares or the ADSs. These stabilizing bids and
open market purchases may be effected on the Nasdaq Global
Select Market, in the over-the-counter market or otherwise and,
if commenced, may be discontinued at any time.
The underwriters or their affiliates may engage in passive
market making transactions in the ordinary shares or ADSs on the
London Stock Exchange or in the ADSs on the Nasdaq Global Select
Market. The underwriters are not required to engage in passive
market making and may end passive market making activities at
any time.
67
From time to time in the ordinary course of their respective
businesses, one or more of the underwriters and their affiliates
may in the future engage in commercial or investment banking
transactions with us and our affiliates. In addition, the
underwriters and their affiliates have in the past received and
are currently receiving compensation from us in connection with
providing various services. HSBC Bank plc and its affiliates
have received and are receiving customary compensation in
connection with, among other things, its acting as financial
adviser to us from time to time.
The address of the principal business office of HSBC Bank plc is
8 Canada Square, Canary Wharf, London, E14 5HQ, United Kingdom.
Selling
Restrictions
General
No public offer is being made and no one has taken any action
that would, or is intended to, permit a public offering of the
ordinary shares or ADSs to be made in any country or
jurisdiction, other than the United States, where action for
that purpose is required. No person receiving a copy of his
document in any territory may treat the same as constituting an
invitation or offer to him or her to purchase ordinary shares or
ADSs unless, in the relevant territory, such an invitation or
offer could lawfully be made without contravention by any person
of any registration or other regulatory or legal requirements.
We encourage any person who receives a copy of this document to
satisfy himself or herself as to full observance of the laws of
any relevant territory in respect of any actions he or she may
take, including the obtaining of any requisite governmental or
other consent or the observance of any requisite formalities and
the payment of any issue, transfer or other taxes due in such
territory.
European
Economic Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a Relevant
Member State), an offer of the ordinary shares or ADSs to the
public in that Relevant Member State will not be made prior to
the publication of a prospectus in relation to the ordinary
shares and ADSs which has been approved by the competent
authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the
competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that, with
effect from and including the Relevant Implementation Date, an
offer of ordinary shares or ADSs may be made in that Relevant
Member State at any time:
(a) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
Euro 43,000,000 and (3) an annual net turnover of more
than Euro 50,000,000, as shown in its last annual or
consolidated accounts;
(c) by the Managers to fewer than 100 natural or legal
persons (other than Qualified Investors as defined in the
Prospectus Directive) subject to obtaining the prior consent of
the Lead Managers for any such offer; or
(d) in any other circumstances falling within Article 3(2)
of the Prospectus Directive which do not require the publication
by the Issuer of a prospectus pursuant to Article 3 of the
Prospectus Directive.
For the purposes of this provision, the expression an
offer of ordinary shares or ADSs to the public in
relation to any ordinary shares or ADSs in any Relevant Member
State means the communication in any form and by any means of
sufficient information on the terms of the offer and the
ordinary shares or ADSs to be offered so as to enable an
investor to decide to purchase or subscribe the ordinary shares
or ADSs, as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member
State and the expression Prospectus Directive means Directive
2003/71/EC and includes any relevant implementing measure in
each Relevant Member State.
The EEA selling restriction is in addition to any other selling
restrictions set out in this prospectus.
68
To the extent that the offer of the ordinary shares
and/or ADSs
is made in any EEA Member State that has implemented Directive
2003/71/EC (together with any applicable implementing measures
in any Member State, the Prospectus Directive)
before the date of publication of a prospectus in relation to
the ordinary shares and ADSs which has been approved by the
competent authority in that Member State in accordance with the
Prospectus Directive (or, where appropriate, published in
accordance with the Prospectus Directive and notified to the
competent authority in that Member State in accordance with the
Prospectus Directive), the offer (including any offer pursuant
to this document) is only addressed to qualified investors in
that Member State within the meaning of the Prospectus Directive
or has been or will be made otherwise in circumstances that do
not require the Company to publish a prospectus pursuant to the
Prospectus Directive.
United
Kingdom
Offers of ordinary shares or ADSs pursuant to the offering are
only being made to persons in the UK who are qualified
investors (as defined in the Prospectus Rules) or
otherwise in circumstances which do not require publication by
Randgold of a prospectus pursuant to section 85(1) of the
FSMA.
This prospectus is only being distributed to and is only
directed at (i) persons who are outside the United Kingdom
or (ii) to investment professionals falling within
Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 as amended (the
Order) or (iii) persons, falling within
Article 49(2)(a) to (d) (High net worth companies,
unincorporated associations etc.) of the Order or (iv)
other persons to whom it may lawfully be communicated (all such
persons together being referred to as relevant
persons). The ordinary shares and ADSs are only available
to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such ordinary shares and ADSs will
be engaged in only with, relevant persons. Any person who is not
a relevant person should not take any action on the basis of
this document and should not act or rely on this document or any
of its contents.
France
No prospectus has been prepared in connection with the offering
of the ordinary shares or the ADSs that has been approved by the
Autorité des marchés financiers or by the
competent authority of another State that is a contracting party
to the Agreement on the European Economic Area and notified to
the Autorité des marchés financiers; no
ordinary shares or ADSs have been offered or sold nor will be
offered or sold, directly or indirectly, to the public in
France; the prospectus or any other offering material relating
to the ordinary shares and ADSs have not been distributed or
caused to be distributed and will not be distributed or caused
to be distributed to the public in France; such offers, sales
and distributions have been and shall only be made in France to
persons licensed to provide the investment service of portfolio
management for the account of third parties, qualified investors
(investisseurs qualifiés) investing for their own
account
and/or a
restricted circle of investors (cercle restreint
dinvestisseurs) investing for their own account, all
as defined in
Articles L.411-2
and D.411-1 to D.411-4 of the Code monétaire et
financier. The direct or indirect distribution to the public
in France of any so acquired Shares or ADSs may be made only as
provided by
Articles L.411-1
to L.411-4, L.412-1 and L.621-8 to L.621-8-3 of the Code
monétaire et financier and applicable regulations
thereunder.
Canada
Each dealer will be required to severally agree, among other
things, that the sale and delivery of any ordinary shares in the
form of ordinary shares or ADSs to any purchaser in Canada or
who is a resident thereof by such dealer shall be made so as to
be exempt from the prospectus filing and registration
requirements of all applicable securities laws, regulations,
rules, instruments, rulings and orders, including those
applicable in each of the provinces and territories of Canada
and the applicable policy statements issued by any securities
regulatory having jurisdiction.
We are not, and may never be, a reporting issuer, as
such term is defined under applicable Canadian securities
legislation, in any province or territory of Canada and there
currently is no public market for any of the securities we
intend to issue in Canada, including the ordinary shares in the
form of ordinary shares or ADSs, and one may never develop.
69
The distribution of the ordinary shares in the form of ordinary
shares or ADSs in the Provinces of British Columbia, Alberta,
Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova
Scotia, Prince Edward Island, Newfoundland and Labrador (the
Private Placement Provinces) is being made on a
private placement basis only and is therefore exempt from the
requirement that we prepare and file a prospectus with the
relevant Canadian regulatory authorities. Accordingly, any
resale of the ordinary shares in the form of ordinary shares or
ADSs must be made in accordance with applicable securities laws,
which will vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with
exemptions from registration and prospectus requirements.
Canadian purchasers are advised to seek legal advice prior to
any resale of the ordinary shares in the form of ordinary shares
or ADSs.
Each Canadian investor who purchases the ordinary shares in the
form of ordinary shares or ADSs will be deemed to have
represented to us and the dealers that such investor:
(a) is entitled under applicable securities laws to
purchase such securities without the benefit of a prospectus
qualified under such securities laws and, in the case of
purchasers in Provinces other than Ontario and Newfoundland and
Labrador and except as otherwise provided herein, without the
services of a dealer registered pursuant to such securities laws;
(b) is basing its investment decision solely on this
prospectus and not on any other information concerning the
Issuer or the Offering;
(c) has reviewed the terms above regarding resale
restrictions;
(d) is resident in one of the Private Placement Provinces;
(e) is purchasing the securities with the benefit of the
prospectus exemption provided by Section 2.3 of National
Instrument
45-106
Prospectus Exempt Distributions (NI 45-106)
(that is, such purchaser is purchasing as principal and is an
accredited investor within the meaning of
Section 1.1 of NI
45-106); and
is either purchasing the securities as principal for its own
account, or is deemed to be purchasing the securities as
principal for its own account in accordance with applicable
securities laws;
(f) if the investor is an accredited investor
in reliance on paragraph (m) of the definition of
accredited investor in section 1.1 of NI
45-106, the
investor was not created or used solely to purchase or hold
securities as an accredited investor under that paragraph (m);
(g) if the investor is in Ontario, the investor is
(i) purchasing from a broker, investment dealer or a
limited market dealer within the meaning of section 98 of
the Regulation to the Securities Act (Ontario) or
(ii) not an individual and is an accredited investor, as
defined in section 1.1 of N I45 106, and is purchasing the
securities from an international dealer within the meaning of
section 98(4) of the Regulation to the Securities
Act (Ontario); and
(h) if required by applicable securities laws or stock
exchange rules, the purchaser will execute, deliver and file or
assist the issuer in obtaining and filing such reports,
undertakings and other documents relating to the purchase of the
securities by the investor as may be required by applicable
securities law, any securities commission, stock exchange or
other regulatory authority.
Each Canadian investor who purchases the ordinary shares in the
form of ordinary shares or ADSs hereby acknowledges to us and
the dealers that we and the dealers and our and their respective
agents and advisers may each collect, use and disclose its name
and other specified personally identifiable information (the
Information), including the amount of
securities that it has purchased for purposes of meeting legal,
regulatory and audit requirements and as otherwise permitted or
required by law or regulation. The Canadian investor consents to
the disclosure of that information.
By purchasing ordinary shares in the form of ordinary shares or
ADSs the Canadian investor acknowledges (A) that
Information concerning the investor will be disclosed to the
relevant Canadian securities regulatory authorities, including
the Ontario Securities Commission, and may become available to
the public in accordance
70
with the requirements of applicable securities and freedom of
information laws and the investor consents to the disclosure of
the Information; (B) is being collected indirectly by the
applicable Canadian securities regulatory authority under the
authority granted to it in securities legislation; and
(C) is being collected for the purposes of the
administration and enforcement of the applicable Canadian
securities legislation; by purchasing the ordinary shares in the
form of ordinary shares or ADSs the Canadian investor shall be
deemed to have authorized such indirect collection of personal
information by the relevant Canadian securities regulatory
authorities. Questions about such indirect collection of
Information by the Ontario Securities Commission should be
directed to the Administrative Assistant to the Director of
Corporate Finance, Ontario Securities Commission,
Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario
M5H 3S8 or to the following telephone number
(416) 593-8086.
Any discussion of taxation and related matters contained in this
prospectus does not purport to be a comprehensive description of
all the tax considerations that may be relevant to a decision to
purchase the ordinary shares in the form of ordinary shares or
ADSs. Canadian investors in the ordinary shares in the form of
ordinary shares or ADSs should consult their own legal and tax
advisers with respect to the Canadian tax consequences of such
an investment in their particular circumstances and with respect
to the eligibility of the ordinary shares in the form of
ordinary shares or ADSs for investment by the investor under
relevant Canadian federal and provincial legislation and
regulations.
Except as otherwise expressly required by applicable law or as
agreed to in contract, no representation, warranty, or
undertaking (express or implied) is made and no responsibilities
or liabilities of any kind or nature whatsoever are accepted by
us or the dealers as to the accuracy or completeness of the
information contained in this prospectus or any other
information provided by us in connection with this offering.
Purchasers
Rights
Securities legislation in certain of the Canadian provinces
provides purchasers of securities pursuant to this prospectus
with a remedy for damages or rescission, or both, in addition to
any other rights they may have at law, where this prospectus and
any amendment to it contains a Misrepresentation.
Where used herein, Misrepresentation means an untrue
statement of a material fact or an omission to state a material
fact that is required to be stated or that is necessary to make
any statement not misleading in light of the circumstances in
which it was made. These remedies, or notice with respect to
these remedies, must be exercised or delivered, as the case may
be, by the purchaser within the time limits prescribed by
applicable securities legislation.
The following summary is subject to the express provisions of
the applicable securities laws, regulations and rules, and
reference is made thereto for the complete text of such
provisions. Such provisions may contain limitations and
statutory defences not described here on which the Issuer and
other applicable parties may rely. Purchasers should refer to
the applicable provisions of the securities legislation of their
province for the particulars of these rights or consult with a
legal adviser.
The rights of action described below are in addition to and
without derogation from any other right or remedy available at
law to the purchaser and are intended to correspond to the
provisions of the relevant securities legislation and are
subject to the defences contained therein.
The following is a summary of rights of rescission or damages,
or both, available to purchasers resident in certain of the
provinces of Canada.
Ontario
Purchasers
Section 6.2 of Ontario Securities Commission
Rule 45-501
provides that purchasers who have been delivered an offering
memorandum such as this prospectus in connection with a
distribution of securities in reliance upon the accredited
investor prospectus exemption in Section 2.3 of NI
45-106 have
the rights referred to in Section 130.1 of the
Securities Act (Ontario) (the Ontario
Act). The Ontario Act provides such purchasers with a
statutory right of action against us for rescission or damages
in the event that this prospectus and any amendment to it
contains a misrepresentation.
Where this prospectus is delivered to a purchaser and contains a
misrepresentation, the purchaser, without regard to whether the
purchaser relied on the misrepresentation, will have a statutory
right of action against us for
71
damages or for rescission; if the purchaser elects to exercise
the right of rescission, the purchaser will have no right of
action for damages against us. No such action shall be commenced
more than, in the case of an action for rescission,
180 days after the date of the transaction that gave rise
to the cause of action, or, in the case of any action other than
an action for rescission, the earlier of: (i) 180 days
after the purchaser first had knowledge of the facts giving rise
to the cause of action, or (ii) three years after the date
of the transaction that gave rise to the cause of action.
The Ontario Act provides a number of limitations and defences to
such actions, including the following.
(a) we are not liable if we prove that the purchaser
purchased the securities with knowledge of the misrepresentation;
(b) in an action for damages, we shall not be liable for
all or any portion of the damages that we prove does not
represent the depreciation in value of the securities as a
result of the misrepresentation relied upon; and
(c) in no case shall the amount recoverable exceed the
price at which the securities were offered.
These rights are not available for a purchaser that is:
(a) a Canadian financial institution, meaning either:
(i) an association governed by the Cooperative Credit
Associations Act (Canada) or a central cooperative credit
society for which an order has been made under
section 473(1) of that Act; or
(ii) a bank, loan corporation, trust company, trust
corporation, insurance company, treasury branch, credit union,
caisse populaire, financial services corporation, or league
that, in each case, is authorized by an enactment of Canada or a
province or territory of Canada to carry on business in Canada
or a territory in Canada;
(b) Schedule III bank, meaning an authorized foreign
bank named in Schedule III of the Bank Act (Canada);
(c) the Business Development Bank of Canada incorporated
under the Business Development Bank of Canada Act
(Canada); or
(d) a subsidiary of any person referred to in paragraphs
(a), (b) or (c), if the person owns all of the voting
securities of the subsidiary, except the voting securities
required by law to be owned by the directors of the subsidiary.
Manitoba
Purchasers
The right of action for rescission or damages described herein
is conferred by section 141.1 of the Securities Act
(Manitoba) (the Manitoba Act). The
Manitoba Act provides, in the relevant part, that in the event
that an offering memorandum such as this prospectus contains a
misrepresentation, a purchaser who purchases a security offered
by the offering memorandum is deemed to have relied on the
representation if it was a misrepresentation at the time of
purchase.
Such purchaser has a statutory right of action for damages
against us, every director of us at the date of the offering
memorandum and every person or company who signed the offering
memorandum or, alternatively, while still an owner of the
securities purchased by the purchaser, may elect instead to
exercise a statutory right of rescission against us, in which
case the purchaser shall have no right of action for damages
against us or the directors. No such action may be commenced to
enforce the right of action for rescission or damages more than
(a) 180 days after the day of the transaction that
gave rise to the cause of action, in the case of an action for
rescission, or (b) the earlier of (i) 180 days
after the day that the plaintiff first had knowledge of the
facts giving rise to the cause of action, or (ii) two years
after the day of the transaction that gave rise to the cause of
action, in any other case.
The Manitoba Act provides a number of limitations and defences,
including the following:
(a) no person or company is liable if the person or company
proves that the purchaser had knowledge of the misrepresentation;
72
(b) in the case of an action for damages, the defendant is
not liable for all or any part of the damages that the defendant
proves do not represent the depreciation in value of the
security as a result of the misrepresentation; and
(c) in no case will the amount recoverable in any action
exceed the price at which the securities were offered under the
offering memorandum.
In addition, a person or company, other than us, will not be
liable if that person or company proves that:
(a) the offering memorandum was sent to the purchaser
without the persons or companys knowledge or
consent, and that, after becoming aware that it was sent, the
person or company promptly gave reasonable notice to us that it
was sent without the persons or companys knowledge
and consent;
(b) after becoming aware of the misrepresentation, the
person or company withdrew the persons or companys
consent to the offering memorandum and gave reasonable notice to
us of the withdrawal and the reason for it;
(c) with respect to any part of the offering memorandum
purporting to be made on the authority of an expert or to be a
copy of, or an extract from, an experts report, opinion or
statement, the person or company proves that the person or
company did not have any reasonable grounds to believe and did
not believe that (i) there had been a misrepresentation, or
(ii) the relevant part of the offering memorandum
(A) did not fairly represent the experts report,
opinion or statement, or (B) was not a fair copy of, or an
extract from, the experts report, opinion or
statement; or
(d) with respect to any part of the offering memorandum not
purporting to be made on an experts authority and not
purporting to be a copy of, or an extract from, an experts
report, opinion or statement, unless the person or company
(i) did not conduct an investigation sufficient to provide
reasonable grounds for a belief that there had been no
misrepresentation, or (ii) believed there had been a
misrepresentation.
If a misrepresentation is contained in a record incorporated by
reference in, or is deemed to be incorporated into, an offering
memorandum, the misrepresentation is deemed to be contained in
the offering memorandum.
New
Brunswick Purchasers
Section 2.1 of New Brunswick Securities Commission
Rule 45-802
provides that the rights of action referred to in
Section 150 of the Securities Act (New Brunswick)
(the New Brunswick Act) apply to information
relating to an offering memorandum such as this prospectus that
is provided to a purchaser in securities in connection with a
distribution made in reliance on the accredited
investor prospectus exemption in Section 2.3 of NI
45-106. The
New Brunswick Act provides such purchasers with a statutory
right of action against the issuer of the securities for
rescission or damages in the event that the offering memorandum
and any amendment to it contains a misrepresentation.
The New Brunswick Act provides that, subject to certain
limitations, where any information relating to an offering that
is provided to a purchaser in the securities contains a
misrepresentation, a purchaser who purchases the securities
shall be deemed to have relied on the misrepresentation if it
was a misrepresentation at the time of purchase. Such purchaser
has a right of action for damages against us or may elect to
exercise a right of rescission against us, in which case the
purchaser shall have no right of action for damages. No such
action shall be commenced more than, in the case of an action
for rescission, 180 days after the date of the transaction
that gave rise to the cause of action or, in the case of any
action, other than an action for rescission, the earlier of
(i) one year after the plaintiff first had knowledge of the
facts giving rise to the cause of action, and (ii) six
years after the date of the transaction that gave rise to the
cause of action.
The New Brunswick Act provides a number of limitations and
defences to such actions, including the following:
(a) we are not liable if we prove that the purchaser
purchased the securities with knowledge of the misrepresentation;
(b) in an action for damages, we shall not be liable for
all or any portion of the damages that we prove do not represent
the depreciation in value of the securities as a result of the
misrepresentation relied upon; and
73
(c) in no case shall the amount recoverable exceed the
price at which the securities were offered.
Newfoundland
and Labrador Purchasers
The right of action for rescission or damages described herein
is conferred by section 130.1 of the Securities Act
(Newfoundland and Labrador) (the NL Act).
The NL Act provides, in the relevant part, that if an offering
memorandum such as this prospectus contains a misrepresentation
when a person or company purchases a security offering by the
offering memorandum, the purchaser has, without regard to
whether the purchaser relied on the misrepresentation, a right
of action for damages or rescission.
Such purchaser has a statutory right of action for damages
against us, every director of us at the date of the offering
memorandum and every person who signed the offering memorandum.
Alternatively, the purchaser has a right of action for
rescission against us, in which case the purchaser shall have no
right of action for damages against the persons described above.
No such action may be commenced to enforce the right of action
for rescission or damages more than (a) 180 days after
the day of the transaction that gave rise to the cause of
action, in the case of an action for rescission, or (b) the
earlier of (i) 180 days after the plaintiff first had
knowledge of the facts giving rise to the cause of action, or
(ii) three years after the day of the transaction giving
rise to the cause of action, in any other case.
The NL Act provides a number of limitations and defences,
including the following:
(a) no person is liable if the person proves that the
purchaser had knowledge of the misrepresentation;
(b) in the case of an action for damages, the defendant is
not liable for any damages that the defendant proves do not
represent the depreciation in value of the security resulting
from the misrepresentation; and
(c) the amount recoverable in respect of such action shall
not exceed the price at which the securities were offered under
the offering memorandum.
In addition, a person, other than us, is not liable if the
person proves that:
(a) the offering memorandum was sent to the purchaser
without the persons knowledge or consent, and that, upon
becoming aware if its being sent, the person had promptly given
reasonable notice to us that it had been sent without the
knowledge and consent of the person;
(b) the person, upon becoming aware of the
misrepresentation in the offering memorandum, withdrew the
persons consent to the offering memorandum and gave
reasonable notice to us of the withdrawal and the reason for it;
(c) with respect to any part of the offering memorandum
purporting to be made on the authority of an expert or
purporting to be a copy of, or an extract from, a report,
statement or opinion of an expert, the person had no reasonable
grounds to believe and did not believe that (i) there had
been a misrepresentation, or (ii) the relevant part of the
offering memorandum (A) did not fairly represent the
report, statement or opinion of the expert, or (B) was not
a fair copy of, or an extract from, the report, statement or
opinion of the expert; or
(d) with respect to any part of the offering memorandum not
purporting to be made on the authority of an expert and not
purporting to be a copy of, an extract from, a report, opinion
or statement of an expert, unless the person or company
(i) did not conduct an investigation sufficient to provide
reasonable grounds for a belief that there had been no
misrepresentation, or (ii) believed there had been a
misrepresentation.
Nova
Scotia Purchasers
The right of action for rescission or damages described herein
is conferred by section 138 of the Securities Act
(Nova Scotia) (the Nova Scotia Act). The
Nova Scotia Act provides, in the relevant part, that in the
event that an offering memorandum such as this prospectus,
together with any amendments hereto, or any advertising or sales
literature (as defined in the Nova Scotia Act) contains a
misrepresentation, a purchaser who purchases the securities
referred to in it is deemed to have relied upon such
misrepresentation if it was a misrepresentation at the time of
purchase.
74
Such purchaser has a statutory right of action for damages
against the seller (which includes us) and, subject to certain
additional defences, the directors of the seller and any person
who signed the offering memorandum or, alternatively, while
still an owner of the securities purchased by the purchaser, may
elect instead to exercise a statutory right of rescission
against us, in which case the purchaser shall have no right of
action for damages against the seller or the directors. No such
action shall be commenced to enforce the right of action for
rescission or damages more than 120 days after the date
payment was made for the securities (or after the date on which
initial payment was made for the securities where payments
subsequent to the initial payment are made pursuant to a
contractual commitment assumed prior to, or concurrently with,
the initial payment).
The Nova Scotia Act provides a number of limitations and
defences, including the following:
(a) no person or company is liable if the person or company
proves that the purchaser purchased the securities with
knowledge of the misrepresentation;
(b) in the case of an action for damages, no person or
company is liable for all or any portion of the damages that it
proves do not represent the depreciation in value of the
securities as a result of the misrepresentation; and
(c) in no case will the amount recoverable in any action
exceed the price at which the securities were offered to the
purchaser.
In addition, a person or company, other than the seller, will
not be liable if that person or company proves that:
(a) the offering memorandum or any amendment to the
offering memorandum was sent or delivered to the purchaser
without the persons or companys knowledge or consent
and that, on becoming aware of its delivery, the person or
company gave reasonable general notice that it was delivered
without the persons or companys knowledge or consent;
(b) after delivery of the offering memorandum or any
amendment to the offering memorandum and before the purchase of
the securities by the purchaser, on becoming aware of any
misrepresentation in the offering memorandum or any amendment to
the offering memorandum, the person or company withdrew the
persons or companys consent to the offering
memorandum or any amendment to the offering memorandum, and gave
reasonable general notice of the withdrawal and the reason for
it; or
(c) with respect to any part of the offering memorandum or
any amendment to the offering memorandum purporting (i) to
be made on the authority of an expert, or (ii) to be a copy
of, or an extract from, a report, an opinion or a statement of
an expert, the person or company had no reasonable grounds to
believe and did not believe that (A) there had been a
misrepresentation, or (B) the relevant part of the offering
memorandum or any amendment to the offering memorandum did not
fairly represent the report, opinion or statement of the expert,
or was not a fair copy of, or an extract from, the report,
opinion or statement of the expert.
Furthermore, no person or company, other than the seller, is
liable with respect to any part of the offering memorandum or
any amendment to the offering memorandum not purporting
(a) to be made on the authority of an expert or (b) to
be a copy of, or an extract from, a report, opinion or statement
of an expert, unless the person or company (i) failed to
conduct a reasonable investigation to provide reasonable grounds
for a belief that there had been no misrepresentation or
(ii) believed that there had been a misrepresentation.
If a misrepresentation is contained in a record incorporated by
reference into, or deemed incorporated by reference into, the
offering memorandum or amendment to the offering memorandum, the
misrepresentation is deemed to be contained in the offering
memorandum or amendment to the offering memorandum.
Prince
Edward Island Purchasers
The right of action for rescission or damages described herein
is conferred by section 112 of the Securities Act
(Prince Edward Island) (the P.E.I. Act).
The P.E.I. Act provides, in the relevant part, that if an
offering memorandum such as this prospectus contains a
misrepresentation, a purchaser who purchases a security offered
by the offering memorandum during the period of distribution
has, without regard to whether the purchaser relied on the
misrepresentation, a right of action for damages.
75
Such purchaser has a statutory right of action for damages
against us, the selling securityholder on whose behalf the
distribution is made, every director of the issuer at the date
of the offering memorandum and every person who signed the
offering memorandum. Alternatively, the purchaser who purchases
security offered by the offering memorandum during the period of
distribution has a right of action for rescission against us or
the selling securityholder on whose behalf the distribution is
made, in which case the purchaser shall have no right of action
for damages against the persons described above. No such action
may be commenced to enforce the right of action for rescission
or damages more than (a) 180 days after the day of the
transaction that gave rise to the cause of action, in the case
of an action for rescission, or (b) the earlier of
(i) 180 days after the plaintiff first had knowledge
of the facts giving rise to the cause of action, or
(ii) three years after the day of the transaction giving
rise to the cause of action, in any other case.
The P.E.I. Act provides a number of limitations and defences,
including the following:
(a) no person is liable if the person proves that the
purchaser purchased securities with knowledge of the
misrepresentation;
(b) in the case of an action for damages, the defendant is
not liable for any damages that the defendant proves do not
represent the depreciation in value of the security resulting
from the misrepresentation; and
(c) the amount recoverable by a plaintiff in respect of
such action must not exceed the price at which the securities
purchased by the plaintiff were offered.
In addition, a person, other than us and any selling
securityholder, is not liable if the person proves that:
(a) the offering memorandum was sent to the purchaser
without the persons knowledge or consent, and that, upon
becoming aware if its being sent, the person had promptly given
reasonable notice to us that it had been sent without the
knowledge and consent of the person;
(b) the person, upon becoming aware of the
misrepresentation in the offering memorandum, had withdrawn the
persons consent to the offering memorandum and had given
reasonable notice to us of the withdrawal and the reason for
it; or
(c) with respect to any part of the offering memorandum
purporting to be made on the authority of an expert or
purporting to be a copy of, or an extract from, a report,
statement or opinion of an expert, the person had no reasonable
grounds to believe and did not believe that (i) there had
been a misrepresentation, or (ii) the relevant part of the
offering memorandum (A) did not fairly represent the
report, statement or opinion of the expert, or (B) was not
a fair copy of, or an extract from, the report, statement or
opinion of the expert.
In addition, a person is not liable with respect to a
misrepresentation in forward looking information if:
(a) the offering memorandum containing the forward looking
information also contains, proximate to the forward looking
information (i) reasonable cautionary language identifying
the forward looking information as such and identifying material
factors that could cause actual results to differ materially
from a conclusion, forecast or projection in the forward looking
information, and (ii) a statement of the material factors
or assumptions that were applied in drawing a conclusion or
making a forecast or projection set out in the forward looking
information; and
(b) the person had a reasonable basis for drawing the
conclusions or making the forecast or projections set out in the
forward looking information.
The above paragraph does not relieve a person of liability
respecting forward looking information in a financial statement
required to be filed under Prince Edward Island securities laws.
Saskatchewan
Purchasers
The right of action for rescission or damages described herein
is conferred by section 138 of the Securities Act, 1988
(Saskatchewan) (the Saskatchewan Act) The
Saskatchewan Act provides, in the relevant part, that in the
event that an offering memorandum such as this prospectus,
together with any amendments hereto contains a
76
misrepresentation, a purchaser who purchases securities covered
by the offering memorandum is deemed to have relied upon such
misrepresentation if it was a misrepresentation at the time of
purchase.
Such purchaser has a statutory right for rescission against us
or has a right of action for damages against:
(a) us;
(b) every promoter and director of us, as the case may be,
at the time the offering memorandum or any amendment to it was
sent or delivered;
(c) every person or company whose consent has been filed
respecting the offering, but only with respect to reports,
opinions or statements that have been made by them;
(d) every person or company that, in addition to the
persons or companies mentioned in clauses (a) to (c),
signed the offering memorandum or the amendment to the offering
memorandum; and
(e) every person who or company that sells securities on
behalf of us under the offering memorandum or amendment to the
offering memorandum;
If such purchaser elects to exercise a statutory right of
rescission against us, it shall have no right of action for
damages against that person or company. No such action for
rescission or damages shall be commenced more than, in the case
of a right of rescission, 180 days after the date of the
transaction that gave rise to the cause of action or, in the
case of any action, other than an action for rescission, such
action shall be commenced before the earlier of (i) one
year after the plaintiff first had knowledge of the facts giving
rise to the cause of action, and (ii) six years after the
date of the transaction that gave rise to the cause of action.
The Saskatchewan Act provides a number of limitations and
defences, including the following:
(a) no person or company will be liable if the person or
company proves that the purchaser purchased the securities with
knowledge of the misrepresentation;
(b) in the case of an action for damages, no person or
company will be liable for all or any portion of the damages
that it proves do not represent the depreciation in value of the
securities as a result of the misrepresentation;
(c) in no case will the amount recoverable in any action
exceed the price at which the securities were offered to the
purchaser.
In addition, no person or company, other than us, will be liable
if the person or company proves that:
(a) the offering memorandum or any amendment to it was sent
or delivered without the persons or companys
knowledge or consent and that, on becoming aware of it being
sent or delivered, that person or company gave reasonable
general notice that it was so sent or delivered; or
(b) with respect to any part of the offering memorandum or
any amendment to it purporting to be made on the authority of an
expert, or purporting to be a copy of, or an extract from, a
report, an opinion or a statement of an expert, that person or
company had no reasonable grounds to believe and did not believe
that there had been a misrepresentation, the part of the
offering memorandum or any amendment to it did not fairly
represent the report, opinion or statement of the expert, or was
not a fair copy of, or an extract from, the report, opinion or
statement of the expert.
Similar rights of action for damages and rescission are provided
in section 138.1 of the Saskatchewan Act in respect of a
misrepresentation in advertising and sales literature
disseminated in connection with an offering of securities.
Section 138.2 of the Saskatchewan Act also provides that
where an individual makes a verbal statement to a prospective
purchaser that contains a misrepresentation relating to the
security purchased and the verbal statement is made either
before or contemporaneously with the purchase of the security,
the purchaser is deemed to have relied on the misrepresentation,
if it was a misrepresentation at the time of purchase, and has a
right of action for damages against the individual who made the
verbal statement.
77
Section 141(1) of the Saskatchewan Act provides a purchaser
with the right to void the purchase agreement and to recover all
money and other consideration paid by the purchaser for the
securities if the securities are sold in contravention of such
Act, the regulations to such Act or a decision of the
Saskatchewan Financial Services Commission.
Section 141(2) of the Saskatchewan Act also provides a
right of action for rescission or damages to a purchaser of
securities to whom an offering memorandum or any amendment to it
was not sent or delivered prior to or at the same time as the
purchaser enters into an agreement to purchase the securities,
as required by Section 80.1 of the Saskatchewan Act.
The Saskatchewan Act also provides a purchaser who has received
an amended offering memorandum delivered in accordance with
subsection 80.1(3) of such Act has a right to withdraw from the
agreement to purchase the securities by delivering a notice to
the person who or company that is selling the securities,
indicating the purchasers intention not to be bound by the
purchase agreement, provided such notice is delivered by the
purchaser within two business days of receiving the amended
offering memorandum.
Language
of Documents
Upon receipt of this document, you hereby confirm that you have
expressly requested that all documents evidencing or relating in
any way to the offer
and/or sale
of the ordinary shares in the form of ordinary shares or ADSs
(including for greater certainty any purchase confirmation or
any notice) be drawn up in the English language only. Par la
réception de ce document, vous confirmez par les
présentes que vous avez expressment exigé que tous les
documents faisant foi ou se rapportant de quelque manière
que ce soit à loffre ou à la vente des valeurs
mobilières décrites aux présentes (incluant, pour
plus de certitude, toute confirmation dachat ou tout avis)
soient rédigés en anglais seulement.
Enforcement
of Legal Rights
We are incorporated under the laws of Jersey, Channel Islands.
All or substantially all of the directors and officers may be
located outside of Canada and, as a result, it may not be
possible for Canadian investors to effect service of process
within Canada upon us or such persons. All or a substantial
portion of our assets and those of such other persons may be
located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against us or such persons in
Canada or to enforce a judgment obtained in Canadian courts
against us or such persons outside of Canada.
South
Africa
The ordinary shares and the ADSs has not been and shall not be
offered by this prospectus to the public in South Africa in
terms of Chapter VI of the South African Companies Act,
1973 (as amended). Accordingly, such ordinary shares may not be
handed on, surrendered to, renounced in favor of or assigned to
any person in South Africa in any manner which could be
construed as an offer to the public in terms of Chapter VI
of the Companies Act, 1973 (as amended).
Australia
This document has not been lodged with the Australian
Securities & Investments Commission and is only
directed to certain categories of exempt persons. Accordingly,
if you receive this document in Australia:
(a) you confirm and warrant that you are either:
(i) a sophisticated investor under section
708(8)(a) or (b) of the Corporations Act 2001 (Cth) of
Australia (Corporations Act);
(ii) a sophisticated investor under section
708(8)(c) or (d) of the Corporations Act and that you have
provided an accountants certificate to the section
708(8)(c)(i) or (ii) of the Corporations Act and related
regulations before the offer has been made;
(iii) a person associated with the company under
section 708(12) of the Corporations Act; or
78
(iv) professional investor within the meaning
of section 708(11)(a) or (b) of the Corporations Act,
and to the extent that you are unable to confirm or warrant that
you are an exempt sophisticated investor, associated person or
professional investor under the Corporations Act any offer made
to you under this document is void and incapable of acceptance.
(b) you warrant and agree that you will not offer any of
the shares or ADSs issued to you pursuant to this document for
resale in Australia within 12 months of those shares or
ADSs being issued unless any such resale offer is exempt from
the requirement to issue a disclosure document under
section 708 of the Corporations Act.
Japan
The ordinary shares or ADSs have not been and will not be
registered under the Financial Instruments and Exchange Law, as
amended (the FIEL). This document is not an offer of
securities for sale, directly or indirectly, in Japan or to, or
for the benefit of, any resident of Japan (which term as used
herein means any person resident in Japan, including any
corporation or entity organised under the laws of Japan) or to
others for reoffer or resale, directly or indirectly, in Japan
or to, or for the benefit of, any resident of Japan, except
pursuant to an exemption from the registration requirements
under the FIEL and otherwise in compliance with such law and any
other applicable laws, regulations and ministerial guidelines of
Japan.
DIFC
This document relates to an Exempt Offer in accordance with the
Offered Securities Rules of the Dubai Financial Services
Authority (DFSA). This document is intended for
distribution only to persons of a type specified in the Offered
Securities Rules of the DFSA. It must not be delivered to, or
relied on by, any other person. The DFSA has no responsibility
for reviewing or verifying any documents in connection with
Exempt Offers. The DFSA has not approved this document nor taken
steps to verify the information set forth herein and has no
responsibility for the document. The ordinary shares or ADSs to
which this document relates may be illiquid
and/or
subject to restrictions on their resale. Prospective purchasers
of the shares and ADSs offered should conduct their own due
diligence on the shares and the ADSs. If you do not understand
the contents of this document you should consult an authorized
financial advisor.
Switzerland
This document does not constitute a prospectus within the
meaning of Articles 652a and 1156 of the Swiss Code of
Obligations or a listing prospectus according to Article 32
of the Listing Rules of the SWX Swiss Exchange. The ordinary
shares or ADSs will not be listed on the SWX Swiss Exchange and,
therefore, the document does not comply with the disclosure
standards of the Listing Rules of the SWX Swiss Exchange.
Accordingly, the ordinary shares or ADSs may not be offered to
the public in or from Switzerland, but only to a selected and
limited group of investors, which do not subscribe the shares
and the ADSs with a view to distribution to the public. The
investors will be individually approached by an underwriter from
time to time. This document is personal to each offeree and does
not constitute an offer to any other person. The document may
only be used by those persons to whom it has been handed out in
connection with the offer described herein and may neither
directly nor indirectly be distributed or made available to
other persons without the express consent of the Randgold. It
may not be used in connection with any other offer and shall in
particular not be copied
and/or
distributed to the public in or from Switzerland.
79
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
We estimate the fees and expenses to be incurred in connection
with the issuance and distribution of the ordinary shares and
ADSs in the offering, other than underwriting discounts and
commissions, to be as follows:
|
|
|
|
|
SEC registration fee
|
|
$
|
21,000
|
|
Legal fees and expenses
|
|
$
|
400,000
|
|
Accounting fees and expenses
|
|
$
|
400,000
|
|
Printing and engraving costs
|
|
$
|
60,000
|
|
Blue sky fees and miscellaneous expenses
|
|
$
|
19,000
|
|
|
|
|
|
|
Total
|
|
$
|
900,000
|
|
|
|
|
|
|
All of these estimated fees and expenses will be paid by us.
80
CHANGE IN
ACCOUNTANTS
As of March 28, 2007, we appointed BDO Stoy Hayward LLP as
our auditors. PricewaterhouseCoopers LLP and
PricewaterhouseCoopers Inc. have not performed any auditing
services for us with respect to any period subsequent to
December 31, 2006, nor have they performed a Statement on
Auditing Standards No. 100, Interim Financial Information
review of any unaudited interim financial information included
in this prospectus.
EXPERTS
The consolidated financial statements and schedule of Randgold
Resources Limited as of December 31, 2008 and
December 31, 2007 and for each of the two years in the
period ended December 31, 2008 and managements
assessment of the effectiveness of internal control over
financial reporting as of December 31, 2008 incorporated by
reference in this Prospectus by reference to the Annual Report
on
Form 20-F
for the year ended December 31, 2008 have been so
incorporated in reliance on the reports of BDO Stoy Hayward LLP,
an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements and schedule of Randgold
Resources Limited for the year ended December 31, 2006
incorporated in this Prospectus by reference to the Annual
Report on
Form 20-F
for the year ended December 31, 2008 have been so
incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts
in auditing and accounting.
The financial statements of Société des Mines de
Morila SA as of December 31, 2008 and December 31,
2007 and for each of the two years in the period ended
December 31, 2008 incorporated by reference in this
Prospectus by reference to the Annual Report on
Form 20-F
of Randgold Resources Limited for the year ended
December 31, 2008 have been so incorporated in reliance on
the report of BDO Stoy Hayward, LLP, independent accountants,
given on the authority of said firm as experts in auditing and
accounting.
The financial statements of Société des Mines de
Morila SA for the year ended December 31, 2006 incorporated
in this Prospectus by reference to the Annual Report on
Form 20-F
of Randgold Resources Limited for the year ended
December 31, 2008 have been so incorporated in reliance on
the report of PricewaterhouseCoopers Inc., an independent
registered public accounting firm, given on the authority of
said firm as experts in auditing and accounting.
VALIDITY
OF SECURITIES
The validity of the ordinary shares offered by this prospectus
will be passed upon for us by our Jersey counsel, Ogier. Certain
legal matters relating to this offering will be passed upon by
Fulbright & Jaworski L.L.P., our special US counsel.
Ashurst LLP are acting as English counsel to us in connection
with this offering. Certain legal matters relating to this
offering will be passed upon by Cleary Gottlieb
Steen & Hamilton LLP, special US and English counsel
to the underwriters.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement, of which
this prospectus constitutes a part, on
Form F-3,
with respect to the ordinary shares being sold in this offering.
This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and
schedules to the registration statement, because some parts have
been omitted in accordance with rules and regulations of the
SEC. For further information about us and the ordinary shares
being sold in this offering, please refer to the registration
statement and the exhibits and schedules filed as a part of the
registration statement.
We are subject to the information reporting requirements of the
Exchange Act applicable to foreign private issuers. As a foreign
private issuer, we are exempt from certain rules and regulations
under the Exchange Act prescribing the furnishing and content of
proxy statements, and our officers, directors and principal
shareholders are exempt from the reporting and
short-swing profit recovery provisions contained in
Section 16 of the Exchange Act, with respect to their
purchase and
81
sale of our ordinary shares. In addition, we are not required to
file reports and financial statements with the SEC as frequently
or as promptly as US companies whose securities are registered
under the Exchange Act. However, we file with the SEC an annual
report on
Form 20-F
containing financial statements audited by an independent
registered public accounting firm. We also furnish reports on
Form 6-K
containing unaudited financial information for the first three
quarters of each fiscal year and other material information.
You can read and copy any materials we file with the SEC at its
Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You can obtain information about
the operations of the SEC Public Reference Room by calling the
SEC at
1-800-SEC-0330.
The SEC also maintains a web site that contains information we
file electronically with the SEC, which you can access over the
Internet at www.sec.gov.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference into
this prospectus the information we file with the SEC. This means
that we can disclose important information to you by referring
you to another document that we have filed separately with the
SEC. The information incorporated by reference is considered to
be part of this prospectus. Any information that we file later
with the SEC and that is deemed or identified by us as being
incorporated by reference will automatically update and
supersede information in this prospectus. In all such cases, you
should rely on the later information over different information
included in this prospectus.
This prospectus incorporates by reference the following
documents:
|
|
|
|
|
Our annual report on
Form 20-F
for the fiscal year ended December 31, 2008 filed on
May 15, 2009.
|
|
|
|
The description of our ordinary shares and American Depositary
Shares contained in our report of foreign private issuer on Form
6-K filed on July 27, 2009, and any subsequent amendment or
report filed for the purpose of updating this description.
|
In addition, unless otherwise stated in this prospectus, all
documents that we file with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and, to the extent, if
any, we designate therein, reports on
Form 6-K
we furnish to the SEC after the date of this prospectus and
prior to the termination of any offering contemplated in this
prospectus, are incorporated herein by reference.
Our annual report on
Form 20-F
for the fiscal year ended December 31, 2008, filed on
May 15, 2009, contains a description of our business and
audited consolidated financial statements with reports by our
independent registered public accounting firms.
Copies of all documents incorporated by reference in this
prospectus, other than exhibits to those documents unless such
exhibits are specifically incorporated by reference in this
prospectus, will be provided at no cost to each person,
including any beneficial owner, who receives a copy of this
prospectus on the written or oral request of that person made to:
David Haddon
Company Secretary
c/o Randgold
Resources Limited
La Motte Chambers
La Motte Street
St. Helier, Jersey JE11BJ
Channel Islands
ENFORCEABILITY
OF CIVIL LIABILITIES
We are incorporated in Jersey, Channel Islands. All of our
directors and executive officers, except for Mr. R.I.
Israel, Mr. P. Liétard and Mr. N.P.
Cole, Jr. and some of the experts named in this prospectus,
reside outside of the United States. Substantially all of the
assets of these persons and substantially all of our assets are
located outside the United States. As a result, it may not be
possible for investors to effect service of process on these
persons or us within the United States, or to enforce against
these persons or us, either inside or outside the United States,
a
82
judgment obtained in a United States court predicated upon the
civil liability provisions of the Federal securities or other
laws of the United States or any state thereof. A foreign
judgment is not directly enforceable in Jersey, but constitutes
a cause of action which will be enforced by Jersey courts
provided that:
|
|
|
|
|
the court which pronounced the judgment has jurisdiction to
entertain the case according to the principles recognized by
Jersey law with reference to the jurisdiction of the foreign
courts;
|
|
|
|
the judgment is final and conclusive; it cannot be altered by
the courts which pronounced it;
|
|
|
|
there is payable pursuant to a judgment a sum of money, not
being a sum payable in respect of tax or other charges of a like
nature or in respect of a fine or other penalty;
|
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|
|
the judgment has not been prescribed;
|
|
|
|
the courts of the foreign country have jurisdiction in the
circumstances of the case;
|
|
|
|
the judgment was not obtained by fraud; and
|
|
|
|
the recognition and enforcement of the judgment is not contrary
to public policy in Jersey, including observance of the rules of
natural justice which require that documents in the United
States proceeding were properly served on the defendant and that
the defendant was given the right to be heard and represented by
counsel in a free and fair trial before an impartial tribunal.
|
It is the policy of Jersey courts to award compensation for the
loss or damage actually sustained by the person to whom the
compensation is awarded. Although the award of punitive damages
is generally unknown to the Jersey legal system, that does not
mean that awards of punitive damages are not necessarily
contrary to public policy. Whether a judgment was contrary to
public policy depends on the facts of each case. Exorbitant,
unconscionable, or excessive awards will generally be contrary
to public policy. Jersey courts cannot enter into the merits of
the foreign judgment and cannot act as a court of appeal or
review over the foreign courts. Jersey courts will usually
implement their own procedural laws and, where an action based
on an international contract is brought before a Jersey court,
the capacity of the parties to the contract will usually be
determined in accordance with the Jersey Law. It is doubtful
whether an original action based on United States Federal
securities laws can be brought before Jersey courts. A plaintiff
who is not resident in Jersey may be required to provide
security for costs in the event of proceedings being initiated
in Jersey. Furthermore the rules of the Royal Court of Jersey
require that documents executed outside Jersey must be
authenticated for the purpose of use in Jersey.
83
INDEX TO
UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS OF RANDGOLD RESOURCES
LTD.
F-1
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Six Months
|
|
Three Months
|
|
Three Months
|
|
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
|
Notes
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
(US$ in thousands unless otherwise noted)
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold sales on spot
|
|
|
|
|
|
|
212,216
|
|
|
|
199,253
|
|
|
|
114,248
|
|
|
|
103,412
|
|
Loss on matured hedges
|
|
|
|
|
|
|
(22,722
|
)
|
|
|
(17,021
|
)
|
|
|
(11,537
|
)
|
|
|
(8,182
|
)
|
Non-cash profit on roll forward of hedges
|
|
|
|
|
|
|
1,336
|
|
|
|
|
|
|
|
691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
|
|
|
190,830
|
|
|
|
182,232
|
|
|
|
103,402
|
|
|
|
95,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
2,714
|
|
|
|
893
|
|
|
|
788
|
|
|
|
1,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
|
|
|
|
|
|
193,544
|
|
|
|
183,125
|
|
|
|
104,190
|
|
|
|
96,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mine production costs
|
|
|
|
|
|
|
85,986
|
|
|
|
92,952
|
|
|
|
43,277
|
|
|
|
50,127
|
|
Movement in production inventory and ore stockpiles
|
|
|
|
|
|
|
1,600
|
|
|
|
(12,754
|
)
|
|
|
4,119
|
|
|
|
(6,705
|
)
|
Depreciation and amortization
|
|
|
|
|
|
|
13,311
|
|
|
|
11,390
|
|
|
|
6,905
|
|
|
|
5,695
|
|
Other mining and processing costs
|
|
|
|
|
|
|
8,635
|
|
|
|
6,490
|
|
|
|
4,177
|
|
|
|
3,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining and processing costs
|
|
|
|
|
|
|
109,532
|
|
|
|
98,078
|
|
|
|
58,478
|
|
|
|
52,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transport and refining costs
|
|
|
|
|
|
|
778
|
|
|
|
1,234
|
|
|
|
386
|
|
|
|
492
|
|
Royalties
|
|
|
|
|
|
|
11,171
|
|
|
|
10,503
|
|
|
|
6,062
|
|
|
|
5,576
|
|
Exploration and corporate expenditure
|
|
|
|
|
|
|
23,823
|
|
|
|
26,505
|
|
|
|
12,787
|
|
|
|
12,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs
|
|
|
|
|
|
|
145,304
|
|
|
|
136,320
|
|
|
|
77,713
|
|
|
|
71,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
|
|
|
979
|
|
|
|
6,859
|
|
|
|
1,107
|
|
|
|
2,696
|
|
Finance costs
|
|
|
|
|
|
|
(1,549
|
)
|
|
|
(1,413
|
)
|
|
|
(271
|
)
|
|
|
(1,100
|
)
|
Provision for financial assets
|
|
|
7
|
|
|
|
(4,975
|
)
|
|
|
|
|
|
|
(3,885
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance (costs) / income net
|
|
|
|
|
|
|
(5,545
|
)
|
|
|
5,446
|
|
|
|
(3,049
|
)
|
|
|
1,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE INCOME TAX
|
|
|
|
|
|
|
42,695
|
|
|
|
52,251
|
|
|
|
23,428
|
|
|
|
26,762
|
|
Income tax expense
|
|
|
|
|
|
|
(10,679
|
)
|
|
|
(13,860
|
)
|
|
|
(4,504
|
)
|
|
|
(6,526
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT FOR THE PERIOD
|
|
|
|
|
|
|
32,016
|
|
|
|
38,391
|
|
|
|
18,924
|
|
|
|
20,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
|
|
|
|
|
14,781
|
|
|
|
544
|
|
|
|
9,853
|
|
|
|
3,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
46,797
|
|
|
|
38,935
|
|
|
|
28,777
|
|
|
|
23,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the parent
|
|
|
|
|
|
|
25,998
|
|
|
|
33,877
|
|
|
|
14,946
|
|
|
|
17,911
|
|
Non-controlling interests
|
|
|
|
|
|
|
6,018
|
|
|
|
4,514
|
|
|
|
3,978
|
|
|
|
2,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,016
|
|
|
|
38,391
|
|
|
|
18,924
|
|
|
|
20,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the parent
|
|
|
|
|
|
|
40,779
|
|
|
|
34,421
|
|
|
|
24,799
|
|
|
|
20,935
|
|
Non-controlling interests
|
|
|
|
|
|
|
6,018
|
|
|
|
4,514
|
|
|
|
3,978
|
|
|
|
2,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,797
|
|
|
|
38,935
|
|
|
|
28,777
|
|
|
|
23,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (US$)
|
|
|
3
|
|
|
|
0.34
|
|
|
|
0.44
|
|
|
|
0.19
|
|
|
|
0.24
|
|
Diluted earnings per share (US$)
|
|
|
3
|
|
|
|
0.33
|
|
|
|
0.43
|
|
|
|
0.19
|
|
|
|
0.23
|
|
The accompanying notes form part of these condensed consolidated
interim financial statements.
F-2
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30,
|
|
At Dec 31,
|
|
|
Notes
|
|
2009
|
|
2008
|
|
|
(US$ in thousands unless otherwise noted)
|
|
ASSETS
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
6
|
|
|
|
397,842
|
|
|
|
336,138
|
|
Deferred tax
|
|
|
|
|
|
|
884
|
|
|
|
1,559
|
|
Long-term ore stockpiles
|
|
|
5
|
|
|
|
47,469
|
|
|
|
48,831
|
|
Receivables
|
|
|
4
|
|
|
|
7,154
|
|
|
|
9,403
|
|
Available-for-sale financial assets
|
|
|
7
|
|
|
|
33,625
|
|
|
|
38,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL NON-CURRENT ASSETS
|
|
|
|
|
|
|
486,974
|
|
|
|
434,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories and ore stockpiles
|
|
|
5
|
|
|
|
85,760
|
|
|
|
81,781
|
|
Receivables
|
|
|
4
|
|
|
|
65,238
|
|
|
|
47,499
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
219,987
|
|
|
|
257,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
|
|
|
|
370,985
|
|
|
|
386,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
|
|
|
857,959
|
|
|
|
821,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
Equity attributable to owners of the parent
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
3,841
|
|
|
|
3,827
|
|
Share premium
|
|
|
|
|
|
|
459,829
|
|
|
|
455,974
|
|
Retained earnings
|
|
|
|
|
|
|
262,013
|
|
|
|
245,982
|
|
Other reserves
|
|
|
|
|
|
|
(13,075
|
)
|
|
|
(31,387
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of the parent
|
|
|
|
|
|
|
712,608
|
|
|
|
674,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
|
|
|
19,763
|
|
|
|
13,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
|
|
|
|
732,371
|
|
|
|
688,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term borrowings
|
|
|
|
|
|
|
797
|
|
|
|
1,284
|
|
Loans from minority shareholders in subsidiaries
|
|
|
|
|
|
|
2,893
|
|
|
|
3,032
|
|
Financial liabilities forward gold sales
|
|
|
|
|
|
|
10,523
|
|
|
|
15,749
|
|
Deferred tax
|
|
|
|
|
|
|
3,016
|
|
|
|
3,016
|
|
Provision for environmental rehabilitation
|
|
|
|
|
|
|
14,076
|
|
|
|
14,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
31,305
|
|
|
|
37,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
Financial liabilities forward gold sales
|
|
|
|
|
|
|
26,496
|
|
|
|
37,388
|
|
Trade and other payables
|
|
|
|
|
|
|
62,088
|
|
|
|
48,110
|
|
Current tax payable
|
|
|
|
|
|
|
4,801
|
|
|
|
9,190
|
|
Current portion of long term borrowings
|
|
|
|
|
|
|
898
|
|
|
|
1,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
|
|
|
|
94,283
|
|
|
|
96,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
|
|
|
|
|
|
857,959
|
|
|
|
821,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form part of these condensed consolidated
interim financial statements.
F-3
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Attributable
|
|
Non-
|
|
|
|
|
Ordinary
|
|
Share
|
|
Share
|
|
Other
|
|
Retained
|
|
to Owners of
|
|
Controlling
|
|
Total
|
|
|
Shares
|
|
Capital
|
|
Premium
|
|
Reserves
|
|
Earnings
|
|
the Parent
|
|
Interests
|
|
Equity
|
|
|
(US$ in thousands unless otherwise noted)
|
|
Balance at Dec. 31, 2007
|
|
|
76,140,330
|
|
|
|
3,809
|
|
|
|
450,814
|
|
|
|
(69,391
|
)
|
|
|
213,567
|
|
|
|
598,799
|
|
|
|
8,294
|
|
|
|
607,093
|
|
Movement on cash flow hedges Transfer to income
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,021
|
|
|
|
|
|
|
|
17,021
|
|
|
|
|
|
|
|
17,021
|
|
Fair value movement on financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,477
|
)
|
|
|
|
|
|
|
(16,477
|
)
|
|
|
|
|
|
|
(16,477
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,877
|
|
|
|
33,877
|
|
|
|
4,514
|
|
|
|
38,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
544
|
|
|
|
33,877
|
|
|
|
34,421
|
|
|
|
4,514
|
|
|
|
38,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,734
|
|
|
|
|
|
|
|
2,734
|
|
|
|
|
|
|
|
2,734
|
|
Share options exercised
|
|
|
83,000
|
|
|
|
4
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
1,004
|
|
|
|
|
|
|
|
1,004
|
|
Exercise of options previously expensed under IFRS 2
|
|
|
|
|
|
|
|
|
|
|
313
|
|
|
|
(313
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares vested#
|
|
|
6,594
|
|
|
|
|
|
|
|
160
|
|
|
|
(160
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend relating to 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,154
|
)
|
|
|
(9,154
|
)
|
|
|
|
|
|
|
(9,154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2008
|
|
|
76,229,924
|
|
|
|
3,813
|
|
|
|
452,287
|
|
|
|
(66,586
|
)
|
|
|
238,290
|
|
|
|
627,804
|
|
|
|
12,808
|
|
|
|
640,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at Dec. 31, 2008
|
|
|
76,500,324
|
|
|
|
3,827
|
|
|
|
455,974
|
|
|
|
(31,387
|
)
|
|
|
245,982
|
|
|
|
674,396
|
|
|
|
13,745
|
|
|
|
688,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movement on cash flow hedges Transfer to income
statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,386
|
|
|
|
|
|
|
|
21,386
|
|
|
|
|
|
|
|
21,386
|
|
Fair value movement on financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,605
|
)
|
|
|
|
|
|
|
(6,605
|
)
|
|
|
|
|
|
|
(6,605
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,998
|
|
|
|
25,998
|
|
|
|
6,018
|
|
|
|
32,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,781
|
|
|
|
25,998
|
|
|
|
40,779
|
|
|
|
6,018
|
|
|
|
46,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,708
|
|
|
|
|
|
|
|
4,708
|
|
|
|
|
|
|
|
4,708
|
|
Share options exercised
|
|
|
272,400
|
|
|
|
14
|
|
|
|
2,678
|
|
|
|
|
|
|
|
|
|
|
|
2,692
|
|
|
|
|
|
|
|
2,692
|
|
Exercise of options previously expensed under IFRS 2
|
|
|
|
|
|
|
|
|
|
|
916
|
|
|
|
(916
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares vested#
|
|
|
7,454
|
|
|
|
|
|
|
|
261
|
|
|
|
(261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend relating to 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,967
|
)
|
|
|
(9,967
|
)
|
|
|
|
|
|
|
(9,967
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2009
|
|
|
76,780,178
|
|
|
|
3,841
|
|
|
|
459,829
|
|
|
|
(13,075
|
)
|
|
|
262,013
|
|
|
|
712,608
|
|
|
|
19,763
|
|
|
|
732,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# |
|
Restricted shares were issued to directors as remuneration.
The transfer between other reserves and share
premium in respect of the shares vested represents the
cost calculated in accordance with IFRS 2. |
|
|
|
Other reserves include the cumulative charge recognized under
IFRS2 in respect of share option schemes (net of amounts
transferred to share capital and share premium) and the
mark-to-market valuation of derivative financial instruments
designated as cash flow hedges. |
The accompanying notes form part of these condensed consolidated
interim financial statements.
F-4
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Six Months
|
|
|
Ended
|
|
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2009
|
|
2008
|
|
|
(US$ in thousands unless otherwise noted)
|
|
Profit for the period
|
|
|
32,016
|
|
|
|
38,391
|
|
Income tax expense
|
|
|
10,679
|
|
|
|
13,860
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax
|
|
|
42,695
|
|
|
|
52,251
|
|
Adjustment for non-cash items
|
|
|
21,679
|
|
|
|
14,303
|
|
Effects of changes in operating working capital items
|
|
|
(13,071
|
)
|
|
|
(33,052
|
)
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(14,815
|
)
|
|
|
(2,754
|
)
|
Inventories and ore stockpiles
|
|
|
(2,618
|
)
|
|
|
(17,633
|
)
|
Trade and other payables
|
|
|
4,362
|
|
|
|
(12,665
|
)
|
|
|
|
|
|
|
|
|
|
Income tax paid
|
|
|
(5,450
|
)
|
|
|
(5,169
|
)
|
|
|
|
|
|
|
|
|
|
Net cash generated from operating activities
|
|
|
45,853
|
|
|
|
28,333
|
|
|
|
|
|
|
|
|
|
|
Net cash used by investing activities
|
|
|
(75,015
|
)
|
|
|
(37,654
|
)
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
(75,015
|
)
|
|
|
(37,654
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used by financing activities
|
|
|
(8,482
|
)
|
|
|
(9,537
|
)
|
|
|
|
|
|
|
|
|
|
Ordinary shares issued
|
|
|
2,692
|
|
|
|
1,004
|
|
Long term loans repaid
|
|
|
(1,207
|
)
|
|
|
(1,387
|
)
|
Dividends paid
|
|
|
(9,967
|
)
|
|
|
(9,154
|
)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
(37,644
|
)
|
|
|
(18,858
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
257,631
|
|
|
|
294,183
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
219,987
|
|
|
|
275,325
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form part of these condensed consolidated
interim financial statements.
F-5