Barrick Gold Corporation (NYSE:ABX) (TSX:ABX) today announced that it has reached agreement on the terms of a recommended share-for-share merger of Barrick and Randgold Resources Limited.

The Merger will create an industry-leading gold company with the greatest concentration of Tier One Gold Assets¹ in the industry, led by a proven management team of owners. Superior operating metrics, including the highest Adjusted EBITDA margin² and the lowest total cash cost³ position among Senior Gold Peers⁴, will support sustainable investment in growth and shareholder returns.

The Merger is subject to approval by both sets of shareholders, regulatory approvals and other customary closing conditions.

It is intended that the Merger will be implemented by means of a court-sanctioned scheme of arrangement of Randgold Resources Limited and the Randgold Shareholders under Article 125 of the Companies (Jersey) Law 1991, with the entire issued and to be issued share capital of Randgold being acquired by Barrick. Under the terms of the Merger, each Randgold Shareholder will receive 6.1280 New Barrick Shares for each Randgold Share. Following completion of the Merger, Barrick Shareholders will own approximately 66.6 per cent and Randgold Shareholders will own approximately 33.4 per cent of the New Barrick Group on a fully-diluted basis.

Commenting on today’s announcement, John L. Thornton, Executive Chairman of Barrick, said:

“The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry, bringing together the world’s largest collection of Tier One Gold Assets, with a proven management team that has consistently delivered among the best shareholder returns in the gold sector over the past decade. Our overriding measure of success will be the returns we generate and not the number of ounces we produce, balancing boldness and prudence to deliver consistent and growing returns to our fellow owners, a truly simple but radical and achievable concept. There are no premiums in the merger because we strongly believe in the opportunity to add significant value for our shareholders from the disciplined management of our combined asset base and a focus on truly profitable growth.”

Commenting on today’s announcement, Mark Bristow, Chief Executive Officer of Randgold, said:

“Our industry has been criticised for its short-term focus, undisciplined growth and poor returns on invested capital. The merged company will be very different. Its goal will be to deliver sector leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business, and be prepared to make tough decisions. By employing a strategy similar to the one that proved very successful at Randgold, but on a larger scale, the New Barrick Group will leverage some of the world’s best mines and talent to create real value for all stakeholders.”

The Merger is expected to close by Q1 2019. Following completion of the Merger:

• John L. Thornton, Executive Chairman of Barrick, will become Executive Chairman of the New Barrick Group.
• Mark Bristow, Chief Executive Officer of Randgold, will become President and Chief Executive Officer of the New Barrick Group.  
• Graham Shuttleworth, Finance Director and Chief Financial Officer of Randgold, will become Senior Executive Vice President and Chief Financial Officer of the New Barrick Group.
• Kevin Thomson, Senior Executive Vice President, Strategic Matters of Barrick, will become Senior Executive Vice President, Strategic Matters of the New Barrick Group.
• Two-thirds of the directors of the Board of the New Barrick Group will be nominated by Barrick, and one-third will be nominated by Randgold.

Shares in the New Barrick Group issued to Randgold Shareholders will be admitted to trade on the New York Stock Exchange and the Toronto Stock Exchange, subject to the approval or acceptance of each exchange.

A Rule 2.7 announcement has been published in accordance with the City Code on Takeovers And Mergers (United Kingdom) and can be accessed at the following link:

https://www.barrick.com/files/br/Recommended-All-Share-Merger-of-Barrick-and-Randgold.pdf
or on Barrick’s SEDAR profile (www.sedar.com).

This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including its Appendices). The Merger will be subject to the Conditions and certain further terms set out in Appendix 1 and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains the sources and bases of certain information contained in this summary and the following announcement. Appendix 3 contains details of the irrevocable undertakings received by, and voting agreements entered into by, Barrick. Appendix 4 contains the definitions of certain terms used in this summary and the following announcement. Appendix 5 contains a reconciliation of certain non-GAAP financial performance measures used in this announcement.