| Thu 13 Dec 2007, 17:55 | | RNG - Randgold & Exploration Company - Limited Assurance Report Of The |
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RNG
RNG
RNG - Randgold & Exploration Company - Limited Assurance Report Of The
Independent Auditor And Renewal Of Cautionary Announcement
RANDGOLD & EXPLORATION COMPANY LIMITED
("R&E")
Incorporated in the Republic of South Africa
Registration number: 1992/005642/06
Share code: RNG & ISIN: ZAE000008819 (Suspended)
Nasdaq trading symbol: RANGY (Delisted) & ADR ticker symbol: RNG
Limited Assurance Report of the independent auditor and renewal of cautionary
announcement
NET ASSET VALUE INFORMATION
DIRECTORS` RESPONSIBILITY STATEMENT
The R&E directors are responsible for the preparation and presentation of the
Group Net Asset Value Statement of Randgold & Exploration Company Limited, at 31
March 2007 and accompanying Notes.
The Group Net Asset Value Statement has been prepared in accordance with the
basis of preparation set out in the accompanying Notes, for the purpose of
providing the shareholders with a financial update relevant to the proposed
merger between R&E and JCI Limited as was published on SENS on 15 March 2007 and
has not been prepared in accordance with IFRS or other generally accepted
accounting principles.
The R&E directors` responsibility includes determining that the basis of
preparation is an acceptable basis for preparing and presenting the Group Net
Asset Value Statement and accompanying Notes, and making accounting estimates,
which, in the opinion of the R&E directors, are reasonable in the circumstances.
KPMG, the independent auditor is responsible for reporting on whether, based on
the auditor`s procedures arising from a limited assurance engagement, the Group
Net Asset Value Statement at 31 March 2007 has been prepared, in all material
respects, in accordance with the basis of preparation set out in the
accompanying Notes to the Group Net Asset Value Statement.
Approval of the Group Net Asset Value Statement
The Group Net Asset Value Statement at 31 March 2007 and accompanying Notes were
approved by the R&E board on 13 December 2007 and are signed on its behalf by:
Peter Henry Gray Marais Steyn
Chief Executive Officer Financial director
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR TO THE SHAREHOLDERS OF
RANDGOLD & EXPLORATION COMPANY LIMITED
We have performed our limited assurance engagement on the Group Net Asset Value
Statement of Randgold & Exploration Company Limited at 31 March 2007 and
accompanying Notes.
Directors` responsibility for the Group Net Asset Value Statement
The Randgold & Exploration Company Limited directors are responsible for the
preparation and presentation of the Group Net Asset Value Statement in
accordance with the basis of preparation, set out in the Notes to the Group Net
Asset Value Statement, for the purpose of providing the shareholders with
financial information relevant to the proposed merger with JCI Limited, as
referred to in the Notes. This responsibility includes determining that the
basis of preparation is an acceptable basis for preparing and presenting the
Group Net Asset Value Statement and making accounting estimates, which, in the
opinion of the Randgold & Exploration Company Limited directors, are reasonable
in the circumstances.
Auditor`s responsibility
Our responsibility is to conclude on whether the Group Net Asset Value Statement
at 31 March 2007 has been prepared on the basis of preparation set out in the
accompanying Notes, based on the procedures performed by us in a limited
assurance engagement. There are no International Standards on Auditing
(Engagement Standards) applicable to an engagement of this nature. In these
circumstances, we applied our professional judgement in planning and performing
our procedures to obtain limited assurance on the Group Net Asset Value
Statement in accordance with the basis of preparation set out in the
accompanying Notes. Our evidence gathering procedures are more limited than for
a reasonable assurance engagement, and therefore less assurance is obtained than
in a reasonable assurance engagement. We believe that the evidence we have
obtained is sufficient and appropriate to provide a basis for our conclusion.
Summary of work performed
Our work included making enquiries of management and performing procedures to
obtain evidence in respect of the amounts and disclosures in the Group Net Asset
Value Statement in accordance with the basis of preparation set out in the
accompanying Notes. We have evaluated the appropriateness of the basis of
preparation in the circumstances and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the Group
Net Asset Value Statement.
Conclusion
Based on the procedures performed by us, nothing has come to our attention that
causes us to believe that the Group Net Asset Value Statement at 31 March 2007
has not been prepared, in all material respects, on the basis of preparation set
out in the accompanying Notes.
Restriction on use of this report
The Group Net Asset Value Statement has been prepared, in all material respects,
in accordance with the basis of preparation, set out in the accompanying Notes,
for the purpose of providing the shareholders with financial information
relevant to the proposed merger, as referred to in the Notes.
The Group Net Asset Value Statement and our limited assurance report may not be
suitable for any other purpose.
KPMG Inc
Registered Auditor
13 December 2007
Johannesburg, South Africa
GROUP NET ASSET VALUE STATEMENT
Notes Unaudited
At 31 March
2007
R `000
ASSETS
Listed Investments 3 355 071
Gold Fields 259 854
JCI 80 452
Other listed investments 14 765
Prospecting rights 296 385
Prospecting rights - GFO transaction 4 217 685
Other prospecting rights 5 78 700
Other assets 67 474
Loan receivable 6 46 374
Outstanding settlement 7 8 667
Cash and cash equivalents 8 12 433
TOTAL ASSETS 718 930
LIABILITIES
Provision for post-retirement medical 9 (34 317)
benefit obligation
Income tax payable 10 (16 912)
Deferred taxation 11 (59 370)
Trade and other payables 12 (19 284)
TOTAL LIABILITIES (129 883)
NET ASSETS 589 047
ISSUED SHARES 13 Number of
shares
Number of shares in issue 74 813 128
Shares identified for possible (2 943 087)
cancellation
Net shares in issue 71 870 041
NAV per share - Rand 8.1960
NOTES TO THE GROUP NET ASSET VALUE STATEMENT
1. PURPOSE OF THE GROUP NET ASSET VALUE STATEMENT
On 31 March 2006, R&E published provisional unaudited and unreviewed financial
results for the years ended 31 December 2004 and 2005, and restated provisional
results for the year ended 31 December 2003 ("provisional results").
In the accompanying commentary to these provisional results, the R&E directors
indicated, inter alia, that due to the extent of the misappropriations, for
which details were included in the commentary, there may be other material
events and circumstances of which the R&E directors are not aware and which may
have a material effect on R&E. These may affect the completeness and accuracy of
the information reflected in the provisional results and/or may have the effect
that the provisional results do not reflect a true and complete account of the
financial and other affairs of R&E. In these circumstances the R&E directors
disclaimed any liability in respect of the accuracy, correctness and/or
completeness of the information reflected in the provisional results. This is
still the position.
KPMG Inc. was appointed the independent auditor of R&E during October 2005. In
view of the uncertainties relating to the provisional results and the disclaimer
by the R&E directors, they were unable to, and did not, express an audit or
review opinion on the provisional results. This is still the position.
On 15 March 2007, R&E and JCI published an update to shareholders on the
proposed settlement and/or merger negotiations between R&E and JCI which
included a Group Net Asset Value Statement, and subsequently on 23 April 2007,
R&E and JCI announced their intention to merge. Because the R&E directors are
still unable to prepare a complete set of financial statements for the years
ended 31 December 2004, 2005 and 2006, in accordance with IFRS, the R&E
directors have prepared a Group Net Asset Value Statement, on the basis set out
in note 2. The R&E directors consider the Group Net Asset Value Statement,
including the accompanying Notes, suitable in the circumstances for the purpose
of providing its shareholders with financial information relevant to the
proposed merger.
2. BASIS OF PREPARATION
The Group Net Asset Value Statement has been prepared from information available
to the R&E directors and may not be complete for the reasons given in note 1
above. In particular, the Group Net Asset Value Statement excludes major claims
and counter claims between the R&E Group and the JCI Group.
Except for these claims, the Group Net Asset Value Statement includes all known
significant assets and liabilities of R&E, its subsidiaries other than FSD, a
55.11% subsidiary of R&E, and a proportionate share of FSD`s assets and
liabilities on a line by line basis.
The Group Net Asset Value Statement has been prepared in Rand. All financial
information presented in Rand has been rounded to the nearest thousand.
The Group Net Asset Value Statement required the R&E directors to make
judgements, estimates and assumptions that affect the basis of preparation and
the reported amounts of assets and liabilities. Actual results may differ from
these estimates.
The Group Net Asset Value Statement has been prepared on a basis discussed
under each heading below:
2.1 Listed investments
The Group`s listed investments, except for the investment in JCI, are based on
the VWAP for March 2007 comprising 21 trading days.
The value of the JCI investment is based on the Net Asset Value per share of JCI
at 31 March 2007 which is based on the amount disclosed in the JCI Group Net
Asset Value Statement, published on the same date as this statement. The JCI
value is adjusted to reflect the proposed merger ratio of 95 to 1, as was
announced on 23 April 2007.
R&E has accounted for all listed investments under its control and in its
possession at 31 March 2007.
2.2 Prospecting rights
Where an agreement has been signed to sell prospecting rights as of the date of
approval of the Group Net Asset Value Statement, the value is based on the
consideration in the relative agreement.
Where no such agreements are in place, the R&E directors have determined a value
which they believe is reasonable based on calculations from independent mineral
project evaluation experts. For such calculations, independent mineral project
evaluation experts were used to conduct and conclude on the mineralisation which
was valued using comparable transactions.
2.3 Other assets
Other assets include a loan receivable, a payment under settlement agreement and
cash and cash equivalents.
2.3.1 Loan receivable
The value of the loan receivable is based on current recoverability supported by
a signed loan certificate.
2.3.2 Payment under settlement agreement
The value of the payment under settlement agreement is based on the amount
recovered subsequent to 31 March 2007.
2.3.3 Cash and cash equivalents
Cash and cash equivalents comprises cash and cash deposits with banking
institutions. The carrying amount of cash and cash deposits with banking
institutions approximates fair value.
2.4 Provision for post retirement medical benefit obligation
The provision for the post retirement medical benefit obligation represents the
present value of the estimated future cash outflows resulting from employees`
services provided.
The Projected Unit Credit Method is used to determine the present value of the
defined benefit obligation. An independent actuarial valuation was conducted.
2.5 Taxation
2.5.1 Income tax payable
Income tax payable comprises taxation payable, calculated on the basis of the
expected taxable income, using the tax rates enacted or substantively enacted at
the reporting date, and any adjustment of income tax payable for previous years.
Income tax payable has been calculated based on the best information currently
available to management regarding taxable income (including prior year
assessments and management`s interpretation of current tax law) given the
circumstances detailed in note 1 above.
2.5.2 Deferred taxation
Deferred taxation is provided based on temporary differences. Temporary
differences are differences between the carrying amounts of assets and
liabilities reported in the Group Net Asset Value Statement and their tax base.
The amount of deferred taxation provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities using
tax rates enacted or substantively enacted at the reporting date.
A deferred taxation asset is recognised only to the extent that it is probable
that future taxable profits will be available against which the associated
unused tax losses, unredeemed capital expenditure and deductible temporary
differences can be utilised. Deferred taxation assets are reduced to the extent
that it is no longer probable that the related tax benefit will be realised.
2.6 Trade and other payables
Trade and other payables include accruals and other amounts payable based on
management`s best estimate at the reporting date.
2.7 Contingent assets
Contingent assets are disclosed when it is probable that they will be realised
and are best estimates expected to be recovered. No contingent assets have been
included in the Group Net Asset Value Statement as the recoverability cannot be
reasonably assured.
3. Listed investments
Notes Number of Value per Value
shares share R`000
R
Gold Fields 2 028 684 128.0900 259 854
JCI 3.1 265 935 854 0.3025 80 452
Other listed investments 14 765
Kelgran 2 324 830 0.1408 327
Pan Palladium 3.2 18 100 000 0.7977 14 438
355 071
The value of listed investments, except for the investment in JCI (currently
suspended on the JSE), is based on the VWAP for March 2007 comprising 21
trading days.
3.1 The value of the JCI investment is based on the Net Asset Value per JCI
share at 31 March 2007 which is disclosed in the JCI Group Net Asset Value
Statement, published on the same date as this statement. The JCI value is
adjusted to reflect the proposed merger ratio of 95 to 1, as was announced
on 23 April 2007.
3.2 The Pan Palladium shares were sold subsequent to 31 March 2007 for
AU$0.165 per share realising net proceeds of AU$2 976 047 (equating to R18
162 816).
4. Prospecting rights - GFO transaction R`000
R&E`s share of the prospecting rights in respect of the GFO 217 685
transaction
R&E and JCI, and certain of their subsidiaries reached agreement with GFO,
in terms of which the R&E Group and the JCI Group relinquished their rights
in favour of GFO for a collective purchase consideration of R395 million
(excluding VAT). On 31 October 2007, R&E shareholders voted unanimously in
favour of the transaction. Upon conclusion of the transaction, R&E, through
its 55.11% shareholding in FSD, is entitled to the amount indicated above.
5. Other prospecting rights R`000
R&E`s share of new order prospecting rights held by FSD 78 700
For further details, refer to note 14.1.
6. Loan receivable R`000
R&E`s share of the JCI Gold loan 46 374
For further details, refer to note 14.2.
7. Payment under settlement agreement R`000
Kebble 8 667
On 1 October 2006, R&E concluded a settlement agreement with Kebble. The
settlement amount of R30 million payable by Kebble to R&E, was to be repaid
in monthly installments with effect from November 2006 to January 2008. As
at 31 March 2007, an amount of R19.2 million was owing to R&E in terms of
the settlement agreement. A payment of R8.7 million was received under the
settlement agreement between April and July 2007.
In August 2007, Kebble notified R&E that due to an alleged dispute in
respect of an amount purportedly owed to him on account of services
allegedly rendered by Kebble to R&E, he would not make any further payments
under the settlement agreement.
As a consequence, Kebble failed to make payment of further installments due
by him under the settlement agreement subsequent to July 2007.
R&E construed the actions of Kebble to amount to a repudiation of the
settlement agreement and on 6 November 2007, cancelled the said agreement.
The recoverability of further amounts from Kebble is uncertain and is
dependant on future action which may be taken against Kebble by R&E. No
further amounts are thus included in the Group Net Asset Value Statement.
8. Cash and cash equivalents R`000
Cash and cash deposits 12 433
9. Provision for post retirement medical benefit obligation R`000
Obligation (34 317)
A valuation of this obligation was performed by independent actuaries at 31
March 2007.
10. Income tax payable R`000
South African normal tax (16 912)
Attributable to:
R&E Group (excluding FSD) (11 968)
FSD (4 944)
(16 912)
This amount includes income tax payable calculated by management for the R&E
Group and includes any related penalties, except as noted in the next
paragraph, and interest that may be due.
Income tax payable does not include any additional penalties that may become
leviable upon assessment of outstanding returns by SARS as management
believes, that the Company did not act fraudulently or in any other way to
warrant incurring such additional penalties. Based on the ongoing
negotiations with SARS, management believes that the penalties and interest
calculated is sufficient and that no further penalties will be levied by
SARS.
R&E`s calculations reflect that R&E had no taxable income from 2002 to the
reporting date as R&E was operating at a loss. SARS has, however, queried
R&E`s tax calculations from 1998 to 2001 and have subsequently recalculated
that an amount of R39 million (including penalties and interest up to
December 2006) in taxes is payable. R&E has contested these queries and
management believes that the amount is not payable and therefore no
liability for this amount has been raised.
11. Deferred taxation R`000
Unrealised (28 620)
Deferred taxation arising on listed investments at 14.5% (5 805)
Deferred taxation arising on other prospecting rights at 29% (22 815)
Realised (30 750)
Deferred taxation arising on the GFO transaction at 14.5% (29 978)
Deferred taxation arising on the GFO transaction at 29% (772)
(59 370)
The deferred taxation balance comprises temporary differences on listed
investments and prospecting rights.
No deferred taxation assets were raised on the post retirement medical
benefit obligation and assessed losses of the R&E Group as it is not
probable that future taxable profits will be available to utilise the
assessed losses or when the related deductible temporary differences are
expected to reverse.
12. Trade and other payables R`000
Trade and other payables (2 848)
PAYE payable (13 528)
VAT payable (2 908)
(19 284)
PAYE
payable
R&E engaged independent tax advisors who completed a PAYE audit and
determined the amount payable, including penalties and interest thereon.
Their report was submitted to SARS and R&E awaits their response.
VAT
payable
R&E engaged independent tax advisors who completed a VAT audit and
determined the VAT payable, excluding penalties and interest thereon.
Management added penalties and interest to the VAT payable. The penalties
calculated by management, however, excluded the 200% section 60 VAT penalty
as defined in the VAT Act, as R&E believe they did not act fraudulently. The
report of the independent tax advisors has been submitted to SARS, and R&E
awaits their response.
13. Issued shares
For the purpose of calculating the net shares in issue, the total number of
shares in issue of R&E (issued share capital) has been notionally reduced by
approximately 3 million R&E shares.
R&E has identified 2 943 087 R&E shares for possible cancellation in its
issued share capital (which shares constitute a portion of the consideration
shares purportedly issued and allotted on account of the Phikoloso
transaction in respect of which R&E has asserted a claim against JCI), on
the basis that such shares are alleged to have been issued for no value
received.
The said shares have been identified to be in the possession of Letseng
Diamonds. R&E have been informed by JCI that the shares in question were
pledged by JCI to Letseng Diamonds, as security for a loan made by Letseng
Diamonds to JCI.
R&E has been further informed by JCI that upon the repayment of the loan by
JCI to Letseng Diamonds, the shares will be returned to JCI, whereupon JCI
has undertaken to return such shares to R&E for cancellation. R&E has noted
JCI`s intention to do so, without prejudice to its rights.
14. FSD`s Net Asset Value
Notes R&E`s 100%
Proportiona Unaudited
te share 31 March 2007
Unaudited R`000
31 March
2007
R`000
ASSETS
Prospecting rights in respect 4 217 685 395 000
of the GFO transaction
Other prospecting rights 14.1 78 700 142 806
Loan receivable 14.2 46 374 84 148
Total assets 342 759 621 954
LIABILITIES
Income tax payable (4 944) (8 972)
Deferred taxation (53 565) (97 197)
Total liabilities (58 509) (106 169)
Net assets 284 250 515 785
R&E`s proportionate share (equating to 55.11%) of FSD`s Net Asset
Value was included in the applicable line items of the Group Net
Asset Value Statement. FSD`s net asset value has been prepared on
a basis consistent with that of R&E.
14.1 Other prospecting rights
R&E is the beneficial owner of various prospecting rights held
through its 55.11% shareholding in the issued share capital of
FSD. Various prospecting rights, mainly flowing from the
historical old order mineral rights portfolio of FSD and its
subsidiaries, have either been applied for or awarded by the DME.
The Du Preez Leger Project, which has been granted and executed,
has not yet been registered in the name of FSD.
The prospecting rights adjacent to St Helena, namely Du Preez
Leger 423/Jonkersrus 72, have a gold resource of 22 million tonnes
at 6.7 g/t at a pay limited of 5.6 g/t. The prospecting right
adjacent to the Harmony mine, namely on Vermeulenskraal 223 has a
gold resource on the Basal reef of 6.3 million tonnes at 10.07 g/t
at a pay limited of 5.6 g/t. This information is quoted from
historic evaluations concluded in the 1980`s and the definitions
of resources and reserves would not be exactly the same as those
currently accepted by SAMREC, JORC and the NI 43-101 codes.
Considering various transactions that have been quoted publicly,
and noting differences between the nature of the Du Preez Leger
project and Vermeulenskraal`s gold deposits and the transactions
quoted, a value of US$4 per ounce was applied for the purposes of
valuing the project. This value was derived after applying a 35%
discount factor on the average US$ per ounce rate of similar
transactions. The discount factor was applied due to the fact that
a detailed assessment of the Du Preez Leger project and
Vermeulenskraal has not been conducted, other than the historic
valuations concluded in the 1980`s, as well as the fact that the
projects may not be viable as stand-alone projects at this point
in time.
On this basis, the projects have been valued as follows:
Tonnes g/t moz US$/oz US$` R`000 R`000
(m`s) 000 at R7.36 after
BEE
dilution(1)
Du Preez 22.00 6.70 4.5785 4.00 18 314 134 792 99 747
Leger 423/
Jonkersrus 72
Vermeulenskra 6.30 10.07 1.9765 4.00 7 906 58 188 43 059
al 223
Total - Du 6.555 26 220 192 980 142 806
Preez Leger
Project
(1) The value of other prospecting rights has been calculated on the basis
that 26% thereof will be attributable in terms of the BEE Act.
14.2 Loan receivable
FSD has a loan receivable from JCI Gold for R84 million. The R&E board
believes that this amount is fully recoverable from JCI Gold. This loan is
accounted for as a loan payable in the Group Net Asset Value Statement of
JCI at 31 March 2007. The loan is unsecured, bears interest at the bank
prime lending rate and no formal terms of repayment have been established.
15. Contingent assets - Claims against third parties (excluding the JCI
Group)
R&E has identified various claims against third parties which are in the
process of being formulated and are expected in due course to be
finalised. Such claims could be substantial, although there is no
guarantee that such claims will result in awards being granted in favour
of R&E or for that matter that R&E will be able to make successful
recoveries in respect thereof. It is premature at this stage, to disclose
the claim values, breakdowns thereof and identities of the persons against
whom such claims are expected to be made and any other related details
concerning such claims, given that such claims have not yet been finalised
and disclosing the details thereof, may adversely impact upon the
recoverability of these claims.
16. Encumbrances
No significant assets have been encumbered or pledged.
FURTHER RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue to exercise caution when trading in
their shares over-the-counter until further announcements are made.
GLOSSARY OF TERMS
"AU$" Australian dollar, the unit currency in Australia;
"BEE" Black Economic Empowerment Act 53 of 2003;
"CGT" Capital Gains Tax is defined within the Eighth Schedule
of the Income Tax Act No.58 of 1962 (as amended) and
applies to the taxation of the disposal of certain
capital items (assets) which generate either capital
gains or losses;
"contiguous collectively and severally the Kalbasfontein rights,
rights" the WA4 rights, the Cardoville rights and the
Wildebeestkuil rights as detailed in the R&E circular
to shareholders issued on 15 October 2007;
"Doornrivier" Doornrivier Minerals Limited (registration number
1950/039144/06), a public company incorporated in South
Africa, and a wholly owned subsidiary of R&E;
"DME" the Department of Minerals and Energy;
"Du Preez Leger the Du Preez Leger Project is a project encompassing
Project" the farms Du Preez Leger 324, Jonkersrus 72, Milo 639,
Rebelkop 456, Tweepan 678 and Vermeulenskraal 223
located in the district of Virginia in the Free State
Province;
"FSD" Free State Development and Investment Corporation
Limited (registration number 1944/016931/06), a public
company incorporated in South Africa, jointly held by
JCI and R&E;
"GFO" Gold Fields Operations Limited (formerly Western Areas
Limited) (registration number 1959/003209/06), a public
company incorporated in South Africa, and a wholly
owned subsidiary of Gold Fields;
"GFO transaction" the relinquishment by R&E and Goldridge (a subsidiary
of R&E) of rights contiguous to the South Deep gold
mine to GFO, details of which are included in the
circular to R&E shareholders issued on 15 October 2007;
"Gold Fields" Gold Fields Limited (registration number
1968/004880/06), a public company incorporated in South
Africa, the shares of which are listed on the JSE, and
the New York Stock Exchange;
"Goldridge" Goldridge Gold Mining Company (Proprietary) Limited
(registration number 1974/003333/07) a private company
incorporated in South Africa;
"Group" or "R&E R&E and its subsidiaries;
Group"
"g/t" grams of gold per tonne;
"Harmony" Harmony Gold Mining Company Limited (registration
number 1950/038232), a public company incorporated in
South A/06frica, the shares of which are listed on the
JSE, the New York Stock Exchange and the NASDAQ Stock
Market;
"Income Tax" Income Tax levied in terms of the Income Tax Act;
"Income Tax Act" the Income Tax Act 1962 (Act 58 of 1962), as amended;
"IFRS" International Financial Reporting Standards as adopted
by the International Accounting Standards Board;
"JCI" JCI Limited (Registration number 1894/000854/06), a
public company incorporated in South Africa, the shares
of which is listed on the JSE but which are currently
suspended;
"JCI Gold" JCI Gold Limited (registration number 1998/005215/06),
a public company incorporated in South Africa, being a
wholly-owned subsidiary of JCI and a shareholder in
FSD;
"JCI Group" JCI and its subsidiaries;
"JCI Group Net the JCI Group Net Asset Value Statement published on
Asset Value the same date as the R&E Group Net Asset Value
Statement" Statement;
"JCI shares" ordinary shares of 1 cent each in the issued share
capital of JCI;
"JORC" the Australasian Joint Ore Reserves Committee, based in
Australia have developed an internationally accepted
code for defining ore "resources" and "reserves";
"JSE" JSE Limited (registration number 2005/022939/06) a
public company incorporated in South Africa, which is
licensed as an exchange under the Securities Services
Act;
"Kebble" Roger Ainsley Ralph Kebble;
"Kelgran" Kelgran Limited (registration number 1975/004595/06), a
public company incorporated in South Africa, the shares
of which are listed on the JSE but which are currently
suspended;
"KPMG" KPMG Inc (registration number 1999/021543/21), a public
company incorporated in South Africa;
"Letseng Diamonds" Letseng Diamonds Limited (Guernsey), a company
incorporated in Guernsey under registration number
31750;
"mediators" Advocate SF Burger SC, Professor H Wainer, CA(SA) and
Mr C Nupen, appointed in terms of the mediation
agreement;
"Moz" million ounces;
"mt" million tonnes or tons;
"NI 43-101" the standard for the reporting of minerals by competent
persons established in Canada;
"oz" ounces (troy);
"Pan Palladium" Pan Palladium Limited (registration number ALN 093 178
388), a public company incorporated in Australia, the
shares of which are listed on the Australian Exchange;
"PAYE" Pay As You Earn and Site (Standard Income Tax on
Employees) falls within the Fourth Schedule of the
Income Tax Act No. 58 of 1962 (as amended) and is a
withholding tax deducted from the employee`s
remuneration. The Fourth Schedule defines remuneration
earned from amongst other income, employment and the
corresponding tax liabilities to be deducted from the
employee termed `Site` and Paye` whilst the Seventh
Schedule of the Act applies to certain fringe benefits
derived from employment and the subsequent Paye
liability deductions where applicable;
"Phikoloso the transaction pursuant to which R&E, Equitant Trading
transaction" (Pty) Limited and Phikoloso Mining (Pty) Limited
concluded a written agreement on 28 July 2003 (in terms
whereof Equitant Trading (Pty) Limited sold to R&E the
sale shares and claims as defined therein and R&E paid
the purchase price therefore by way of the issue of 8.8
million new R&E shares, equivalent to approximately
19.7% of R&E`s issued share capital). Subsequently
updated information regarding this transaction was
published and included in a summary of forensic
findings on SENS on 13 June 2006;
"proposed merger" the announcement published jointly by R&E and JCI on
SENS dated 23 April 2007, incorporating details of the
proposed merger of both companies;
"Rand" or "R" the South African Rand, the unit of currency in South
Africa;
"R&E" Randgold & Exploration Company Limited (registration
number 1992/005642/06), a public company incorporated
in South Africa, the shares of which are listed on the
JSE but which are currently suspended;
"R&E directors" or the current board of directors of R&E, being the
"R&E board" reconstituted directors appointed on 24 August 2005 and
subsequent changes;
"R&E shares" or ordinary shares of 1 cent each in the issued share
"shares" capital of R&E;
"SAMREC Code" South African code for reporting of mineral resources
and mineral reserves;
"SARS" the South African Revenue Services is a division of the
government that collects revenue and regulates all
forms of tax payable by South African tax payers. SARS
refers to the Income Tax Act No.58 of 1962 (as amended)
for these collections and regulations;
"Securities the Securities Services Act, 2004, (Act 36 of 2004) as
Services Act" amended;
"SENS" Securities Exchange News Service of the JSE;
"shareholders" holders of R&E shares;
"South Africa" the Republic of South Africa;
"South Deep" South Deep (a gold mine), situated in the Magesterial
District of Westonia and Vanderbijlpark (Gauteng
Province), owned by Gold Fields;
"St Helena" St Helena Gold Mines Limited is a company registered in
South Africa (Registration Number 1905/020743/06) and
located within the Free State Province of South Africa.
Its main business is the mining of gold within the Free
State province;
"US$" the United States Dollar, the unit of currency in the
United States of America;
"VWAP" volume weighted average price on the JSE;
"VAT" Value Added Tax falls within the Value Added Tax Act
No.89 of 1999. VAT is a form of indirect taxation
imposed on the value of all goods and services supplied
by vendors (vendors are any persons who are required to
register for Vat per the Act). The current rate of VAT
levied is 14%;
"VAT Act" the Value-Added Tax Act, 1991, as amended;
Company Secretary and registered Sponsor
office
Mr R P Pearcey, FCIS, FCIMA Sasfin Capital
13th Floor a division of Sasfin Bank Limited
28 Harrison Street (Registration number 1951/002280/06)
Johannesburg, 2001 Sasfin Place
(PO Box 11165, Johannesburg, North Block
2000) 13 - 15 Scott Street
Telephone: +27 11 688 5100 Waverley, 2090
Facsimile: +27 11 492 1070 (PO Box 95104, Grant Park 2051)
Website: www.randgold.co.za Telephone: +27 11 809 7500
Facsimile: +27 11 809 7726
Registered auditor South African transfer secretaries
KPMG Inc. Computershare Investor Services 2004
(Registration number (Proprietary) Limited
1999/021543/21) (Registration number 2004/003647/07)
KPMG Crescent Ground Floor
85 Empire Road 70 Marshall Street
Parktown, 2193 Johannesburg, 2001
(Private Bag 9, Parkview, 2122) (PO Box 61051, Marshalltown 2107)
Telephone: +27 11 647 7111 Telephone: +27 861 100 634
Facsimile: +27 11 647 8000 or +27 11 370 5000
United Kingdom secretaries Communications
St James`s Corporate Services Brian Gibson Issue Management
Limited Brian Gibson
6 St James`s Place 23 Sutherland Avenue
London SW1A 1NP Craighall Park, 2196
United Kingdom (PO Box 406, Parklands, 2121)
Telephone: +44 (20) 7499 3916 Telephone: +27 11 880 1510
Facsimile: +44 (20) 7491 1989 Facsimile: +27 11 880 1392
United Kingdom registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Telephone: 0870 162 3100
(from inside the United Kingdom)
Telephone: +44 (20) 8639 3399
(from outside the United
Kingdom)
Facsimile: +44 (20) 8639 2342
FORWARD-LOOKING STATEMENT AND DISCLAIMER FOR R&E
Certain statements in this announcement, as well as oral statements that may be
made by R&E`s officers, directors or employees acting on its behalf relating to
such information, contain "forward-looking statements" within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995, specifically Section 27A
of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities
Exchange Act of 1934. All statements, other than statements of historical facts,
are "forward-looking statements". These include, without limitation, the ability
of the companies to successfully consummate a merger that is approved by the
shareholders and is acceptable to the necessary governmental authorities, the
fraud and misappropriation that are alleged to have occurred and the time
periods affected thereby; the ability of R&E to recover any misappropriated
assets and investments; the outcome of any proceedings on behalf of, or against
R&E; R&E`s ability to complete its forensic investigation and prepare audited
financial statements; the time period for completing its forensic investigation
and audited financial statements; the amount of any claims R&E is or is not able
to recover against others, including JCI, and the success of its mediation with
JCI; the likelihood and economic parameters of any merger arrangement between
JCI and R&E and the ultimate impact on R&E`s previously released financial
statements and results, assets and investments, including with respect to
Randgold Resources Limited, business, operations, economic performance,
financial condition, outlook and trading markets. Although R&E believes that the
expectations reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to be correct,
particularly in light of the extent of the alleged frauds and misappropriations
uncovered to date. Actual results could differ materially from those implied by
or set out in the forward-looking statements.
Among other factors, these include the existence of any possible unknown
liabilities, the willingness of any governmental authority to sanction any
merger; the extent, magnitude and scope of any fraud and misappropriation that
may be ultimately determined to have occurred and the time periods and facts
related there to following the completion of the forensic investigation and any
other investigations that may be commenced and the ultimate outcome of such
forensic investigation; the ability of R&E to successfully assert any claims it
may have against other parties for fraud or misappropriation of R&E assets or
otherwise and the solvency of any such parties, including JCI; the
determinations of the mediators and acceptance of any such determinations by the
shareholders of R&E and JCI; the ability of R&E to defend successfully any
counterclaims or proceedings against it; the ability of R&E and its forensic
investigators to obtain the necessary information with respect to R&E`s
transactions, assets, investments, subsidiaries and associated entities to
complete the forensic investigation and prepare audited financial statements;
the willingness and ability of R&E`s forensic investigators and auditors to
issue any final opinions with respect thereto; the ability of R&E to implement
improved systems and to correct its late reporting; the JSE Limited`s
willingness to lift its suspension of the trading of R&E`s securities on that
exchange; changes in economic and market conditions; fluctuations in commodity
prices and exchange rates; the success of any business and operating
initiatives, including any mining rights; changes in the regulatory environment
and other government actions; business and operational risk management; other
matters not yet known to R&E or not currently considered material by R&E; and
the risks identified in Item 3 of R&E`s most recent annual report on Form 20-F
filed with the SEC and its other filings and submissions with the SEC.
All forward-looking statements attributable to R&E, or persons acting on its
behalf, are qualified in their entirety by these cautionary statements. R&E
expressly disclaims any obligation to release publicly any update or revisions
to any forward-looking statements to reflect any changes in expectations, or any
change in events or circumstances on which those statements are based, unless
otherwise required by law.
This publication is not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
or an exemption from registration. Any public offering of securities to be made
in the United States will be made by means of a prospectus that may be obtained
from R&E and that will contain detailed information about the Company and
management, as well as financial statements. R&E does not intend to make any
public offering of securities in the United States or to register any part of
the present or proposed offering in the United States.
13 December 2007
Johannesburg
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 13/12/2007 17:55:52 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
