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Barrick Gold And Randgold Resources To Merge

Barrick Gold Corp. (ABX,ABX.TO) and Randgold Resources Limited (RRS.L,GOLD) said that they reached agreement on the terms of a recommended share-for-share merger of Barrick and Randgold. The New Barrick Group will operate under the branding of the Barrick Group. The Merger is expected to close by the first-quarter of 2019.

As per 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.

Based on Barrick and Randgold's Closing Prices as of 21 September 2018, the New Barrick Group will have an aggregate market capitalization of US$18.3 billion. In addition, based on the 2017 financial results for both companies, the New Barrick Group would have generated aggregate revenue of about US$9.7 billion and aggregate Adjusted EBITDA of about US$4.7 billion.

As per the terms of the Merger, Barrick and Randgold have agreed that Randgold Shareholders will be entitled to receive a Randgold dividend for the 2018 financial year of US$2.00 per Randgold Share, subject to approval of the Board of Randgold.

The Randgold Permitted Dividend is expected to be declared on or before the Effective Date, payable to Randgold Shareholders on or around the Effective Date by reference to the Scheme Record Time; and Barrick Shareholders will receive a total 2018 annualized dividend of up to US$0.14 per Barrick Share.

A Barrick quarterly dividend of: up to US$0.03 per Barrick Share will be paid for the three month period ending 30 September 2018; and up to US$0.05 per Barrick Share will be paid for the three month period ending 31 December 2018, in each case if, as and when declared by the Board of Barrick.

Following completion of the Merger, Randgold Shareholders will be entitled to receive and retain any Barrick dividends with a record date after the Effective Date. The New Barrick Group intends to grow its dividend from the Barrick level for the financial year ended 31 December 2018 over time, underpinned by stronger cash flow generation, additional overhead cost savings, asset sale proceeds and lower interest costs.

John 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 initially appointed by Barrick and one-third will be initially appointed 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. The listing of Randgold Shares on the Official List, the trading in Randgold Shares on the main market of the London Stock Exchange and the trading in Randgold ADSs on NASDAQ will be cancelled.

Barrick has agreed to pay to Randgold a break fee payment in the amount of US$300 million in certain circumstances.

It is also expected that the Barrick Special Meeting will be held on the same day as the Randgold Meetings, which will be on or around 5 November 2018. The Scheme is expected to be effective by the first-quarter of 2019, subject to the satisfaction or waiver of all relevant conditions.

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