Africa-focused gold miner Randgold Resources has hit back at claims made by its joint venture partner in the Democratic Republic of Congo that it did not make the correct representations ahead of its merger with Barrick Gold.
On Friday, state-owned Société de Miniere de Kilo-Moto (Sokimo) said it had not been consulted about the all stock deal, which it claimed would introduce a new partner into the Kibali gold project. It promised to “assert its rights”.
In a statement Randgold said its tie up with Canada’s Barrick would have no effect on the project, which produced almost 600,000 ounces of gold in 2017.
“There are no provisions in the joint venture agreement and the related documentation which give Sokimo any rights resulting from the proposed merger,” Randgold said.
Randgold added that it has consulted extensively with Sokimo at board and executive levels in the days following the announcement of the proposed merger with Barrick, as well as with the Minister of Mines and other interested parties regarding the proposed transaction.
“Sounds like another bout of rent-grabbing by a DRC state-owned entity,” said analysts at Investec Securities. “However, given that this is a nil-premium equity transaction between two companies, there can be little analogy to Freeport’s exit from the DRC through the sale of Tenke Fungurume to China Moly for $2.7bn cash, which eventually resulted in another SOE, Gecamines, receiving $100m.”
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