Recommended Merger of Barrick and Randgold

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Not for release, publication or distribution, in whole or in part, in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

For immediate release

24 September 2018

RECOMMENDED ALL-SHARE MERGERofBARRICK GOLD CORPORATIONandRANDGOLD RESOURCES LIMITED

Summary

The Boards of Barrick Gold Corporation ("Barrick") and Randgold Resources Limited ("Randgold") are pleased to announce that they have reached agreement on the terms of a recommended share-for-share merger of Barrick and Randgold (the "Merger") to create an industry-leading gold company. It is intended that the Merger will be implemented by means of a court-sanctioned scheme of arrangement of Randgold 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

This exchange ratio (the "Exchange Ratio") has been agreed based on the volume-weighted average prices of Barrick Shares traded on NYSE, and Randgold ADSs traded on NASDAQ, respectively, over the 20 trading days ended on 21 September 2018 (being the last business day before this announcement).

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. 

Under 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 USD 2.00 per Randgold Share, subject to approval of the Board of Randgold (the "Randgold Permitted Dividend"). 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

· subject to the discretion of the Barrick Board with respect to the declaration of dividends, Barrick Shareholders will receive a total 2018 annualized dividend of up to USD 0.14 per Barrick Share. A Barrick quarterly dividend of: (i) up to USD 0.03 per Barrick Share will be paid for the three month period ending 30 September 2018; and (ii) up to USD 0.05 per Barrick Share (with a record date prior to the Effective Date) 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 (together, the "Barrick Permitted Dividends").

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. 

Further details of the arrangements in respect of dividends are set out in section 3 (Dividends) below.

Strategic Rationale for the Merger

The Boards of Barrick and Randgold believe that the Merger will create an industry-leading gold company with the greatest concentration of Tier One Gold Assets in the industry, the lowest total cash cost position among Senior Gold Peers,1 and a diversified asset portfolio positioned for growth in many of the world's most prolific gold districts.

Based on Barrick and Randgold's Closing Prices as of 21 September 2018 (being the last business day prior to the date of this announcement), the New Barrick Group will have an aggregate market capitalization of USD 18.3 billion. In addition, based on the 2017 financial results for both companies, the New Barrick Group would have generated aggregate revenue of approximately USD 9.7 billion and aggregate Adjusted EBITDA2 of approximately USD 4.7 billion.

The New Barrick Group will, on completion of the Merger, have the following advantages:

· Ownership of five of the world's top ten Tier One Gold Assets by total cash cost,1 with two potential Tier One Gold Assets under development or expansion:

o Tier One Gold Assets: Cortez, Goldstrike, Kibali (45%), Loulo-Gounkoto (80%) and Pueblo Viejo (60%);

o Potential to become Tier One Gold Assets: Goldrush/Fourmile and Turquoise Ridge (75%).

· The highest Adjusted EBITDA3 and highest Adjusted EBITDA margin3 and the lowest total cash cost position among Senior Gold Peers1 on a combined basis based on the 2017 financial results of both companies.

· A proven management team of owners with the ability to operate successfully in complex jurisdictions.

· Strong cash flow generation to support robust investment and ability to return cash to shareholders.

· Established partnerships with leading Chinese mining companies.

· Superior scale and the largest gold ‎reserves amongst Senior Gold Peers.

· Strong balance sheet with expected investment grade ratings.

· Ownership of a strategic Copper Business that produced 413 million pounds of copper in 2017.

· Significant re-rating potential.

Following completion of the Merger, the management team will be tasked with implementing a business plan that will focus on the following:

Asset Quality

· Grow and invest in a portfolio of Tier One Gold Assets and Strategic Assets with an emphasis on organic growth.

· Sell Non-Core Assets over time in a disciplined manner.

· Invest in exploration across extensive land positions in many of the world's most prolific gold districts.

· Maximize the long-term value of a strategic Copper Business.

Operational Excellence

· Fully implement a decentralized management ethos with a strong ownership culture.

· Streamline management and operations, and eliminate non-essential costs.

· Leverage innovation and technology to accelerate operational improvement.

· Build trust-based partnerships with host governments and local communities to drive shared long-term value.

· Strive for zero harm workplaces.

Sustainable Profitability

· Disciplined approach to growth, emphasizing a partnership strategy.

· Increased returns to shareholders driven by focus on return on capital, IRR and free cash flow per share growth.

Governance, trading and branding of the New Barrick Group

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 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.

· The New Barrick Group will operate under the branding of the Barrick Group.

Randgold Recommendation and Irrevocable Undertakings

The Board of Randgold, which has been so advised by CIBC and Barclays as to the financial terms of the Merger, considers the terms of the Merger to be fair and reasonable. In providing its advice, each of CIBC and Barclays has taken into account the commercial assessments of the directors of Randgold. Accordingly, the Board of Randgold intends to recommend to Randgold Shareholders to vote in favour of the Scheme at the Jersey Court Meeting and the resolutions to be proposed at the Extraordinary General Meeting as those directors of Randgold who hold Randgold Shares have irrevocably undertaken to do in respect of their own Randgold Shares (representing approximately 1.06 per cent. of the issued ordinary share capital of Randgold). 

Barrick Recommendation, Voting and Support Agreements and Break Payment

The issuance of New Barrick Shares under the Merger requires the Barrick Shareholder Resolution to be approved by a simple majority of the votes cast by Barrick Shareholders represented in person or by proxy at the Barrick Special Meeting.

The Board of Barrick, which has been advised by M. Klein and Co. and Morgan Stanley as to the financial terms of the Merger, considers the Exchange Ratio to be fair and reasonable. The Board of Barrick intends to recommend to Barrick Shareholders to vote in favour of the Barrick Shareholder Resolution at the Barrick Special Meeting. The directors of Barrick have agreed to vote their own Barrick Shares (representing approximately 0.238 per cent. of the Barrick Shares currently in issue) in favour of the Barrick Shareholder Resolution and the Continuance. In providing its advice, each of M. Klein and Co. and Morgan Stanley has taken into account the commercial assessments of the directors of Barrick. 

Barrick has agreed to pay to Randgold a break fee payment in the amount of USD 300 million in certain circumstances, as agreed in the Cooperation Agreement and described further in paragraph 14 below.

General

It is intended that the Merger will be implemented by means of a court-sanctioned scheme of arrangement of Randgold and the Randgold Shareholders under Article 125 of the Companies (Jersey) Law 1991. However, Barrick reserves the right, with the consent of the Panel and subject to the terms of the Cooperation Agreement, to implement the Merger by way of a takeover offer (as defined in Article 116 of the Companies (Jersey) Law 1991), in accordance with the terms of the Cooperation Agreement. 

The Merger will be conditional on, among other things: (i) the requisite approvals of the Randgold Shareholders for the Scheme and the Merger; (ii) the requisite approval of the Barrick Shareholders for the Barrick Shareholder Resolution at the Barrick Special Meeting; (iii) relevant regulatory clearances being received and other conditions satisfied; and (iv) the Jersey Court sanctioning the Scheme and the Merger becoming effective, no later than the Longstop Date.

It is expected that the Scheme Document, containing further information about the Merger and notices of the Jersey Court Meeting and Extraordinary General Meeting, together with the Forms of Proxy, will be mailed to Randgold Shareholders and (for information only) participants in the Randgold Share Plans as soon as practicable. 

It is expected that the Barrick Information Circular, containing further information about the Merger and notice of the Barrick Special Meeting, will be mailed to Barrick Shareholders at or around the same time as the Scheme Document. 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 Q1 2019, subject to the satisfaction or waiver of all relevant conditions.

Comments

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."

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 Barrick and voting and support agreements entered into by the directors of Barrick with Randgold.  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 to the most directly comparable measure under IFRS. 

Joint Analyst and Investor Webcast and Conference Call

Two analyst and investor conference calls to discuss the Merger will be held on Monday 24 September 2018. The first will start at 1.00 a.m. (Mountain Daylight Time) / 3.00 a.m. (Eastern Standard Time) / 8.00 a.m. (British Summer Time). The second will start at 10.00 a.m. (Mountain Daylight Time) / 12.00 p.m. (Eastern Standard Time) / 5.00 p.m. (British Summer Time).

To participate in the conference calls, use the following dial-in numbers and conference IDs, or join the webcasts using the links below:

1.00 a.m. MDT / 3.00 a.m. EST / 8.00 a.m. BST

U.S. and Canada: +1 (888) 240 9284

International: +1 (323) 794 2084

Conference ID: 454952

Webcast URL: https://webcast.merchantcantoscdn.com/webcaster/dyn/4000/7464/16531/107449/Lobby/default.htm

10.00 a.m. MDT / 12.00 p.m. EST / 5.00 p.m. BST

U.S. and Canada: +1 (800) 230 1085

International: +1 (612) 332 0107

Conference ID: 454839

Webcast URL: https://streams.merchantcantos.com/BarrickRandgold

Enquiries

Davies Ward Phillips & Vineberg LLP, Freshfields Bruckhaus Deringer LLP, Cravath, Swaine & Moore LLP and Carey Olsen are retained as legal advisers for Barrick.

Norton Rose Fulbright LLP, Norton Rose Fulbright US LLP, Stikeman Elliott LLP and Ogier are retained as legal advisers for Randgold.

Further information

This announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Merger or otherwise, nor shall there be any sale, issuance or transfer of securities of Randgold in any jurisdiction in contravention of applicable law. Subject to the right of Barrick to implement the Merger by way of a Takeover Offer in accordance with the terms of the Cooperation Agreement, the Merger will be implemented solely by means of the Scheme Document, which will contain the full terms and conditions of the Merger including details of how to vote in respect of the Merger. Barrick will prepare the Barrick Information Circular to be distributed to Barrick Shareholders, containing details of the Merger, notice of the Barrick Special Meeting and information on the New Barrick Shares. Barrick and Randgold urge Randgold Shareholders to read the Scheme Document carefully when it becomes available, because it will contain important information in relation to the Merger and the New Barrick Shares. Barrick also urges Barrick Shareholders to read the Barrick Information Circular carefully when it becomes available because it will contain important information in relation to the Merger and the New Barrick Shares.

Any vote in respect of resolutions to be proposed at the Randgold Meetings to approve the Merger, the Scheme or related matters, or other responses in relation to the Merger, should be made only on the basis of the information contained in the Scheme Document. Similarly, any vote in respect of resolutions to be proposed at the Barrick Special Meeting to approve the issuance of New Barrick Shares under the Merger should be made only on the basis of the information contained in the Barrick Information Circular.

Please be aware that addresses, electronic addresses and certain other information provided by Randgold Shareholders, persons with information rights and other relevant persons for the receipt of communications from Randgold may be provided to Barrick during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c).

M. Klein and Co., which is authorized by the U.S. Securities & Exchange Commission and regulated in the United States by the Financial Industry Regulatory Authority ("FINRA") and the U.S. Securities & Exchange Commission, is acting exclusively for Barrick and no one else in connection with the Merger and will not be responsible to anyone other than Barrick for providing the protections afforded to clients of M. Klein and Co. or for providing advice in relation to the Merger or any other matter referred to in this announcement. Neither M. Klein and Co. nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of M. Klein and Co. in connection with any matter referred to in this announcement or otherwise.

Morgan Stanley, which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the FCA and the PRA in the United Kingdom, is acting exclusively as financial adviser to Barrick and no one else in connection with the Merger, this announcement and the matters described herein, and shall not be responsible to anyone other than Barrick for providing the protections afforded to clients of Morgan Stanley or for providing advice in connection with the Merger, this announcement or any matter referred to herein. Neither Morgan Stanley nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Morgan Stanley in connection with the Merger, this announcement or any matter referred to herein.

CIBC, which is supervised and regulated by the Office of the Superintendent of Financial Institutions in Canada and, in the UK, authorised by the PRA, subject to regulation by the FCA and limited regulation by the PRA, is acting exclusively as financial adviser to Randgold and for no one else in connection with the Merger and will not be responsible to anyone other than Randgold for providing the protections afforded to clients of CIBC or for providing advice in relation to the Merger, the content of this announcement or any matter or other document referred to herein. Neither CIBC nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of CIBC in connection with this announcement, any statement contained herein, the Merger or otherwise.

Barclays, which is authorised by the PRA and regulated in the United Kingdom by the FCA and the PRA, is acting exclusively for Randgold and no one else in connection with the Merger and will not be responsible to anyone other than Randgold for providing the protections afforded to clients of Barclays or for providing advice in relation to the Merger or any other matter referred to in this announcement. Neither Barclays nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Barclays in connection with any matter referred to in this announcement or otherwise.

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