Here is an old article that I dug up that comments on a $48 million debt issue. Note the following exerpt: "In five weeks flat, Randgold raised $48-million through the issue of 7% debentures convertible into Randgold ordinaries at R39,01 in 2001." If one thinks about it, the debt is almost twice the market cap of RANGY. This may be weighing on the stock price as people fear that RANGY may go bankrupt as have so many other companies in the Gold mining sector, due to the low POG.
btimes.co.za
Randgold's takeover team has no quitters
RANDGOLD, a share I have been backing since the takeover by Peter Flack and his management team in August 1994, added 150c to R36 on the strength of another sound performance from its investments and a doubling in net asset value to R43,25 at September 30.
The discount of share price to net asset value has narrowed: 12 months ago the shares were R14 against nav of R22. The big difference is materialising in Randgold Resources, the offshore exploration arm which has interests in six African countries. Now a March year-end, Randgold reported for the 12 months to September 1996. Not directly comparable with the 1995 figures, Randgold showed earnings of R49,9-million or 128,6c after exceptional items. Flack says that among the highlights were the takeover by 90%-held Randgold Resources of BHP Minerals Mali for $82-million settled in cash and through the issue of Randgold Resources shares.
Now named Randgold Resources Mali, the assets include the Syama mine and other prospects. Flack says the due diligence undertaken at Syama was an excellent job. Gold has been poured, improvements are still being effected and the target is for 190 000oz of gold in 1997 at a cash cost of $250/oz. Production costs have already been reduced from $316/oz to $275/oz.
Randgold Resources has identified 198 targets within Africa and R67-million has been budgeted for exploration in the next year. Randgold Resources, which will be ready for its own listing in 1998, has already established a resource base of 6-million ounces of gold.
In five weeks flat, Randgold raised $48-million through the issue of 7% debentures convertible into Randgold ordinaries at R39,01 in 2001. Flack notes that the calibre of the underwriters - Capels, Rothschilds, Morgan Grenfell and Societe G‚n‚rale, was a vote of confidence in Randgold's credibility overseas. No SA company has issued paper on more favourable terms, and it was pleasing that the issue was four times subscribed. Flack says the value of the issue exceeds the entire market capitalisation of Randgold two years ago when the former management was outvoted.
The grass never grows under these fleet feet: the earliest highlights of Randgold's year could almost be overlooked. It bid Gencor for three mines plus mineral rights, and now oversees Buffelsfontein, Stilfontein and Grootvlei as well as its original quartet Blyvoor, Harmony, Durban Deep and ERPM. Harmony also bought Unisel from Gencor, and West Wits was taken over by Durban Deep. Buffelsfontein was the star performer, chipping in R26,2-million of the R48,2-million profit after tax and capital expenditure earned by the seven. Grootvlei lost R10,7-million because of grade problems which have been overcome and a profit is expected this quarter. Randgold and all the mines save ERPM and Stilfontein were listed on Nasdaq this month at a cost of roughly half a million rands a company. Hold these shares: there are no quitters at Randgold. |
