SENS Announcement – Re-listing of R&E, Circular to R&E shareholders, Notice of general meeting and the abridged revised listing particulars of R&E

The board of R&E takes pleasure in announcing the finalisation and distribution of the Circular to R&E shareholders regarding the proposed settlement between R&E, JCI Limited (“JCI”) and JCI Investment Finance (Pty) Limited (“JCIIF”), details of which were disclosed to shareholders on SENS on 28 January 2010. The proposed net settlement will seek to return approximately R 950 million to R&E shareholders.

Furthermore the board of R&E is pleased to announce that the JSE has approved the re-listing of R&E shares on the JSE from the commencement of trade on Friday, 4 June 2010.

The proposed settlement and approved re-listing of R&E marks a key milestone in managements stated intention of restoring value to R&E shareholders as well as providing shareholders with a tradable share since its suspension on 1 August 2005.

Introduction

- Shareholders are referred to the detailed announcement on SENS on 28 January 2010 setting out the terms of the proposed settlement between R&E, JCI and JCIIF as concluded between the parties in terms of the revised Settlement Agreement dated 20 January 2010. The announcement furthermore contained details on the irrevocable support from certain R&E shareholders for the proposed settlement.
- Furthermore, as a separate matter and unrelated to the proposed settlement referred to above, R&E shareholders are hereby advised that on 14 January 2010, R&E exercised the security provided to it by JCI Gold Limited (“JCI Gold”), a subsidiary of JCI, (being a component of JCI Gold’s interest in the shares of Free State Development and Investment Corporation Limited (“FSD”)) which secured the outstanding loan amount of R 161 960 265 due to R&E by JCI Gold, as result of which R&E became the beneficial owner of a further 6 690 610 FSD shares (approximately 30.1% of the equity share capital of FSD), bringing R&E’s shareholding in FSD to 85.21% (hereinafter referred to as “the FSD excussion”), further details of which are set out in paragraph 3 below.
- It has been the stated intention of R&E to comply with the necessary requirements of the JSE Limited (“JSE”) to re-list R&E and to provide R&E shareholders with a tradable share. Paragraph 6 sets out the Abridged Revised Listing Particulars as required to be published in terms of the JSE Listing Requirements.

The Proposed Settlement

- As set out on the SENS announcement of 28 January 2010, subject to the fulfilment of all suspensive conditions to the revised Settlement Agreement and the implementation thereof:

- - JCI and JCIIF will cause 6 051 632 shares in Gold Fields Limited (“settlement GFI shares”) to be transferred to R&E;
  - JCI will issue and allot 1 555 710 220 JCI shares to R&E (“new JCI shares”);
  - R&E will, following the transfer of the settlement GFI shares to R&E and the issue and allotment of the new JCI shares to it, firstly make a capital distribution of the settlement GFI shares to R&E shareholders, out of share premium, in the ratio of 0.0809 settlement GFI shares for every one R&E share held and immediately thereafter, unbundle its entire shareholding of JCI (which will consist of both the new JCI shares per the proposed settlement and its existing JCI shares owned pre-settlement) to the R&E shareholders in terms of section 46 of the Income Tax Act 1962 (Act 58 of 1962), in the ratio of 24.8739 JCI shares for every one R&E share held; and
  - The parties will be released of all claims against each other.

- For the purposes of the proposed net settlement, incorporating the transfer of the settlement GFI shares from JCI and JCIIF to R&E and the issue of the new JCI shares to R&E, the board of R&E has elected to treat such settlement as a Category 1, related party transaction, in terms of the JSE Listings Requirements. Accordingly, R&E is required to obtain shareholder approval (excluding the approval from JCI and its subsidiaries and associates being the related party to the proposed settlement (“related parties”)) in respect of the proposed settlement.

2.3 In addition, in terms of the JSE Listings Requirements pertaining to related party transactions, the board of R&E would ordinarily be required to obtain a fairness opinion in respect of the proposed settlement incorporating the transfer of the settlement GFI shares to R&E and the issue of the new JCI shares to R&E, however is unable to do so. The inability to produce a fairness opinion was motivated to the JSE resulting in the board of R&E voluntarily including a Mediator’s Report that contains the opinion of the Mediators (comprising the opinion of Professor HE Wainer CA(SA), Mr C Nupen and Advocate SF Burger SC) in respect of the proposed settlement.

- The Mediators conclude by way thereof that:

“…the Randgold/JCI settlement agreement is in our opinion, commercially prudent and not inequitable to the shareholders of Randgold or JCI”.

- At the time of the aforementioned announcement on SENS, the unaudited pro forma financial effects of the proposed settlement were not available. The pro forma financial effects of the proposed settlement are set out in paragraph 4 below.

- Furthermore it should be noted that JCI has obtained the necessary regulatory approvals in respect of its circular to shareholders regarding the proposed settlement, which circular is expected to be distributed to shareholders on or about Thursday, 13 May 2010. The SENS announcement of 28 January 2010 furthermore contained details on the irrevocable support from certain JCI shareholders in respect of the proposed settlement.

The FSD Excussion

- On 17 April 2009, FSD and JCI Gold formalised, by way of the FSD Loan Agreement, a historical loan of R 105 396 864, including interest thereon at prime, which had been advanced by FSD to JCI Gold, prior to the reconstitution of the JCI board in August 2005, the original details of which could not be established for reasons that have been well documented.

- Furthermore, R&E entered into a loan agreement with, inter alia, JCI Gold and FSD, and advanced an amount of R60,5 million on 17 April 2009 and a further R25 million on 18 December 2009 to JCI Gold (“R&E Loan Agreement”), against the security of 9 933 850 FSD ordinary shares held by JCI Gold, further details of which were concluded in the Pledge Agreement of 18 December 2009 (“the Pledge Agreement”).
- R&E also acquired all rights and claims which FSD had against JCI Gold in terms of the FSD Loan Agreement (as set out in paragraph 3.1 above), on 18 December 2009.
- The total loan from JCI Gold was repayable to R&E by 11 January 2010, failing which R&E would be entitled to exercise its rights in terms of the security provided by JCI Gold to R&E in terms of the Pledge Agreement.
- JCI Gold failed to pay the full loan amount outstanding at 11 January 2010, and as such R&E exercised the security provided by JCI Gold in terms of the Pledge Agreement (being a component of JCI Gold’s interest in FSD shares), against the outstanding loan amount of R 161 960 265 (net of cash already received by R&E), as a result of which R&E became the beneficial owner of a further 6 690 610 FSD shares (approximately 30.10% of the equity share capital of FSD), bringing R&E’s total shareholding in FSD to 85.21%.
- The value at which the FSD shares were realised by R&E in terms of the security provided by JCI Gold was agreed by R&E and JCI Gold at R24.2071 per FSD share as set out in the Pledge Agreement. This price was based on FSD’s disclosed net asset value per FSD share at 31 December 2009. Such net asset value excluded any value for the prospecting rights held in FSD.
- The rationale for the excussion of the FSD shares was to enable R&E to recover the outstanding portion of the loan receivable from JCI Gold by exercising the security provided by JCI Gold in respect of such loans advanced by R&E.
- The JSE have ruled that the FSD excussion is a related party transaction in terms of the JSE Listings Requirements and as such has requested that R&E shareholders, excluding related parties, ratify by way of an ordinary resolution, the FSD excussion. The board of R&E has agreed to ratify the said FSD excussion but regards the exercise by it of its rights under the Pledge Agreement (which resulted in it taking transfer of 6 690 610 FSD shares), to have occurred solely in consequence of JCI Gold having failed to meet its repayment obligations to R&E when they fell due, in terms of the FSD Loan Agreement, the R&E Loan Agreement and the Pledge Agreement.
- The FSD excussion enjoys the support of the board of R&E and certain shareholders as set out in paragraph 3.10 below. Moore Stephens Corporate Finance (Jhb) (Pty) Limited, an independent expert providing the fairness opinion, have considered the FSD excussion to be fair to R&E shareholders.
- R&E has procured irrevocable undertakings from the following shareholders to vote in favour of the resolutions required to give effect to the FSD excussion:
  - Clear Horizon Multi-Strategy Fund which holds 1 271 168 R&E shares i.e. 1.7% of the issued share capital of R&E;
  - Investec which holds 26.26% of the issued share capital of R&E; and
  - Allan Gray, in which Allan Gray undertakes to vote in favour of the resolutions pertaining to the shares in respect of which it exercises the voting rights, and to recommend to its clients to vote in favour of the resolutions pertaining to the shares in respect of which its clients exercise the voting rights. Allan Gray directly and indirectly holds 24.35% of R&E.
- The unaudited pro forma financial effects of the FSD excussion are set out in paragraph 4 below.

The pro forma financial effects

4.1 The unaudited pro forma financial effects of the proposed settlement and the FSD excussion, as set out below are the responsibility of the directors of R&E. The unaudited pro forma financial effects are presented in a manner consistent with the basis on which the historical financial information has been prepared and in terms of R&E’s accounting policies. The unaudited pro forma financial effects have been presented for illustrative purposes only and, because of their nature, may not give a fair reflection of R&E’s financial position nor of the effect on future earnings after the implementation of the proposed settlement and the FSD excussion.

- The table below sets out the unaudited pro forma financial effects of the proposed settlement (incorporating the capital distribution and unbundling) and the FSD excussion on R&E, based on the audited consolidated financial results for the year ended 31 December 2009 and on the assumption that:
For calculating the earnings per share (“EPS”) and headline earnings per share (“HEPS”), the proposed settlement and FSD excussion were effected on 1 January 2009; and
For calculating the net asset value per share (“NAV”) and net tangible asset value per share (“NTAV”), the proposed settlement and the FSD excussion were effected on 31 December 2009.

“Before”
(A)

“After
FSD excussion”
(B)

% Diff
(B/A-1)

“After FSD excussion and settlement”

“After FSD excussion, settlement, capital distribution and unbundling”
(C)

% Diff
(C/A-1)

EPS (cents)

33%

1 240

2 483%

HEPS (cents)

33%

1 240

2 483%

Weighted average number of shares in issue
(‘000)

73 063

–

73 063

–

NAV per share (cents)

674

–

1 928

601

-11%

NTAV per share (cents)

674

–

1 928

601

-11%

Number of shares in issue (‘000)

71 813

–

71 813

–

- Salient notes and assumptions
  - The “Before” EPS and HEPS have been extracted without adjustment from the audited consolidated statement of comprehensive income for the year ended 31 December 2009.
  - The “Before” NAV per share and NTAV per share have been extracted without adjustment from the notes to consolidated annual financial statements for the year ended 31 December 2009.
  - The “After FSD excussion” EPS, HEPS, NAV per share and NTAV per share have been adjusted to include the effects of the FSD excussion which would increase only the profit attributable to R&E shareholders.
  - The “After FSD excussion and settlement” EPS, HEPS, NAV per share and NTAV per share have been adjusted to include the FSD excussion referred to in note 4.3.3 above and the proposed settlement of 6 051 632 settlement GFI shares and 1 555 710 222 new JCI shares issued to R&E.
  - The “After FSD excussion, settlement, capital distribution and unbundling” EPS, HEPS, NAV per share and NTAV per share have been adjusted to include the FSD excussion referred to in note 4.3.3, the proposed settlement referred to in note 4.3.4 above and the capital distribution of the settlement GFI shares to R&E shareholders and the distribution and unbundling of the JCI shares to R&E shareholders in proportion to their respective shareholdings.
  - Transaction costs of R4.61 million have been adjusted for.
  - For the avoidance of doubt, the resultant impact on the NAV per share and NTAV per share of the proposed settlement and the FSD excussion, as set out in the “After FSD excussion, settlement, capital distribution and unbundling” column merely reflects the impact on R&E of unbundling its existing interest in JCI, comprising 305 186 049 JCI shares, as the settlement GFI shares and the new JCI shares received by R&E as a result of the proposed settlement are immediately distributed and unbundled to R&E shareholders.

Furthermore, and for the avoidance of doubt, shareholders are reminded that the pro forma financial effects as set out above are based on the audited consolidated annual financial statements of R&E at 31 December 2009. Such audited consolidated annual financial statements have accounted for R&E’s investment in JCI at cost less impairments. The Mediators, in formulating their opinion regarding the revised Settlement Agreement, have also considered, inter alia, the unaudited NAV of R&E in which R&E’s investment in JCI was valued based on the published NAV of JCI at 31 December 2009, the pre-distribution effect of the proposed settlement and the effect of the cross holding between R&E and JCI (which affects the NAV of both companies).

Circular to shareholders and notice of general meeting

R&E shareholders are advised that in accordance with the JSE Listing Requirements, a circular to shareholders incorporating the Revised Listings Particulars relating to R&E’s re-listing, together with a notice of a general meeting of R&E shareholders, to be convened at 11h00 on Friday, 28 May 2010 at MW Business Centre, Michelangelo Hotel, Mandela Square, Sandton, was posted to shareholders today. Copies of the Circular incorporating the Revised Listing Particulars may be obtained during normal business hours at the registered office of R&E at 7th Floor, Fredman Towers, 13 Fredman Drive, Sandown, 2196, and from R&E’s sponsor and corporate advisor at PSG Capital (Pty) Limited, 1st Floor, Ou Kollege Building, 35 Kerk Street, Stellenbosch, 7600, from Wednesday, 12 May 2010 until Friday, 4 June 2010.

In addition the Circular incorporating the Revised Listing Particulars can be downloaded from the company’s website at www.randgoldexp.co.za

Abridged Revised Listing Particulars

These Abridged Revised Listing Particulars are not an invitation to the public to subscribe for or an offer to the public to purchase ordinary shares in R&E, but are prepared and issued in terms of the JSE Listings Requirements for the purpose of providing the public and shareholders of R&E with salient information pertaining to the Company and its re-listing on the JSE. A complete set of Revised Listing Particulars are contained in the Circular distributed to R&E shareholders as set out in paragraph 5 above.

6.1 Name and date of incorporation
R&E was incorporated in South Africa as a public company under the name Randgold & Exploration Company Limited on 29 September 1992 to take over the gold interests of Rand Mines Limited, being South Africa’s oldest mining house. R&E is an investment holding company with assets in the mining industry.
6.2 Background to re-listing
R&E alleges that it was previously the victim of widespread frauds and thefts of its assets, which resulted in the company being stripped of the majority of its assets. Uncertainty surrounding R&E’s substantial investment in Randgold Resources Limited (which comprised the majority of R&E’s asset base) prevented R&E from publishing annual financial statements for the financial year ended 31 December 2004.
On 1 August 2005 R&E was suspended on the JSE as a result of it not being able to produce audited financial statements for the financial year ended 31 December 2004 as required under the JSE Listings Requirements.
At the time of releasing the audited financial results for R&E for the financial years ended 31 December 2007, 2008 and 2009, the board of R&E had reaffirmed as a management priority, its commitment to lift the suspension in the trading of R&E’s shares on the JSE by seeking a re-listing of its ordinary shares, thereby allowing shareholders to trade their ordinary shares in R&E. The present board believes that, as a listed entity, the market will reward R&E’s loyal shareholders appropriately and unlock additional value, over and above the approximate R 950 million to be distributed and unbundled to shareholders in terms of the proposed settlement.

- Overview of R&E and Prospects

- - R&E continues to operate as an investment and exploration company in the gold mining sector, while the recovery of misappropriated assets remains a high priority. Management accordingly continues to carefully balance between investing in litigation and preserving and growing current assets.

- - The Company is managed by a small but skilled and committed team that endeavors at all times to contain operating expenses. R&E currently holds prospecting rights directly and indirectly through subsidiary companies which it plans to develop further, if proven viable, in order to increase the value of its investments.

- - Approximately 26% of the assets of R&E at 31 December 2009, being the date of last audited financial statements, constitutes investments in the gold market through R&E’s investment in Gold Fields Limited and gold-related prospecting rights. The balance of the assets of R&E is comprised of cash and secured loans to JCI and its subsidiaries and associated companies, making R&E extremely liquid and well placed to take advantage of viable investment opportunities in the mining industry.

- - Going forward, R&E’s strategic objectives are as follows:
To utilise its liquid assets, exploration targets and skill base as a platform to develop and participate in investment and funding opportunities in the resources industry to grow the current portfolio;
To review its legal strategy in light of the proposed settlement with JCI and JCIIF and where feasible, continue pursuing its claims against third parties and, where possible, to make recoveries against such parties; and
To realise further value for R&E shareholder, insofar as is possible.

6.4 Re-listing and JSE approval
R&E has obtained formal approval from the JSE to re-list all of the Company’s issued ordinary shares on the main board of the JSE in the “Mining: Gold Mining” sector of the JSE list under the abbreviated name “Randgold” and share code “RNG” with effect from the commencement of trade on Friday, 4 June 2010.

As at the date of re-listing, the total authorised ordinary share capital of the company will comprise 105 000 000 ordinary shares with a par value of R0.01 (one cent) each, the issued ordinary share capital will comprise of 74 813 128 ordinary shares with a par value of R0.01 (one cent) each and a total share premium account of R986.05 million. All ordinary shares in issue rank pari passu with each other.

6.5 Directors

The full names, ages, business addresses and capacities of the directors of R&E are outlined below:

Full name	Age	Capacity	Business Address
Motsehoa Brenda Madumise	45	Independent non- executive director	Unit 3, 17 Georgian Crescent Road, Northdowns Office Park, Bryanston 2191
Marais Steyn	38	Chief executive officer	R&E, 7th Floor Fredman Towers, 13 Fredman Drive, Sandown 2196
David Chaim Kovarsky	62	Non-executive chairman	International Ferro Metals Limited, Suite 14b, 3rd Floor,3 Melrose Boulevard, Melrose Arch 2076
John Hulme Scholes	43	Independent non-executive director	Aquarius Platinum (South Africa) (Pty) Limited, 1st Floor,Building 5,Harrowdene Office Park, Western Service Road, Woodmead 2191
Van Zyl Botha	29	Financial Director	R&E, 7th Floor Fredman Towers, 13 Fredman Drive, Sandown 2196

Johannesburg
12 May 2010
Sponsor and Corporate Advisor – PSG Capital (Pty) Limited
Attorneys – Van Hulsteyns
Auditors and independent reporting accountants to R&E – KPMG Inc.
Independent Expert – Moores Stephens