Category Archives: Company Announcements

Chris Nissen’s Resignation from Randgold & Exploration

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Chris Nissen, who announced his resignation from the Board of Randgold & Exploration Company Ltd on Thursday 28 March 2007, has clarified that his decision was prompted by a desire to create time to fulfil other business interests.

He said that it was not, as implied in some reports, related to the High Court application by Trinity Asset Management alleging that he was “conflicted”.

Nissen said that following the death of Brett Kebble in 2005, he had agreed to remain on the Boards of Randgold & Exploration & JCI Limited in order to ensure continuity.

“Now that the companies are heading for a merger I feel comfortable in standing down from the Board of Randgold & Exploration in order to devote more time to my other business interests. I will however remain on the board of JCI for the moment as I believe that I can still add unique value in my capacity as chairman of Boschendal (Pty) Ltd.”

Nissen said that he was in no way conflicted in having served on both boards:

“On the contrary the insight I was able to bring to the deliberation because of my long association with the company served the best interest of shareholders.”

“I am fully supportive of the proposal to merge JCI and R&E and I do not believe that the legal action threatened by certain minority shareholders has any legal basis.”

Media statement issued on behalf of Randgold & Exploration Company Limited by Brian Gibson (Contact 011 8801510 or 083 253 5988)

Joint announcement: JCI and R & E Scorpion Raid

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  1. On 7 March 2007, following a Search Warrant having been issued by the High Court of South Africa in accordance with the provisions of Section 29(5) of the National Prosecuting Authority Act, 32 of 1998, the Scorpions, an arm of the Directorate of Special Operations (“the DSO”), conducted a simultaneous raid at the premises of Randgold and Exploration Company Limited (“R&E”) and JCI Limited (“JCI”), among others.
  2. The purpose of the raid was to seize documents and records which came into existence prior to the reconstitution of the Boards of R&E and JCI in August 2005 and which may be used as part of an investigation involving R&E and JCI that has been authorised by the DSO.
  3. The suspected crimes and offences which are being investigated range from fraud and theft to reckless and / or fraudulent trading.
  4. In substantiation of the Search Warrant issued, the DSO claim that “there are reasonable grounds to believe or suspect that there is evidence which has a bearing or might have a bearing on the suspected offences” to be found in or on the premises of JCI and R&E.
  5. As a result of the Search Warrant and raid by the Scorpions, various documents and records were uplifted from the premises of R&E and JCI which are likely to be used in the investigation that has been authorised.
  6. The documents and records that were uplifted, were removed with the full co-operation of R&E and JCI. Where original documentation and records were uplifted, they were uplifted on the understanding that should R&E and/or JCI require copies of the documents and records in due course they would be made available by the DSO on request.

FORWARD-LOOKING STATEMENT DISCLAIMER FOR R&E

Certain statements in this announcement, as well as oral statements that may be made by R&E’s officers, directors or employees acting on its behalf relating to such information, contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, specifically Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All statements, other than statements of historical facts, are “forward-looking statements”. These include, without limitation, those statements concerning the value of the net assets of R&E and JCI; the ability of the companies to successfully consummate a merger that is approved by the shareholders and is acceptable to the necessary governmental authorities; the fraud and misappropriation that are alleged to have occurred and the time periods affected thereby; the ability of R&E to recover any misappropriated assets and investments; the outcome of any proceedings on behalf of, or against R&E, including any proceedings that may be instituted by the Scorpions, the DSO or other governmental authorities or agencies; R&E’s ability to complete its forensic investigation and prepare audited financial statements; the time period for completing its forensic investigation and audited financial statements; the amount of any claims R&E is or is not able to recover against others, including JCI, and the success of its mediation with JCI; the estimated valuations given to assets and liabilities in the NAV statement; and the ultimate impact on R&E’s previously released financial statements and results, assets and investments, including with respect to Randgold Resources Limited, business, operations, economic performance, financial condition, outlook and trading markets. Although R&E believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct, particularly in light of the extent of the alleged frauds and misappropriations uncovered to date. Actual results could differ materially from those implied by or set out in the forward-looking statements.

Among other factors, these include the inherent difficulties and uncertainties in ascertaining the values of the net assets of the companies, particularly in light of the absence of any independent valuations, the existence of any unknown liabilities, the willingness of any governmental authority to sanction any merger in light of the absence of independent valuations or otherwise; the extent, magnitude and scope of any fraud and misappropriation that may be ultimately determined to have occurred and the time periods and facts related thereto following the completion of the forensic investigation and any other investigations that may be commenced and the ultimate outcome of such forensic investigation; the ability of R&E to successfully assert any claims it may have against other parties for fraud or misappropriation of R&E assets or otherwise and the solvency of any such parties, including JCI; the determinations of the mediators and acceptance of any such determinations by the shareholders of R&E and JCI; the ability of R&E to defend successfully any counterclaims or proceedings against it, including any proceedings that may be instituted by the Scorpions, the DSO or other governmental authorities or agencies; the ability of R&E and its forensic investigators to obtain the necessary information with respect to R&E’s transactions, assets, investments, subsidiaries and associated entities to complete the forensic investigation and prepare audited financial statements; the willingness and ability of R&E’s forensic investigators and auditors to issue any final opinions with respect thereto; the ability of R&E to implement improved systems and to correct its late reporting; the JSE Limited’s willingness to lift its suspension of the trading of R&E’s securities on that exchange; changes in economic and market conditions; fluctuations in commodity prices and exchange rates; the success of any business and operating initiatives, including any mining rights; changes in the regulatory environment and other government actions; business and operational risk management; other matters not yet known to R&E or not currently considered material by R&E; and the risks identified in Item 3 of R&E’s most recent annual report on Form 20-F filed with the SEC and its other filings and submissions with the SEC.

All forward-looking statements attributable to R&E, or persons acting on its behalf, are qualified in their entirety by these cautionary statements. R&E expressly disclaims any obligation to release publicly any update or revisions to any forward-looking statements to reflect any changes in expectations, or any change in events or circumstances on which those statements are based, unless otherwise required by law.

 

RANDGOLD’S ANSWERS TO THE FURTHER QUESTIONS RAISED BY DAVID PALMER FOLLOWING UPON THE MEETING HELD ON THE 9TH OF MARCH 2007 AT 09H00 IN THE AUDITORIUM AT 28 HARRISON STREET JOHANNESBURG, WHICH QUESTIONS WERE INVITED FROM SHAREHOLDERS BY THE CHAIRMAN, MR DAVID NUREK.

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A successful investor in his own right, Izan de Bruin’s achievements can be attributed to the ideal mix of entrepreneurial endeavour, consummate expertise in the stockmarket and a relentless pursuit of passion for education in the financial arena.

His independent asset management company, Xenium Financial Managers has consistently produced excellent returns for its clients. His stockbroking training company is responsible for the successful careers of over 50 black investment professionals. His financial intelligence courses, some conducted in partnership with the JSE and FASET, have altered the lives of many South Africans.

His entrepreneurial spirit has lead to the successful creation of various successful companies in both the financial, agriculture and services industries.

Over the years he has contributed to financial columns in media like Classic fm, RSG, The Star, Sunday Times and many others.

General

At the meeting of Shareholders which took place on Friday 9 March 2007 in accordance with the provisions of Section 181 of the Companies Act No 61 of 1973, as amended, Randgold informed its Shareholders that should they wish to raise further questions, arising from the answers furnished in response to those asked by the Requisitionists, they were invited to do so by 17h00 on Friday 9 March 2007.

In response to this invitation, Mr Palmer addressed a letter to Randgold by the prescribed time, requesting answers to further questions addressed by him.

The matters raised by Mr Palmer together with Randgold’s responses thereto are set out below.

In considering the responses furnished by Randgold, Shareholders are asked to bear in mind that where Randgold fails to respond to any allegation and/or conclusion reached by Mr Palmer it is not to be taken as having admitted such allegation(s) and/or conclusion(s).

Shareholders are further asked to bear in mind that following upon the Section 181 component of the business transacted at the meeting of 9 March 2007, Shareholders were asked in terms of Section 179(4) of the Companies Act to vote in respect of the Directors of Randgold. Such voting did take place in consequence of which Messrs Nurek, Gray, Nissen, Steyn and Ms. Madumise were re-elected as Directors of Randgold. The criticisms leveled against certain of these Directors in terms of the Section 181 Questions, and the questions contained in Mr Palmer’s letter were well known to the Shareholders at the time of their vote.

    1. Matter raised for response

      Further to today’s meeting for the abovementioned Company, in terms of South African law, I understand the position for stolen shares to be as follows. If shares have been stolen then sold in the market through a broker/bank these shares have to be returned and the loss had to be taken by the JSE/bank. In view of the above, please communicate to me as to through whom all Randgold Resources shares were sold and kindly confirm that the Directors are taking the necessary legal action.

Response

Randgold is of the view that the summary and legal conclusions reached by Mr. Palmer are neither a correct or complete statement of the position under South African Law. Randgold assures Shareholders that all steps will be taken to ensure that the persons who wronged it, are held accountable for their actions.

  1. Matter raised for response

    A further point in respect of the Loan Agreement is that security should have been obtained in respect of the loan, was this done? If no security has been obtained, this is not a Loan Agreement but perhaps theft. It is the fiduciary duty of the Directors to ensure that all appropriate action and actions are taken against any financial institution that could have been involved in the above. Has action been taken in this regard? Failure to take the necessary action against the Parties concerned would be a breach of fiduciary duty. Are the Directors aware of this?

    Response

    Randgold considers the conclusions reached by Mr. Palmer to be inaccurate and moreover disagrees with the standpoint that the failure to obtain security constitutes theft. Shareholders are again advised that Randgold is pursuing all possible avenues against those who have wronged Randgold.

  2. Matter raised for response

    It is my opinion that there was a total lack of information forthcoming from the Chairman of the meeting to Shareholders at a duly constituted and legal meeting under section 181. I find it appalling that Shareholders have waited close to two years to be refused any meaningful information. I recommend that your board call a meeting to provide the necessary information to correct your error in judgment today. Is this not another breach of fiduciary duty?

    Response

    Your perception is not shared. All information other than that which related to confidential matters and price sensitive information were in the view of Randgold properly and adequately addressed. It is to be stressed, that Shareholders are not entitled under the guise of a Section 181 Requisition to insist upon the disclosure of matters which are confidential and of a price sensitive nature and which have the consequence of inhibiting the Company from properly conducting its affairs in the future.

  3. Matter raised for response

    Please confirm in writing to me that I will obtain a verbatim transcript of the meeting today including the comments made by Shareholders. Is this not a right of a shareholder? It is quite clear that a recording was taking place at the venue.

    Response

    A copy of the transcript has already been made available to Mr Palmer. Should any other Shareholders wish to inspect the transcript they are invited to make arrangements with Randgold’s Company Secretary, Roger Pearcey who may be contacted on (011) 688 5100.

  4. Matter raised for response

    At the meeting the Chairman stated that Allan Gray had received absolutely no confidential information from the Directors additional to what other Shareholders have received and was in the exact same position that other Shareholders are in. In view of the above, could you confirm this in writing and also that there is no confidentiality agreement between Randgold and Allan Gray? Could this writing please be in an affidavit format?

    Response

    At the meeting held on the 9th of March 2007 the Chairman indicated that to the best of his knowledge no other shareholder had obtained any additional information. Mr Nurek understood the question to have been raised in the context of the Section 181 Requisition only. Shareholders are referred to the joint announcement published by Randgold and JCI on 15 March 2007, wherein reference is made to the discussions held with Randgold’s major Shareholders and the information furnished to such Shareholders.

  5. Matter raised for response

    To me there is a conflict of interest amongst the Directors and in respect of this matter we reserve our rights to act against the Directors in their personal capacities. Could you ensure that this is placed before the Directors at the next board meeting? Please confirm when this has been done. The Company and or any insurance Company should not be held liable for the actions of the Directors. Can you confirm the insurance companies have been informed accordingly?

    Response

    The Company notes the reservation by Mr. Palmer of the right to act against Directors of the Company. Shareholders are referred to the provisions of Article 136 and 137 of its Articles of Association which indemnifies Directors where they have acted in good faith. In addition, Shareholders are advised that the Company enjoys insurance for the acts of its Directors and Officers however does not share the view of Mr Palmer that the Directors are conflicted. Randgold denies that Mr Palmer has suffered any loss of any nature in regard to the actions of the Directors. In addition, Shareholders are reminded that in spite of the allegations of conflict and other matters raised in the Section 181 requisition, a democratic vote of the Shareholders took place subsequent to the Section 181 meeting the effect of which was to re-elect the Board. Randgold’s insurers have nevertheless been fully informed of the stance adopted by Mr Palmer.

  6. Matter raised for response

    I noted with interest the Chairman’s comments regarding the delay and inability of the Company in producing audited financial statements. While we accept that the resignation of the previous financial Director may have impacted that, I assume that significant fees are being paid to KPMG for the completion of the forensic audit which one would have thought would have given us an accurate view of the current financial state of the Company. How does the mediation process have anything to do with the delay as surely this is for the future, and has no relevance in reporting the past? Is this not just additional evidence of a cover up? When can we expect to have financial statements for the years up to and including the financial year 2006? Please assure us that no attempt will be made to settle mediation process until the Shareholders have been presented with final financial statements.

    Response

    Shareholders are reminded of the reasons advanced by Randgold as to why audited financial statements have not to date been finalised. Those reasons are still valid. In addition, Shareholders are reminded that the Company is doing everything within its power to finalise audited financial statements as soon as practicably possible. The finalisation of financial statements is dependant upon a Resolution of the disputes between Randgold and JCI. The Company notes the request for an assurance that no attempt will be made to settle the mediation process until the financial statements have been prepared, but it does not agree that the process should be suspended pending the finalisation thereof.

  7. Matter raised for response

    I believe the last set of accounts produced by the auditing Company Price Waterhouse were inaccurate. Has any legal action been taken against said auditors? What happened to the forensic report prepared by Umbono, and why were KPMG called in?

    Response

    Shareholders are referred to the response furnished by Randgold in answer to similar questions raised by the Requisitionists in the Section 181 Requisition. Randgold re-iterates that actions against a variety of persons are in the process of being formulated and certain of these actions are underway. It would be inappropriate to comment further at this stage, however Shareholders will be advised as and when further developments unfold. Randgold wishes to point out that whilst Umbono was appointed as forensic auditors, the services of KPMG have been retained as Randgold’s auditors, they having replaced Charles Orbach and Company. Umbono and KPMG have been appointed in respect of different roles, Umbono not rendering the services of auditors. Shareholders are also advised that the division of KPMG which undertook the forensic investigation of JCI is a completely distinct division of KPMG having no affiliation with the division which has been appointed by the Company as its statutory auditors.

  8. Matter raised for response

    The Directors must surely be aware that claims may prescribe. Will all the necessary summonses be issued against all parties to ensure that nothing prescribes?

    Response

    The Company is in the process of taking such steps as are necessary and will remain mindful of prescription.

Profile: Daniel Izan de Bruin

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Summary

A successful investor in his own right, Izan de Bruin’s achievements can be attributed to the ideal mix of entrepreneurial endeavour, consummate expertise in the stockmarket and a relentless pursuit of passion for education in the financial arena.

His independent asset management company, Xenium Financial Managers has consistently produced excellent returns for its clients. His stockbroking training company is responsible for the successful careers of over 50 black investment professionals. His financial intelligence courses, some conducted in partnership with the JSE and FASET, have altered the lives of many South Africans.

His entrepreneurial spirit has lead to the successful creation of various successful companies in both the financial, agriculture and services industries.

Over the years he has contributed to financial columns in media like Classic fm, RSG, The Star, Sunday Times and many others.

Main positions held

1984-1987: Fisher Pelargonium Gmbh NKG

  • largest worldwide producer and distributor of young plants (annual turnover: E1bn)
  • mentored by the CEO of the company
  • trade shows, sales (Belgium, Netherlands, Canary Islands, Spain, Germany)
  • research projects (automation of greenhouse usage, watering, enhanced growing methods)
  • assisted company’s expansion to the US

1987-1989: Grandi Plants
Managed own farming operation in the production of flowering pot plants

1989-1991: Progressive Systems
Independent agent

1991-1992: BP Bernstein Stockbrokers
Asset manager

1993/94: De Witt Morgan Stockbrokers
Analyst, Asset Manager

1995/96: BP Bernstein
Director

1996-2000 Cape Flor (subsidiary of Swiss company, Treuverbund)
Managing Director
Managed 300-staff strong plant exporting company.

1997/98: JM Folscher Stockbrokers
Director, Partner Managed Equity and Corporate Finance Divisions
Managed two successful corporate listings

1998-2001: Xenium Securities
Established own company, Xenium Securities
Sold in 2001 to PSG

From 2002: Xenium Financial Managers
Successful asset management company of 500 clients Achieved 600% return for clients over the past four years

Educational Arena

1992 -1994 Compiled Independence Financial Course

2003 – Developed Sterco course with FASET
2-year diploma in financial management

Education

Wits Business School: JSE Membership Exam (1990)
University of Pretoria: Electronic engineering (1987)
JSE: Compliance officer (since 1994)

Personal data

Izan de Bruin is 43, married, and has a 13 year old daughter.

Directorate: Appointment

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Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/005642/06)
Share code: RNG
ISIN: ZAE000008819 (Suspended)
Nasdaq trading symbol: RANGY (delisted)
ADR ticker symbol: RNG
(“R&E” or “the Company”)

In compliance with section 3.59 of the Listings Requirements of JSE Limited, notification is hereby given that Mr. Daniel Izan de Bruin has been appointed as a director of the Company with effect from 1 April 2007.

The board of R&E is now as follows:

David Morris Nurek – (Non-Executive Chairman)
Peter Henry Gray – (Chief Executive Officer)
Marais Steyn – (Financial Director)
Motsehoa Brenda Madumise – (Independent Non – Executive Director)
Daniel Izan de Bruin – (Independent Non – Executive Director)

 

2 April 2007
Johannesburg

Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)

Directorate: Resignation

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Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/005642/06)
Share code: RNG
ISIN: ZAE000008819 (Suspended)
Nasdaq trading symbol: RANGY (delisted)
ADR ticker symbol: RNG
(“R&E” or “the Company”)

In compliance with section 3.59 of the Listings Requirements of JSE Limited, notification is hereby given that Mr. Andrew Christoffel Nissen has resigned as a director of the Company with effect from 1 April 2007.

In view of the recent announcement published on 15 March 2007 relating to settlement and/or merger negotiations with JCI Limited, Mr. Nissen has decided that it is timely to devote his attention to a number of projects he is currently involved with, as well as personal business opportunities that have recently emerged.

The board wishes to express its appreciation for the commitment and contribution that Mr. Nissen has made to the Company.

The board of R&E is now as follows:

David Morris Nurek – (Non-Executive Chairman)
Peter Henry Gray – (Chief Executive Officer)
Marais Steyn – (Financial Director)
Motsehoa Brenda Madumise – (Independent Non – Executive Director)

 

30 March 2007
Johannesburg

Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)

Results of the general meeting of R&E shareholders held at 09H00 on Friday, 9 March 2007

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R&E shareholders are referred to the Notice of General Meeting, which was issued to shareholders dated 9 February 2007, wherein R&E shareholders were informed of the convening of a general meeting of the Company (which was deemed to be an annual general meeting) as directed by the Registrar of Companies, in terms of Section 179(4) and in terms of Section 181 of the Companies Act, 1973 (Act 61 of 1973), as amended, and Articles 44 and 45 of the Company’s Articles of Association.

The results of the resolutions proposed as set out in the notice of general meeting, and the results thereof, representing 54 787 324 of the issued share capital of the Company, present or represented by proxy thereat, was as follows:

FOR AGAINST ABSTAIN
1.a) To re-elect MR AC Nissen as a director 54.98% 29.18% 15.83%
   b) To re-elect Ms MB Madumise as a director 55.73% 21.63% 22.64%
   c) To elect Mr PH Gray as a director 71.56% 28.44% 0.00%
   d) To elect Mr DM Nurek as a director 55.73% 28.44% 15.83%
   e) To elect Mr J Blersch as a director 32.23% 51.33% 16.44%
   f) To elect Mr TG Dale as a director 32.23% 51.33% 16.44%
   g) To elect Mr M Steyn as a director 96.91% 2.48% 0.60%
2. Re-appointment of KPMG as auditors to the Company,
and to authorise their remuneration for the ensuing year		 81.57% 2.60% 15.83%

Directors in office as at 9 March 2007 are as follows:

Mr DM Nurek (Non-Executive Chairman)
Mr PH Gray (Chief Executive Officer)
Mr M Steyn (Financial Director)
Ms MB Madumise (Independent Non-Executive)
Mr AC Nissen (Independent Non-Executive)

9 March 2007
Johannesburg

Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)

Answers to questions directed by the requisitionists to the directors of Randgold and Exploration Company Limited (“Randgold” or “the Company”) pursuant to a meeting in terms of the provisions of Section 181 of the Companies Act, no. 61 of 1973, as amended.

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SECTION 1 : Questions relating to the claims of Randgold against JCI and of JCI against Randgold (if any) currently being addressed through the process of mediation
1 Question 1.1 : A copy of the Umbono Report as delivered to JCI by Randgold in terms of the Mediation Agreement is required
Randgold declines to make available the Umbono Report.
Randgold and JCI are engaged in a mediation process as a prelude to a possible arbitration. The mediation process is privileged.
In the event that the mediation should not bring about a result acceptable to Randgold’s Shareholders or JCI’s Shareholders, an arbitration will follow.
Randgold approached the Mediators after the Requisition was served. The Mediators are in agreement that the mediation is privileged and that no documents forming the subject matter thereof should be made available to Randgold’s Shareholders nor should any matter germane to the mediation / arbitration process be allowed to filter into the public domain.
In any event, Randgold and JCI are contractually bound in terms of the Mediation Agreement not to do anything which may have the effect of undermining the mediation process. A release of the document sought would be contrary to this.
2 Question 1.2 : A copy of the KPMG Report as delivered to Randgold by JCI in terms of the Mediation Agreement is sought
Randgold is similarly and for the grounds mentioned, not prepared to divulge the KPMG Report.
3 Question 1.3 : A synopsis of the KPMG Report in a format similar to the synopsis of the Umbono Report, which appears at pages 8 to 18 of the Notice of General Meeting dated 9 June 2006 issued in anticipation of the General Meeting of Randgold’s Shareholders held on 30 June 2006 (“the Notice of General Meeting”) has been requested
Randgold declines to make available a synopsis of the KPMG Report as requested.
4 Question 1.4 : A copy of the Statement of Claims, Statement of Defence and Replication (and any amendments thereto) delivered by Randgold to JCI in terms of the Mediation Agreement is sought
Randgold is of the firm view that its Shareholders are not entitled to the documents which are requested.
This approach has been endorsed by the Mediators.
5 Question 1.5 : A copy of the Statement of Claims, Statement of Defence and Replication (and any amendments thereto) delivered by JCI to Randgold in terms of the Mediation Agreement is sought
The Shareholders are not entitled to these documents.
The Shareholders are however advised that JCI did not serve a Statement of Claim as envisaged in the Mediation Agreement and Randgold did not file a Replication to JCI’s Statement of Defence.
6 Question 1.6 : In terms of an announcement made by JCI on 12 September 2006, JCI had not submitted any claims against Randgold in terms of the mediation process. Kindly confirm that the announcement was indeed accurate and that no claims in any form have been presented by JCI to Randgold as at date hereof
Randgold can confirm that the announcement which was made on 12 September 2006 is accurate
JCI has not, as at the date of this meeting, submitted any claims against Randgold.
7 Question 1.7 : If any claims have been presented by JCI to Randgold, what is the nature and form of such claims?
JCI has not submitted any claims against Randgold.
8 Question 1.8 : What is the total amount of the Randgold claims currently being claimed from JCI by Randgold and what claims arise from –
1.8.1 Misappropriation from investments in listed shares; or
1.8.2 The listing of new Randgold shares, issued for no value,
1.8.3 Selling such shares and “laundering the proceeds through a web of special purpose vehicles with trading bank account”
The information which is being requested is privileged and if furnished would have the effect of undermining the sanctity of the mediation process which the Mediators have indicated ought to be preserved.
As previously advised, Shareholders are informed that Randgold’s claims against JCI amount in the aggregate to R5 786 177 999.26.
9 Question 1.9 : What were the amounts of the proceeds realised from –
1.9.1 The sale of the misappropriated assets as referred to in 1.8.1 above;
1.9.2 The sale of the Randgold Shares issued for no value as referred to in 1.8.2 above?
The answers which are being requested by the Requisitionists, if furnished, would similarly have the effect of undermining the mediation process and be at variance with the Mediators and Randgold’s legal advisor’s view, that the mediation process should not be exposed.
The mediation process is privileged and is to be safeguarded.
10 Question 1.10 : Who were the recipients of the proceeds identified in 1.9 above?
As previously disclosed, JCI was amongst the parties who benefited from the proceeds resulting from the sale of Randgold’s assets.
In addition, Consolidated Mining Management Services Limited (being a subsidiary of JCI) also received certain benefits.
As to the other persons who received benefit, the information being requested is confidential.
Randgold will pursue all and any third parties who have wronged Randgold where legally sustainable causes of action exist and where the Board deems it appropriate to do so. Such actions are already underway.
11 Question 1.11 : What is the current status of the mediation process?
Shareholders are referred to the Statement which the Mediators requested Randgold to publish to its Shareholders dated 28 February 2007 as well as the Postscript which the Mediators made available on 5 March 2007.
12 Question 1.12 : Has JCI been requested by Randgold to waive the Defence of Prescription in respect of the Randgold claims? If so, a copy of the waiver concerned is requested. If not, is it contended that it is not necessary for JCI to have waived the Defence of Prescription? If it is so contended, on what basis is this the case?
Randgold declines to answer this question.
This is a matter which descends into the mediation.
13 Question 1.13 : Is it accepted by the Directors of Randgold that, in the light of the provisions of clause 9 of the Mediation Agreement (and in particular 9.1.1.1 to 9.1.1.3 thereof), the Board of Directors of Randgold is precluded from settling any dispute in regard to the Randgold claims and JCI claims (if any), it being specifically stipulated in the Mediation Agreement that the Mediators’ recommendations shall be tabled before each of Randgold’s and JCI Shareholders and that the Shareholders concerned shall be called upon to vote either in favour of or against the Mediators’ recommendations?
The Board does not agree that clause 9 of the Mediation Agreement is limiting.
The Board is well within its rights to act responsibly and as it deems appropriate in managing the Company. The Board has no hesitation that it is acting in the best interests of its Shareholders.
Although the Board has participated actively in the mediation process it has, where it felt that it was appropriate, engaged in settlement discussions with JCI.
Ultimately, the Shareholders of both Randgold and JCI will be required to determine the outcome of the mediation. This applies equally to any settlement of the mediation.
14 Question 1.14 : If any of the Directors do not accept the statement expressed in 1.13 above, the reasons for their disagreement are requested
Not one of the Randgold Board members is opposed to a responsible settlement of the mediation with JCI.
15 Question 1.15 : If settlement negotiations between Randgold and JCI are in fact under way –
1.15.1 Why are the same being conducted in apparent contravention of clause 9 of the Mediation Agreement?
1.15.2 Who are the Directors involved in such negotiations on behalf of Randgold?
1.15.3 Who are the Directors involved in such negotiations on behalf of JCI?
It is surprising that the Requisitionists seem to be aware of the settlement discussions which are taking place entirely without prejudice and in the utmost confidence.
Prior to the 19th of January 2007 when the requisition was served, no announcement had been made by Randgold that it had engaged in settlement discussions with JCI in tandem with the Mediation process.
When and if a proposal is made to settle the mediation, Shareholders will be fully informed hereof and be called upon to determine whether or not a settlement of the mediation should occur.
16 Question 1.16 : What is the view of Randgold’s Board as to the recoverability of the total amount of the Randgold claims from JCI in the event of such claims all being upheld (whether in the mediation or arbitration process or by a Court)?
Randgold has not yet succeeded in proving its claims against JCI. When and if Randgold succeeds in doing so, it will only at that stage be able to determine the recoverability thereof against JCI.
Shareholders are advised to acquaint themselves with JCI’s unreviewed and unaudited financial statements regarding the last published view on the financial position of JCI.
SECTION 2 : The composition of the Randgold Board
1 Question 2.1 : Whether a resolution exists in terms of which the Randgold Board was so reconstituted. If so, a copy is requested.
A copy of the resolution giving rise to the reconstitution of Randgold’s Board was made available to the office of the Company Secretary with effect from 26 February 2007.
2 Question 2.2 : A copy of the minutes of the meeting at which such resolution was proposed and voted upon.
There are no minutes in respect of the resolution that was passed.
3 Question 2.3 : The names of the directors who passed such resolution and the list of the directors so appointed by them.
The Directors who remained after the late Brett Kebble, Roger Kebble, Hennie Buitendag and Lunga Ncwana resigned from Randgold’s Board were Brenda Madumise and Chris Nissen.
Brenda and Chris appointed Chris Lamprecht and Peter Gray to fill the casual vacancies which had arisen on the Board as a consequence of the aforesaid resignations.
4 Question 2.4 : The basis on which the directors who voted for such resolution considered it to be in the interests of Randgold to comply with the terms of the Investec Loan Agreement to which Randgold was not a party and in circumstances where JCI was in fact considered by Randgold to be a substantial debtor of Randgold.
This is an internal matter to which Shareholders are not entitled to become privy.
Any decision which Randgold took on this issue constitutes the exclusive domain of the Board at the time. The current Board denies that there is any obligation on it to make available the information requested.
5 Question 2.5 : The present composition of the Board of Randgold together with an identification of those directors who were appointed in terms of the Investec Loan Agreement or with the approval of Investec (“the Investec appointees”) and those directors who were subsequently appointed to the Board of Randgold to act as independent directors.
Randgold’s Board is currently comprised of the following Directors:
5.1 Mr Nurek – Chairman;
5.2 Mr Gray – Chief Executive Officer;
5.3 Marais Steyn – Financial Director;
5.4 Brenda Madumise;
5.5 Mr Nissen;
5.6 Mr Blersch;
5.7 Mr Dale.
Mr Nurek, Mr Gray, Mr Lamprecht (the former Financial Director of Randgold), Miss Madumise and Mr Nissen were not appointed with the approval of Investec. They were appointed by the then duly constituted Board of Randgold pursuant to an acceptance of the terms and conditions set out in the Investec Loan Agreement.
Randgold denies that the persons appointed with the approval of Investec were “Investec appointees”. Such Directors have throughout acted independently and in the best interests of Randgold.
To the extent that Shareholders do not share this view, they will be afforded the opportunity to indicate this when it comes to voting on the reconstitution of the Board of Randgold, later today.
Mr Blersch and Mr Dale were appointed to the Board of Randgold on 14 August 2006, following nominations to Randgold’s Board having been called for in the Notice convening the General Meeting of 30 June 2006. (Mr Blersch and Mr Dale were recommended by Trinity Asset Management)
6 Question 2.6 : The names of those directors on the Randgold Board who are presently also members of the Board of JCI.
The following Randgold Directors are also Directors of JCI:
o Mr David Nurek is JCI’s Non-Executive Chairman;
o Mr Peter Gray is JCI’s Chief Executive Officer;
o Mr Chris Nissen serves as a Non-Executive Director of JCI.
7 Question 2.7 : The names of those directors who are presently Directors of Investec or of any of the subsidiary or associate companies of Investec or who are employed by Investec (“the Investec Directors”).
Mr Nurek is the only member of Randgold’s Board who has an affiliation with Investec.
8 Question 2.8 : An explanation as to why the Randgold Board (or any of the individual directors who serve thereon) consider it necessary or appropriate that any of the Investec appointees and/or Investec directors should continue to sit as members of the Randgold Board.
It is not the function of the current Board of Randgold to reconstitute Randgold’s Board at an Annual General Meeting. That is a matter for the Shareholders to determine.
Accordingly the Board declines to comment.
As mentioned previously, Shareholders have the opportunity to vote on a reconstitution of Randgold’s Board later today.
9 Question 2.9 : An explanation as to why the Randgold Board (or any of the individual directors who serve thereon) consider it necessary or appropriate that Mr Peter Gray and Mr David Nurek should continue to act as CEO and Chairman respectively of both the debtor company (JCI) and its major creditor (Randgold).
This is a matter for the Shareholders to decide.
The Randgold Board is not seeking to influence the Shareholders regarding the reappointment of Mr Gray and Mr Nurek one way or the other.
This is a matter which is best put to the vote.
10 Question 2.10 : Do the directors of Randgold accept that, to the extent that any of them are also directors of JCI, they should be precluded from voting on any resolution regarding the conduct of the mediation process with JCI or any subsequent arbitration or litigation process against JCI; or any resolution pertaining to the settlement of the Randgold claims and JCI claims (if any)?
None of the Directors of Randgold believe that they are precluded from voting on any resolution regarding the conduct of the mediation process with JCI or any process associated with mediation.
The Directors of Randgold will continue to act responsibly and in the best interests of Randgold.
Although the Board has no hesitation that it has acted responsibly throughout, as regards the manner in which it has handled the mediation process to date, following the appointment of Marais Steyn on 13 December 2006 to Randgold’s Board, Mr Steyn was given the portfolio of overseeing the mediation process and drawing from the input of his fellow Directors where he felt this was necessary. Although viewed as unnecessary, the Board put this in place as a sign of its commitment to act independently and free of criticism. (It is denied that any criticism is due).
11 Question 2.11 : If any of the directors of Randgold who are also directors of JCI do not accept that he (or she) should not be precluded from voting on any of the issues referred to in 2.10 above, the reason(s) for such views.
This is an internal matter and I do not intend to allow the individual views of Randgold’s Board of Directors to be laid before Shareholders.
The Board has acted and will continue to act (insofar as it is empowered), as it deems in the best interests of the Company.
Until the current Board is removed, they are entitled to manage the Company as they deem fit.
12 Question 2.12 : In an affidavit deposed to by the CEO of Randgold, Mr Peter Gray on 6 May 2006, Mr Gray stated as follows: “I deny that the Randgold Board has a manifest conflict of interests which in any manner precludes it from acting in the best interests of Shareholders” Is Mr Gray still of the view that the Randgold Board (or any of its directors) has no manifest conflict of interests, particularly in the light of:
2.12.1 the fact that the validity of the Investec Loan Agreement is currently under attack in two applications before the Johannesburg High Court and that a declaration by the Court to the effect that the agreement is invalid would redound to the benefit of Randgold (as a substantial creditor of JCI) while negatively impacting on Investec, thus placing the “Investec appointees” and “Investec directors” in a potentially invidious position.
2.12.2 The fact that those directors of Randgold who are also directors of JCI are effectively representing the interests of both the debtor and creditor companies in respect of the self-same Randgold claims which, if ultimately decided in favour of Randgold, could conceivably bring about the liquidation of JCI.
I have no doubt that if Mr Gray, or any of the other Directors for that matter, are of the view that a conflict exists, they, if there are any among them, will act responsibly and appropriately.
Beyond this, I am not going to allow for the individual views of Randgold’s Board Members to become the subject matter of Shareholder debate.
If the actions of the current Board do not meet with the approval of Randgold’s Shareholders, Shareholders are at liberty to reconstitute Randgold’s Board when voting on that issue takes place shortly.
13 Question 2.13 : Do the Investec appointees and directors on the Randgold Board and the JCI directors on the Randgold Board not consider themselves to have a conflict of interest particularly in regard to the issues highlighted in 2.12 above? If not, why not?
Randgold intends adopting a similar approach to that set out with reference to 2.12 above.
SECTION 3 : The convening of a Shareholders meeting in respect of Randgold to reconstitute its Board
1 Question 3.1 : In view of Mr Gray’s above-quoted statement on oath, why were Shareholders not given the opportunity at the general meeting of Randgold on 30 June 2006 to reconstitute Randgold’s Board?
The meeting of 30 June 2006 was not an Annual General Meeting.
Randgold’s Articles of Association only make provision for the reconstitution of Randgold’s Board at an Annual General Meeting.
Randgold called for additional nominations to its Board to fill casual vacancies which had arisen thereon by way of the Notice to Shareholders convening the General Meeting of 30 June 2006.
In response, Randgold received three nominations of prospective candidates to its Board.
One such candidate withdrew his willingness to stand. The other two candidates were ultimately appointed to Randgold’s Board in the form of Mr Blersch and Mr Dale.
All three nominations were made by Trinity Asset Management (Pty) Ltd.
2 Question 3.2 : Why was no Annual General Meeting held on 28 September 2006, as heralded in the aforesaid Notice, and why has no explanation been given to date to the Shareholders for the failure to convene such meeting?
Randgold was unable to hold its Annual General Meeting on 28 September 2006 due to the fact that its audited financial statements for the two years ended 31 December 2005, had not been completed by its auditors.
Although Randgold had hoped to convene its Annual General Meeting on 28 September 2006, this was always subject to the annual financial statements being available.
Randgold’s ability to finalise its annual financial statements was further impacted upon by:
2.1 Mr Lamprecht’s resignation as Randgold’s Financial Director in May 2006;
2.2 The ongoing mediation;
2.3 Mr Steyn’s appointment as Randgold’s Financial Director in December 2006 he having identified new issues which need analysis before Randgold’s financials may be prepared.
3 Question 3.3 : In as much as it was intended to convene an Annual General Meeting on 28 September 2006, why was a general meeting of Shareholders of Randgold in any event not convened on that date for the purposes of allowing Shareholders to reconstitute Randgold’s Board, particularly in the light of:
3.3.1 Mr Gray’s aforesaid statement on oath; and
3.3.2 The fact that a general meeting of JCI Shareholders was convened on 29 September 2006 at the same venue intended for the Randgold Annual General Meeting?
As already mentioned, two of the three nominations which were received following the General Meeting of 30 June 2006 resulted in the appointment of Mr Blersch and Mr Dale to Randgold’s Board of Directors with effect from 14 August 2006.
In these circumstances the Board decided that it was no longer necessary to convene a further General Meeting of Randgold’s Shareholders, hopeful that its financial statements would be forthcoming shortly, whereafter an Annual General Meeting could be convened.
Section 4: The derecognition by Randgold of the 5 460 000 shares and 900 000 shares in Randgold Resources Limited (“RRL”) and the sale of the 4 000 000 RRL shares as referred to at paragraph 2.3 on page 11 of the Notice of General Meeting, and the claims in favour of Randgold which may result in the circumstances.
In the light of such statement in the Notice of General Meeting, the following information and documentation are required:
4.1 Whether the “additional base claim of R222 million” forms part of the Randgold claims in the mediation process and, if so, what defence (if any) has been advanced by JCI thereto? If this claim does not form part of the Randgold claims in the mediation process, how does Randgold propose to prosecute such claim against JCI?
The so called “additional base claim of R222 million” is a matter which is the subject matter of mediation.
Accordingly Randgold is not prepared to comment in regard hereto.
4.2 All correspondence and documentation evidencing or relating to the claim in the sum of R222 million.
The correspondence and documentation which is being requested is privileged.
In the interests of preserving the integrity of the mediation process, the Board is not agreeable to acceding to the Requisitionists’ request herefor.
4.3 The identity of the foreign bank to which the 5 460 000 RRL shares were “on – lent”.
This is a matter which forms the subject matter of the mediation and is refused.
4.4 The whereabouts of the 5 460 000 RRL shares at present.
Again, this is a matter forming part of the mediation and such details are not furnished.
4.5 The efforts, if any, to recover the 5 460 000 RRL shares concerned or their current value and the success, if any, achieved to date in this regard.
Save to advise that Randgold is taking steps to recover the 5 460 000 RRL shares in the context of the mediation, the Board declines to comment further hereon.
4.6 What was the commercial rationale to Randgold or quid pro quo received by Randgold in respect of the borrowing by JCI of the said 5 460 000 RRL shares and the on – lending thereof to the foreign bank concerned?
The information being requested is also declined for the reasons already mentioned.
4.7 Did Randgold receive any security for the said 5 460 000 RRL shares? If so:
4.7.1 What was the nature and value of the security concerned; and
4.7.2 Is the security adequate; and
4.7.3 Did the foreign bank involved execute its security correctly; and
4.7.4 Has any attempt been made to exercise such security?
The Board is similarly not prepared to answer this question.
4.8 Was either the transaction regarding the initial borrowing of the shares by JCI or the transaction involving the on – lending thereof to the foreign bank concerned, ever authorised by Randgold? If so, a copy of such authorisation is requested.
The Board repeats that the matters under this section are the subject matter of the mediation and accordingly declines to answer.
4.9 All other correspondences and documentation relating to the initial borrowing of the shares and the on – lending thereof to the foreign bank concerned.
For the reasons already given, the correspondence and documentation sought is privileged and forms part of the mediation. For this reason the correspondence and documentation is not being made available.
4.10 The identity of the individual who purportedly held the 900 000 RRL shares.
This too is the subject matter of the mediation.
Accordingly the required details are not furnished other than to advise that necessary steps are being taken to recover the RRL shares or alternatively their value.
4.11 Has any commercial rationale or quid pro quo been identified in regard to the acquisition by the individual concerned of the 900 000 RRL shares and, if so, what is the rationale or quid pro quo?
For the reasons already mentioned, Randgold declines to comment further.
4.12 Did Randgold receive any security for the said 900 000 RRL shares? If so:
4.12.1 What was the nature and value of the security concerned; and
4.12.2 Is such security adequate; and
4.12.3 Was such security properly executed; and
4.12.4 Has any attempt been made to exercise such security;
Randgold is similarly not prepared to comment.
4.13 A description of the efforts made by Randgold’s Board to recover the said 900 000 RRL shares and the success, if any, achieved to date in this regard.
A recovery is being pursued against JCI. Independent action against third parties will be taken as Randgold may be advised.
4.14 Was the acquisition of the 900 000 RRL shares by the individual concerned ever authorised by Randgold? If so, a copy of such authorisation is requested.
The matters raised are the subject matter of contemplated litigation and are privileged.
Randgold declines to answer further.
4.15 All other correspondence and documentation relating to the acquisition by the individual concerned of the 900 000 RRL shares and the attempts by Randgold’s Board to recover same.
Randgold is currently taking advice on the formulation of a claim in regard hereto.
The making available at this stage of correspondence and documentation relative to this claim may compromise such intended action.
Furthermore, this is a matter which is being dealt with in the context of the mediation and the Board will not divulge information which may have the effect of undermining the mediation.
4.16 All correspondence and documentation pertaining to the pledge of such shares and the subsequent sale thereof.
For the reasons already given, Randgold is not agreeable to making available the correspondence and documentation sought.
4.17 Is the claim of R412 million (being the proceeds of the 4 000 000 RRL pledged shares) included as part of Randgold’s claims in the mediation process and, if so, what is the defence advanced thereto by JCI? If such claim has not been prosecuted as part of the mediation process, how is it proposed that the claim of R412 million be prosecuted against JCI?
This is a further matter which is the subject matter of the mediation.
In the result, it is not appropriate that Randgold divulge further information in regard hereto.
4.18 Has any commercial rationale or quid pro quo for the pledge to and sale by the foreign bank concerned of the 4 000 000 RRL shares been identified and if so what is the rationale or quid pro quo concerned?
An answer to this question would undermine the mediation. Accordingly Randgold declines to answer this question.
4.19 Was any authority given by Randgold for the pledge and subsequent sale of such shares? If so, a copy of such authorisation is requested.
The questions regarding the 4 000 000 RRL shares traverse matters which are being dealt with in the context of the mediation. Randgold declines to answer.
4.20 All other correspondence and documentation relating to the pledge to and sale by the foreign bank concerned of the 4 000 000 RRL shares.
No documentation and correspondence is made available for the reasons which have already been advanced.
4.21 To the extent that the above-quoted paragraph 2.3 of the Notice of General Meeting distinguishes between claims by Randgold against CMMS (Consolidated Mining Management Services Limited) and JCI, kindly advise as to whether the claims against CMMS have been included as part of the Randgold claims to be dealt with in the mediation process. If not, have the claims against CMMS been prosecuted against it and in what forum? If not, why not, and when is it envisaged that such claims will be prosecuted?
The Mediation Agreement contemplated that those claims enjoyed by Randgold against JCI would include all and any claims enjoyed by Randgold against JCI’s subsidiary and/or associate companies.
CMMS is a subsidiary company of JCI and those claims which Randgold enjoys against CMMS have been proffered against JCI on the basis of the understanding between Randgold and JCI that JCI would be liable.
In view of the mediation, Randgold declines to comment further.
SECTION 5 : The preparation of Randgold’s audited financial statements and Randgold’s financial position
1 Question 5.1 : It was stated at page 6 of the Notice of General Meeting that “subject to the timeous completion” of the audited financial statements of Randgold the Annual General Meeting of the Shareholders of Randgold would be held on 28 September 2006. In the circumstances, why have such financial statements not been prepared timeously (or at all) and why has no explanation been given by Randgold’s Board for such failure?
I have already touched on the reasons which have impacted on Randgold’s ability to publish annual financial statements.
To the extent that they were not clear, Randgold repeats that:
1.1 Randgold’s erstwhile Financial Director Chris Lamprecht resigned in May 2006. This brought about the challenge of finding a replacement for Mr Lamprecht in circumstances where prospective candidates were reluctant to take up the appointment as Randgold’s Financial Director;
1.2 Following the appointment of Mr Marais Steyn, he identified new issues which are in the process of being investigated and had not previously been identified.
1.3 The progress in the mediation process which has been slower than originally anticipated has also impacted upon Randgold’s ability to finalise its financial statements.
Once a suitable settlement is achieved which carries the approval of Randgold’s Shareholders and the outstanding issues addressed, Randgold intends to move forward to prepare its financial statements as soon as possible.
2 Question 5.2 : What is Randgold’s current nett asset value (“NAV”) and what proportion of such NAV is attributable to the Randgold claims and what proportion is attributable to other assets?
Randgold is yet to finalise its audited financial statements for the two years ending 31 December 2005.
Shareholders are referred to Randgold’s unaudited unreviewed Annual Financial Statements as published on 31 March 2006, wherein Randgold’s unaudited unreviewed nett asset value was proposed to amount to approximately R674 000 000.00.
Randgold’s Board’s preliminary unaudited qualified view of Randgold’s nett asset value remains consistent with the views expressed by management therein.
Given that Randgold’s claims against JCI in the context of the mediation have not been proved, it would be irresponsible to venture a comment in regard to what proportion of Randgold’s NAV is ascribable to the Randgold claims.
3 Question 5.3 : What is the current market value of the shares and other assets apparently misappropriated from Randgold and to what extent, if any, have such shares and assets been recovered by Randgold?
A possible value of the shares and other assets misappropriated from Randgold is in line with its claim value of some R5 800 000 000. No assurance however can be given as to whether Randgold’s claims will be successfully prosecuted.
Shareholders are well aware that Randgold is engaged in the mediation and Shareholders are assured that Randgold is furthermore pursuing a variety of legal processes against other persons who wronged Randgold, the progress in respect of which, Shareholders will be informed of, as and when further recoveries are made.
4 Question 5.4 : What would the NAV of Randgold have been as at 31 December 2006, had Randgold not been the victim of the transactions referred to in the quoted paragraph 2.3 of the Notice of general meetings (at Section 4 above) or any other transaction identified by the Randgold Board as fraudulent?
It would be foolhardy to hypothesise on what the NAV of Randgold would have been, had it not been the victim of the transactions contemplated.
A myriad of factors could have a bearing hereon and it is irresponsible to venture comment in regard hereto..
SECTION 6 : Investigations into the culpability of third parties (if any)
1 Question 6.1 : Has any investigation been mandated or conducted into the culpability (if any), of the stockbroker firms through whom the various shares misappropriated from Randgold were sold, or any of the Banks or other third parties who in any way, dealt with such shares or may have been responsible for aiding and abetting such misappropriation? If so, what is the current status of such investigation(s)? If no such investigation has been mandated by Randgold’s Board, what is the explanation for such omission?
• The Board of Randgold is, in conjunction with its forensic auditors and legal advisors in the process of identifying which third parties ought to be pursued.
• To the extent that it is economically feasible and the Board is in agreement herewith, such third parties will be pursued and action instituted against them.
• Randgold will pursue each and every person who has wronged it, provided that it is not imprudent to do so and based upon legal advice as to our prospects of success..
• If Shareholders are dissatisfied with the level of progress to date, they now have the opportunity of casting their votes in respect of the reconstitution of Randgold’s Board.
The aforegoing constitutes all of the questions posed by the Requisitioners and the Randgold Board’s responses thereto. Both the questions and the responses will be posted on Randgold’s website as soon as is reasonably practicable so that all shareholders can have access thereto. Should any shareholders have any further questions or follow u

Joint announcement to R&E and JCI shareholders relating to a statement by the mediators in the mediation between the companies; a postscript thereto and further renewal of cautionary announcement

Posted on
  1. Shareholders of R&E and JCI are referred to the joint cautionary announcement published on 23 February 2007.
  2. At the request of the Mediators, Advocate S Burger SC, Mr. C. Nupen and Prof. H. Weiner, the Statement issued by the Mediators on 28 February 2007 and the Postscript thereto, dated 5 March 2007 are published by the respective Boards of Directors of R&E and JCI.
  3. Regard being had to the fact that the matter has not been finally resolved, shareholders of R&E and JCI are advised that they should continue to exercise caution when trading in their shares over the counter.

FORWARD-LOOKING STATEMENT DISCLAIMER FOR R&E

Certain statements in this announcement, as well as oral statements that may be made by R&E’s officers, directors or employees acting on its behalf relating to such information, contain ”forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, specifically Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All statements, other than statements of historical facts, are ”forward-looking statements”. These include, without limitation, those statements concerning the fraud and misappropriation that are alleged to have occurred and the time periods affected thereby; the ability of R&E to recover any misappropriated assets and investments; the outcome of any proceedings on behalf of, or against R&E; R&E’s ability to complete its forensic investigation and prepare audited financial statements; the time period for completing its forensic investigation and audited financial statements; the amount of any claims R&E is or is not able to recover against others, including JCI and the success of its mediation with JCI; and the ultimate impact on R&E’s previously released financial statements and results, assets and investments, including with respect to Randgold Resources Limited, business, operations, economic performance, financial condition, outlook and trading markets. Although R&E believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct, particularly in light of the extent of the alleged frauds and misappropriations uncovered to date. Actual results could differ materially from those implied by or set out in the forward-looking statements.

Among other factors, these include the extent, magnitude and scope of any fraud and misappropriation that may be ultimately determined to have occurred and the time periods and facts related thereto following the completion of the forensic investigation and any other investigations that may be commenced and the ultimate outcome of such forensic investigation; the ability of R&E to successfully assert any claims it may have against other parties for fraud or misappropriation of R&E assets or otherwise and the solvency of any such parties, including JCI; the determinations of the mediators and acceptance of any such determinations by the shareholders of R&E and JCI; the ability of R&E to defend successfully any counterclaims or proceedings against it; the ability of R&E and its forensic investigators to obtain the necessary information with respect to R&E’s transactions, assets, investments, subsidiaries and associated entities to complete the forensic investigation and prepare audited financial statements; the willingness and ability of R&E’s forensic investigators and auditors to issue any final opinions with respect thereto; the ability of R&E to implement improved systems and to correct its late reporting; the JSE Limited’s willingness to lift its suspension of the trading of R&E’s securities on that exchange; changes in economic and market conditions; fluctuations in commodity prices and exchange rates; the success of any business and operating initiatives, including any mining rights; changes in the regulatory environment and other government actions; business and operational risk management; other matters not yet known to R&E or not currently considered material by R&E; and the risks identified in Item 3 of R&E’s most recent annual report on Form 20-F filed with the SEC and its other filings and submissions with the SEC. All forward-looking statements attributable to R&E, or persons acting on its behalf, are qualified in their entirety by these cautionary statements. R&E expressly disclaims any obligation to release publicly any update or revisions to any forward-looking statements to reflect any changes in expectations, or any change in events or circumstances on which those statements are based, unless otherwise required by law.

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