TORONTO (miningweekly.com) – TSX- and Aim-listed Moto Goldmines confirmed on Monday that a buyout plan proposed by Randgold Resources represents a “superior” transaction to an agreement currently in place with Canadian suitor Red Back Mining.

Moto, which owns 70% of the giant Moto gold project, in the Democratic Republic of Congo (DRC), said Red Back will now have five business days – until midnight on August 4 – to sweeten its offer, in which each outstanding common share of Moto would be exchanged for 0,45 of a common share of Red Back.

Vancouver-based Red Back Mining owns two gold mines, Chirano in Ghana and Tasiast in Mauritania, as well as some projects in Ghana.

If the firm does not choose to amend its offer within the five-day period, Moto plans to terminate their agreement, pay the C$15,25-million break fee and accept Randgold's offer, the company said.

Randgold announced on July 16 that it would present a rival proposal to Moto, comprising either 0,07061 of a Randgold share or $4,47 for each Moto share.

Moto shareholders could elect to receive either Randgold shares, American depositary shares or cash, but the cash portion of the transaction would be capped at $244-million.

Separately, Randgold inked an agreement with larger rival AngloGold Ashanti, which, if the proposed acquisition is successful, will fund the cash portion of the transaction as partial payment for an indirect 50% interest in Moto.

The companies will cofund the development of the Moto project and Randgold will be the mine's operator.

Randgold, which mines gold in Mali and is building a new operation in the Côte d'Ivoire, said on Monday that, based on closing share prices and exchange rates on June 24, its offer valued Moto shares at C$5,01 apiece, while the Red Back deal only valued Moto at C$4,50 a share.

Randgold is also offering the “certain value” of a cash election, it said.

The company said it has support from shareholders of Moto representing 36,1% of the issued and outstanding common shares of Moto to vote in favour of its offer and to vote against the Red Back transaction, if it is not withdrawn, as well as formal written support from the government of the DRC.

Randgold argues that it, together with AngloGold, has superior operational and regional experience to bring the Moto project into production.

The two companies already co-own the Morila gold mine, in Mali, which is operated by Randgold.

Based on a March 2009 feasibility study, the Moto gold project contains 42,3-million tons of reserves, at 4 g/t of gold, for 5,5-million ounces of gold.

The study was adjusted from an earlier report, to include plans for a high-grade underground mine, in addition to the openpit operation.

The mine, which will be the largest gold mine in the DRC, is expected to have a life of 16 years, producing a total of 4,8-million ounces, and cost $438-million to build, including contingencies.

Average annual production in the first five years of operation is estimated at 484 000 oz/y of gold, at an average unit cash cost of $303/oz, Moto said in March.