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Moto's Got Gold Mining Mojo

Christopher Barker
October 20, 2009

Austin Powers had to travel back in time and go to the moon to get his mojo back. A couple of gold miners may not have to go to such lengths.

The mergers and acquisitions scene among miners of precious metals continues to sizzle, with African miners Randgold Resources (Nasdaq: GOLD  ) and AngloGold Ashanti (NYSE: AU  ) completing their joint venture transaction announced last August to acquire all shares of junior Moto Goldmines. The joint venture controls 70% of the Moto gold mine in the Congo, with a Congolese government entity retaining 30%. Randgold Resources will take the lead as operating partner, and this week it announced its intention to fast-track the mine's development process.

At stake is an undeveloped gold resource that is considered one of the best on the entire African continent. Moto boasts more than 11.3 million ounces of indicated gold resources, and a further 11.2 million ounces in the inferred category. An existing feasibility study completed last March established economically viable ("probable") reserves of at least 5.5 million ounces, and Randgold has identified the completion of a second feasibility study as priority No. 1 (not to be confused with Robert Wagner's "No. 2," baby!).

Cruising along near 52-week highs, it may seem a stretch to suggest that Randgold and Anglogold have lost their mojo, but this Fool has expressed caution for both equities relating to their oppressive hedge books, and in the case of Randgold, some unfortunate additional exposure to