London, Oct 25, GNA- Randgold Resources of South Africa, one of the two mining companies out to win control of Ghana's mining giant, Ashanti Goldfields Company (AGC) has increased its bid to 1.7 billion dollars up from the previous figure of 1.5 billion dollars.

The new offer equates to about a premium of 10.3 per cent of the closing price of Ashanti for a premium of 12.3 per cent to the current value of AngloGold's proposed improved final offer of 1.4 billion dollars announced on 14 October.

Lonmin, which owns about 28 per cent of Ashanti had earlier said it will not accept or support any proposal from Randgold unless it includes a fully written cash alternative.

Both bids however await the permission of the Ghanaian government, which has so far given the "thinking" to Societe General.

A statement issued by Randgold and made available to the Ghana News Agency in London on Friday, indicated that on completion of the merger, existing Randgold shareholders will own about 27.4 per cent and existing Ashanti shareholders will own about 72.6 per cent of the enlarged business.

"Besides every 0.56 Randgold shares will go for each Ashanti share, valuing the company at about 1.7 billion dollars, saying that, " based on the closing price of Randgold, American Depository Receipts on the Nasdaq on Thursday of 22.45 dollars, the increased merger offer puts each Ashanti Share at about 12.57 dollars."

AGC has seen a lot of interest following increasing interest in the Ashanti Deeps touted to produce about 5,000 ounces of gold annually for more than 20 years.

Randgold said, " it believes that the increased merger offer represents a genuine and attractive alternative to the improved final offer proposed by AngloGold. There can be no guarantee that an agreement between Randgold and Ashanti will be reached or that the merger will be effected. Further announcements will be made in due course, as appropriate," the statement added.

Randgold is offering one of its shares for every two Ashanti shares while AngloGold's offer is for the exchange of 26 of its shares for every 100 Ashanti shares.

Ashanti assets have over the years become important for both parties. For Anglogold, Ashanti assets could raise the diversification of its mining assets and probably enhance the market rating of its entire asset base while Randgold could use a win to step up from being a mining minor to new a strong producer with a huge resource and reserve base.