In the media

Blyvoor prov judicial management order lifted

13 April 2010

Source: www.miningmx.com

Author: I-Net Bridge

South African marginal gold producer DRDGold on Tuesday announced that the High Court of South Africa has agreed to lift, with immediate effect, the provisional judicial management order over the company's 74%-owned Blyvooruitzicht Gold Mining Company (Blyvoor).

Blyvoor has been under provisional juducual management since November last year.

"The provisional judicial management of Blyvoor has been a success; the company is able to pay its debts as and when they fall due for payment; it has turned the corner and is, once again, a successful concern," DRDGold CEO Niël Pretorius said.

In the company's application for the court to lift the order, DRDGold pointed out that Blyvoor has traded at an unaudited profit of R33.6m for the three months from November 2009 to February 2010.

Trade creditors at the time when the provisional judicial management order was granted have been reduced from R39m to R2.17m and the monthly production of gold has increased from 272kg to 315kg, with the gold price in rand terms increasing from R240 000/kg to R265 000/kg.

Pretorius said the four judicial managers appointed by the court, supported its application for the lifting of the provisional judicial management order, on condition that DRDGold's provision of a R15m facility to Blyvoor remains in place.

This facility was available from November 2009 but was not accessed.

DRDGold originally applied for the order following several months of increasing operational and financial stress experienced by Blyvoor.

The troubles faced by Blyvoor at the time included a series of seismic events during May 2009 which caused a substantial drop in mining production; a 33% rate increase imposed by power utility Eskom during July 2009; a protracted labour strike; and a sharp decline in the gold price between February and May 2009, from R317 000/kg to R240 000/kg.