Durban Roodepoort Deep, Limited (DRD), established in South Africa in 1895, is the country’s oldest gold mining company still in existence. It is a public company with primary listings on the Johannesburg and Australian stock exchanges and secondary listings on NASDAQ, the London Stock Exchange and the Paris and Brussels Bourses. Its shares are also traded on the regulated unofficial market of the Frankfurt Stock Exchange and the Berlin OTC Market.

   Its key assets in South Africa are:

the wholly-owned Blyvooruitzicht Mine and North West Operations (comprising Hartebeestfontein and Buffelsfontein mines); 40% of Crown Gold Recoveries (comprising East Rand Proprietary Mines Limited and the Crown dump retreatment operation); and The brownfields Argonaut Project, south of Johannesburg.    And in Australasia: the wholly-owned Tolukuma mine in Papua New Guinea; and 19.81% of Fijian operator Emperor Mines Limited.

   In recent years, DRD has distinguished itself as a marginal miner, acquiring operations rejected as unprofitable by majors and seeking to turn them to account through “emergency room” and “intensive care unit” styles of management. Invariably, this has meant throwing out many of the stereotypes in South African deep-level mining and creating new paradigms. The fourth-largest gold producer in South Africa and 12th largest in the world, at year-end DRD employed some 24 000 people.

   The company began emerging 18 months ago from a protracted spell of operating and financial embattlement, compounded by a track record of poor corporate governance. In the 2003 financial year, total attributable gold production from its South African and Australasian investments was 870 000 ounces, generating profit of some R371 million. US$120 million was spent on buying back the company’s crippling hedge book and months of exposure to the strengthening US$ spot gold price saw market capitalisation at R3.6 billion (US$464 million) at year-end, notwithstanding an unforeseen strengthening in the South African Rand.

   On-going work to restore sound corporate governance includes the creation of a board with an acceptable level of independence and the recovery of misappropriated shareholders’ funds through litigation, both in South Africa and Australia.

   DRD was a forerunner in black economic empowerment (BEE) in the South African mining industry through the sale of 60% of its Crown Gold Recoveries (CGR) operation and a 3% stake of itself to Khumo Bathong Holdings (KBH). In October 2002, in advance of the Mining Charter, which sets BEE targets for the mining sector, DRD strengthened its BEE position through its 40% participation in CGR’s acquisition of East Rand Proprietary Mines Limited (ERPM) for R100 million.

   During the 2003 financial year, buoyed by its improving fortunes, DRD embarked on Project Boost, an ambitious organic- and acquisitions-based growth plan which has cost reductions and production and reserve increases high on its list of priorities. The company successfully raised US$66 million through an innovative convertible bond issue in November to fund the Project Boost initiative and within weeks had acquired an initial 14% stake in Emperor, owner and operator of the the Vatukoula gold mine in Fiji. It subsequently increased the holding to 19.81%.