Acquisition by DRDGOLD SA of additional 15% interest in Elsburg Gold Mining Joint Venture
03 October 2008
Johannesburg, South Africa, 3 October 2008. DRDGOLD Limited (JSE: DRD; NASDAQ: DROO) announced today that its 74%-held subsidiary, DRDGOLD South African Operations (Pty) Limited (DRDGOLD SA), has acquired for R100 million a further 15% in the Elsburg Gold Mining Joint Venture (Elsburg JV) from Mintails SA (Pty Limited (Mintails SA), a wholly owned subsidiary of Mintails Limited (Mintails).
The Elsburg JV, initially a 50:50 joint venture between DRDGOLD SA and Mintails SA, involves gold recovery and processing from the Elsburg Tailings Complex on South Africa’s East Rand.
The Elsburg JV forms part of the 50:50 Ergo Joint Venture (Ergo JV) between the parties, which was established to process some 1.7 billion tonnes of surface gold-, uranium- and sulphur-bearing tailings on the Central and East Rand.
DRDGOLD SA will now hold a 65% interest in the Elsburg JV and Mintails SA, 35%.
In addition, Mintails has granted DRDGOLD SA a conditional option – exercisable between 1 and 15 January 2009 – to acquire a further 11.4% interest in Elsburg for R75.9 million.
The 50:50 interests of DRDGOLD SA and Mintails SA in the Ergo JV are not affected by the acquisition and remain unchanged.
Although The Elsburg JV is scheduled to commission the Brakpan Plant early in October, both joint ventures require significant capital investment as the projects continue.
Mintails has agreed, through its subsidiaries, to apply the purchase consideration and any proceeds from the exercise of the option towards the partial fulfillment of such capital requirements as follows:
- approximately R52.4 million for the capital required by the Elsburg JV (with an additional R 52.1 million should the option be exercised);
- approximately R17.4 million for the refurbishment of the CIL gold circuit which is to be used by the Elsburg JV; and
- approximately R30.2 million for the capital required by the Ergo JV (with an additional R23.8 million should the option be exercised).
DRDGOLD CEO John Sayers commented: “The acquisition we have announced today facilitates the advancement of both the Elsburg and Ergo JVs. Also, it is consistent with DRDGOLD’s stated intention of focusing on its South African gold operations and, in particular, its surface dump retreatment operations.”
James Duncan, Russell & Associates
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)
Investor and Media Relations
Barbara Cano, Breakstone Group International
+1 646 452 2334 (office)
Investor and Media Relations
Phil Dexter, St James's Corporate Services
+44 20 7499 3916 (office)
+44 779 863 4398 (mobile)
For more information, please visit www.drdgold.com
Many factors could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in the gold price, a continuing strengthening of the rand against the dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licences or other governmental approvals, changes in DRDGOLD's competitive position, changes in business strategy, any major disruption in production at key facilities or adverse changes in foreign exchange rates and various other factors.
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