DRDGOLD announces granting of judicial management order over Blyvoor; reports improved monthly performance by all other operations
12 November 2009
Johannesburg, South Africa. 12 November 2009. DRDGOLD Limited (JSE: DRD; Nasdaq: DROOY) announced today that the High Court of South Africa has approved its application for a judicial management order over the companys 74%-owned Blyvoor operation.
On Monday this week DRDGOLD announced its intention to seek the order to prevent liquidation of Blyvoor, which has been in a loss-making position since May 2009.
The High Court granted a provisional judicial management order, in terms of the Companies Act, on Tuesday.
DRDGOLD Chief Executive Officer Nil Pretorius said: "We are confident that judicial management offers the best possible prospect of preventing Blyvoors liquidation and of restoring the operation to financial health, all the while protecting the interests of all stakeholders of both Blyvoor and DRDGOLD.
"Meanwhile, in line with DRDGOLDs strategic shift towards lower-risk, lower-cost, high-margin production, the companys surface retreatment operations - which are unaffected by developments at Blyvoor - delivered an increase in gold production of more than 9% in October compared with September, from 10 160 ounces to 11 092 ounces. These surface operations now deliver 66% of DRDGOLDs production and their proportion of the total is expected to continue to rise.
"While Blyvoors surface production was stable month on month, Crown and ERPM were marginally higher with ErgoGold, increasing by almost 38%."
Pretorius said that, to accelerate production build-up at ErgoGold, a further R8 million had been approved to bring forward commissioning of a second pipeline feed from the Elsburg Tailings Complex to the Brakpan plant.
Construction, previously reported, of a pilot plant to optimise the feed mix to the Brakpan plant had been completed and was working well, Pretorius said.
The effect of the Blyvoor provisional judicial management order is that:
- management of Blyvoor will become the responsibility of a provisional judicial manager to be appointed by the Master of the High Court within a few days time;
- the provisional judicial manager will manage Blyvoor until 16 March 2010 when he/she will present to the court a report on the performance of the business;
- on or prior to 16 March 2010 interested and affected parties may approach the court and provide reasons why the order should be dismissed or confirmed as final. If the order is confirmed, then a final judicial management order will be made by the Court;
- If, at any stage prior to 16 March 2010, Blyvoor becomes profitable, any interested and affected party, including DRDGOLD, may bring an application before the Court to lift the provisional order.
South Africa & North America
James Duncan, Russell & Associates
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Phil Dexter, St Jamess Corporate Services
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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.
These risks include, without limitation, those described in the section entitled "Risk Factors" included in our annual report for the fiscal year ended 30 June 2008, which we filed with the United States Securities and Exchange Commission on 12 December 2008 on Form 20-F. You should not place undue reliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to the occurrence of unanticipated events.