DRDGOLD buys balance of Ergo JV from Mintails for R82 million
21 January 2010
Johannesburg, South Africa. 21 January 2010. DRDGOLD Limited (JSE: DRD; Nasdaq: DROOY) announced today that it has agreed a transaction with Mintails Limited (Mintails) worth a total of R82 088 321, in terms of which DRDGOLD will acquire Mintails’ 50% interest in Ergo Mining (Pty) Limited (Ergo).
Ergo was created as a 50:50 joint venture by DRDGOLD and Mintails in November 2007 to explore, evaluate and process up to 1.7 billion tonnes of surface gold-, uranium- and sulphur-bearing tailings from the East and Central Rand goldfields of South Africa.
DRDGOLD CEO Niël Pretorius said: “This transaction, which I believe the market has been anticipating, marks the next logical step in DRDGOLD’s strategy to expand its surface tailings reclamation footprint. Gaining access to the second CIL circuit at Ergo’s Brakpan plant effectively doubles the volume capacity to which we have access, and provides options in respect of resources we control in and around central Johannesburg and Boksburg.”
Pretorius said that DRDGOLD would also continue to explore prospects for uranium and sulphur production through the Brakpan plant.
DRDGOLD will settle the R82 088 321 consideration with a three-tranche payment of R62 088 321 from its cash reserves, and with its shares in the Witfontein tailings deposition site on the far West Rand, valued at R20 million.
DRDGOLD has wholly owned the gold circuit of Ergo, now known as ErgoGold, since December 2008, having acquired Mintails’ 50% interest in two separate transactions worth a total of R277 million.
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