DRDGOLD sells ERPM prospecting right to White Water Resources
30 June 2010
Johannesburg, 30 June 2010. DRDGOLD Limited (JSE: DRD; NASDAQ: DROOY) announced today that it has signed heads of agreement with JSE-listed White Water Resources Limited in terms of which White Water Resources will acquire from DRDGOLDs 74%-owned subsidiary, East Rand Proprietary Mines Limited (ERPM), the prospecting right over ERPM Extensions 1 and 2 and the mining right over ERPM Extension 1.
ERPMs mining right application over Extension 1 is pending.
Both extensions are contiguous to the ERPM lease area. Underground mining at ERPM was discontinued in November 2008.
The acquisition by White Water Resources of the prospecting right over ERPM Extensions 1 and 2 and the mining right over ERPM Extension 1 for R18.5 million will be settled through the issue to ERPM of 74 million ordinary shares in White Water Resources and 26 shares in a special purpose vehicle (SPV) to be created, which will hold the assets acquired by White Water Resources from ERPM in terms of the transaction.
In the event that the Department of Mineral Resources does not approve transfer of one or other of the prospecting or mining rights, the consideration will be reduced to R9.3 million to be settled through the issue to ERPM of 37 million ordinary shares in White Water Resources and 26 ordinary shares in the SPV.
The transaction is subject to the successful conclusion of various conditions precedent, including its approval by White Water Resources shareholders.
DRDGOLDs Chief Executive Officer, Niël Pretorius, said: Our stated strategy is to move increasingly towards gold recovery from re-treatment of surface tailings; the deep-level exploration assets we propose disposing of are much better placed in the portfolio of White Water Resources, whose business is gold exploration.
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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.
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