Ergo transaction gets competition commision approval
15 April 2010
Johannesburg, South Africa. 15 April 2010. DRDGOLD Limited (JSE: DRD; Nasdaq: DROOY) announced today that South African Competition Commission approval has been obtained for its acquisition of the 50% equity interest of Mintails Limited (Mintails) 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 announced on 21 January 2010 that it had agreed to acquire subject to certain suspensive conditions, including Competition Commission approval Mintails' 50% of Ergo for a total consideration of R82 088 321; R62 088 321 to be settled in cash and the balance in shares in the Witfontein tailings deposition site on the Far West Rand valued at R20 000 000.
All of the suspensive conditions relating to the transaction have now been met.
DRDGOLD has wholly owned the gold circuit of Ergo, known as ErgoGold, since December 2008, having acquired Mintails' 50% interest in two separate transactions worth a total of R277 million.
DRDGOLD CEO Niël Pretorius said: "Full ownership of Ergo is a major step in our strategic shift towards lower-risk, lower-cost, higher-margin gold production from surface sources, providing a key, logistical platform for substantial future growth through exploitation of synergies with our Crown surface operation".
Pretorius said DRDGOLD would also continue to explore prospects for uranium and sulphur production through Ergo's Brakpan plant
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