DRDGOLD restructures to consolidate surface retreatment operations
03 July 2012
Johannesburg, South Africa. 3 July 2012. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) has announced a change in its group structure, consolidating all of its surface retreatment operations.
DRDGOLD CEO Niël Pretorius said the new, simpler structure will result in the company's surface retreatment operations being housed in a single entity, Ergo Mining (Pty) Limited (Ergo).
Ergo is a wholly-owned subsidiary of Ergo Mining Operations (Pty) Limited (EMO) - previously DRDGOLD SA Operations (Pty) Limited (DRDGOLD SA). EMO is 74% held by DRDGOLD, 20% by its black economic empowerment (BEE) partner, Khumo Gold SPV (Pty) Limited (Khumo Gold) and 6% by the DRDSA Empowerment Trust.
"We expect the restructuring to result in improved synergies and cost savings; also, it places DRDGOLD in full compliance with the BEE ownership target specified in the Mining Charter," Pretorius said.
Various transactions to give effect to the restructuring have been entered into, in terms of which:
- DRDGOLD will sell its 35% direct interest in the ErgoGold unincorporated partnership (ErgoGold; previously the Elsburg Gold Mining Joint Venture) to Ergo for R200 million on loan account;
- Crown Gold Recoveries (Pty) Limited (Crown) will sell its mining assets (excluding its 50% interest in Ergo), mining and prospecting rights and certain liabilities to Ergo in exchange for shares in Ergo;
- East Rand Proprietary Mines Limited (ERPM) will sell all of its surface mining assets (excluding its 50% interest in Ergo) and its 65% interest in ErgoGold to Ergo in exchange for shares in Ergo; and
- Crown and ERPM will distribute their entire holdings in Ergo to sole shareholder EMO.
Consequently, EMO will hold 100% of Ergo.
All conditions for DRDGOLD's disposal of its 35% direct ErgoGold interest have been met. The ERPM and Crown disposals are subject to the consent of the Minister of Mineral Resources in terms of section 11 (1) of the Mineral and Petroleum Resources Development Act (MPRDA).
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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 sustained strengthening of the Rand against the Dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licenses 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 2011, which we filed with the United States Securities and Exchange Commission on 28 October 2011 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. Any forward-looking statement included in this report have not been reviewed and reported on by DRDGOLD’s auditors.