DRDGOLD, BEE partners sign new agreement
18 March 2014
Johannesburg, South Africa. 18 March 2014. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) announced today that it has reached agreement with its black economic empowerment (BEE) partners, Khumo Gold SPV (Proprietary) Limited (Khumo) and the DRDSA Empowerment Trust (DRDSA Trust) to substitute the BEE structure that has been in place since 2005 with a new arrangement.
Currently, DRDGOLD’s BEE partners hold shares at an operating level through the company’s subsidiary, Ergo Mining Operations (Pty) Ltd (EMO). Khumo holds 20% of EMO, while the DRDSA Trust has a 6% stake.
In terms of the agreement announced today, Khumo and the DRDSA Trust will exchange their interest in EMO for 35 000 000 and 10 500 000 new DRDGOLD ordinary shares respectively. The total value of the transaction based on the aforementioned ratio and at the share value agreed for the exchange is R191 100 000.
The effect of the agreement is to give Khumo an 8.1% interest and the DRDSA Trust a 2.4% interest in DRDGOLD – the listed, holding entity.
DRDGOLD says, in support of the new arrangement, that it ensures regulatory compliance in respect of existing mining rights. It also provides Khumo and the DRDSA Trust with the ability to realise the value of their interests in EMO on the Johannesburg Stock Exchange, which is a liquid market and most likely to provide fair value, thereby furthering the objectives of BEE in South Africa. The transaction has the added benefit of introducing operational and capital management flexibility for DRDGOLD over its core business.
The conclusion of the agreement is subject to the fulfilment of a number of conditions, in particular:
- DRDGOLD procuring from the Department of Mineral Resources (DMR) consent in terms of the provisions of Section 102 of the Mineral and Petroleum Resources Development Act (MPRDA), which will ensure that the mining and prospecting rights currently held by the DRDGOLD group are not compromised as a result of dilution in its BEE ownership credentials; and
- shareholder approval.
Khumo and the DRDSA Trust have both agreed to a ‘lock-in period’ of three years, during which they may not dispose of their interests in DRDGOLD, thus providing increased certainty regarding their participation as DRDGOLD’s BEE partners.
For more detailed information and the financial effects of this transaction, refer to the SENS announcement under the section SENS News.
South Africa & North America
James Duncan, Russell and Associates
+27 11 880 3924 (office)
+27 (0) 79 336 4010 (mobile)
Investor and Media Relations
Phil Dexter, St James’s Corporate Services
+44 (0) 20 7796 8644 (office)
+44 (0) 779 863 4398 (mobile)
For more information, please visit www.drdgold.com
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 2013, which we filed with the United States Securities and Exchange Commission on 25 October 2013 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.