Media releases

DRDGOLD, KBH agree further bee transaction

Details

Published: Thursday, 28 July 2005 02:00

DRDGOLD and black-owned Khumo Bathong Holdings (Pty) Limited (KBH) announced today that they have signed a Memorandum of Understanding (MOU) regarding the acquisition by KBH of a 15% stake in DRDGOLD’s South African operations.
Johannesburg, South Africa. 28 July 2005. DRDGOLD Limited (JSE: DRD; NASDAQ: DROOY; ASX: DRD; POM SoX: DRD) and black-owned Khumo Bathong Holdings (Pty) Limited (KBH) announced today that they have signed a Memorandum of Understanding (MOU) regarding the acquisition by KBH of a 15% stake in DRDGOLD’s South African operations.

DRDGOLD Chief Executive Officer Mark Wellesley Wood said the successful conclusion of the transaction would be “a logical step forward” from DRDGOLD’s historic Black Economic Empowerment deal with KBH in February 2002, when KBH acquired a 60% stake in DRDGOLD’s Crown Gold Recoveries (Pty) Limited (CGR).

Wellesley-Wood said the transaction envisages the exchange of 45% of KBH’s 60% stake in CGR and East Rand Proprietary Mines Limited (ERPM) for 15% of DRDGOLD’s wholly owned Blyvooruitzicht Gold Mining Company Limited. The effect would be the ownership by KBH of 15% of all of DRDGOLD’s South African operations. DRDGOLD intends to facilitate the BEE transaction through vendor financing.

KBH Chairman Dr Paseka Ncholo, who is also Non-executive Chairman of DRDGOLD, said the MOU included an option for KBH to lead a broad-based consortium in the acquisition of a further 11% in DRDGOLD’s South African operations.

The intention would be to bring DRDGOLD into full compliance with the 10-year, 26% BEE equity requirement contained in the Mining Charter.

“DRDGOLD in South Africa, with its substantial reserve and resource position, will pursue further brownfield gold mining opportunities in the country, applying a new, pared-back mining model well-suited to the mature profile of the industry, while continuing to fulfill its well established role with the international investing community as a highly leveraged option on the gold price,” Ncholo said.

Due to Ncholo’s directorship in DRDGOLD, the BEE transaction will be a related party transaction. It will therefore be subject to regulatory approvals and to confirmation by an appointed, independent expert that it is fair and reasonable to DRDGOLD shareholders.

In a move related to the overall restructuring of DRDGOLD’s South African interests – specifically to position CGR’s Crown surface and ERPM operations for growth – DRDGOLD has acquired from the Industrial Development Corporation (IDC) all of its CGR and ERPM debt through the issue of 4 451 219 DRDGOLD shares.

Queries:

South Africa
Investor and Media Relations
Ilja Graulich, DRDGOLD
+27 11 381 7826 (office)
+27 83 604 0820 (mobile)

James Duncan, Russell & Associates
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)

North America
Investor and Media Relations
Barbara Cano, Breakstone & Ruth International
+1 646 452 2334 (office)

Australasia
Investor and Media Relations
Paul Downie, Porter Novelli
+61 893 861 233 (office)
+61 414 947 129 (mobile)

United Kingdom/Europe
Investor and Media Relations
Phil Dexter, St James's Corporate Services
+44 20 7499 3916 (office)
+44 779 863 4398

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