Media releases

Re-opening of Blyvoor no 2 sub-shaft to proceed

Details

Published: Thursday, 28 July 2005 02:00

DRDGOLD announced today that two projects at its Blyvooruitzicht operation with a total capital cost of R82.8 million – the re-establishment of mining operations from the No 2 Sub-Shaft in two phases costing R80.5 million and a R2.3 million expansion of the Slimes Dam Project – will be presented to the DRDGOLD Board of Directors for approval when it meets on 24 August.

Johannesburg, South Africa. 28 July 2005. DRDGOLD Limited (JSE: DRD; NASDAQ: DROOY; ASX: DRD; POM SoX: DRD) announced today that two projects at its Blyvooruitzicht operation with a total capital cost of R82.8 million – the re-establishment of mining operations from the No 2 Sub-Shaft in two phases costing R80.5 million and a R2.3 million expansion of the Slimes Dam Project – will be presented to the DRDGOLD Board of Directors for approval when it meets on 24 August.

DRDGOLD Chief Operating Officer Mark Wellesley-Wood said there were “a number of compelling arguments” for proceeding with the No 2 Sub-Shaft Project:

• available in-situ reserves totalling 1 819 096 tons at an average in-situ grade of 14.21 grams per ton (g/t), containing 804 270 ounces (25 016 kilograms) of gold;
• the need for replacement reserve tonnage in the face of the steady decline in the No 5 Shaft grade profile;
• the ‘use it or lose it’ imperative contained in the Mineral and Petroleum Resources Development Act; and
• Blyvoor’s proven ability to mine previously abandoned ore reserves.

In total, the No 2 Sub-Shaft project is expected to yield some 770 491 oz (24 772 kg) of gold from 2.4 million tons of ore with an average delivered grade of 8.16 g/t, restoring Blyvoor’s life to 17 years, Wellesley-Wood said.

He warned, however, that the project – the first phase of which has been modelled at a gold price of R84 056 per kilogram – was cost-sensitive and could be jeopardised by excessive increases in major items such as wages, which account for 49% of total working costs.

The No 2 Main Shaft – previously known as Doornfontein No 2 Main Shaft – was decommissioned in 1993 by Goldfields of South Africa Limited and is not owned by Blyvoor. The No 2 Sub-Shaft infrastructure and reserves are owned by Blyvoor, however, and are accessible from the mine’s Nos 5 and 6 Shafts on both 15 and 33 levels.

Phase 1 of the project to re-establish mining, costing R23.1 million, has already begun and involves re-equipping 15 level from Nos 5 and 6 Shafts over distances of 6 500 metres and 4 900 metres respectively. Main Reef (MR) and Carbon Leader Reef (CLR) ore reserves accessed en route to the No 2 Sub-Shaft will be mined from March 2006, covering the cost of the first phase.

The 15 level ore reserve blocks are estimated to contain a total of 197 484 tons – 103 598 tons on the CLR with an in-situ grade of 13.38 g/t (8.15 g/t recovered) and 93 886 tons of MR with an in-situ grade of 7.04 g/t (4.52 g/t recovered). Total gold content is estimated at 39 470 oz (1 269 kg) and revenue to be generated at R109.2 million.

In Phase 2, scheduled to begin in March 2006, the sub-shaft, winders, ropes and conveyances will be repaired and refurbished, and mine levels 17 to 31 equipped at a cost of R53.6 million. Mining on 17 level is expected to start in March 2007 and to continue until September 2009 on levels 19 to 31.

Slimes Dam Project expansion

The Slimes Dam Project expansion – scheduled for completion by the end of the September 2005 quarter, involves the installation of an additional pump and wider gauge pipes on the residue pipeline from the plant in order to ease congestion and further improve plant efficiency, together with the implementation of a number of in-plant process upgrades to ease maintenance demands.

A 15% increase in volume, to approximately 300 000 tons per month, a 12% increase in gold production to 230 oz (7.4 kg) a month, a slight reduction in operating costs to R12.50 per ton, and an additional contribution of R450 000 a month are expected. The capital cost of the expansion was minimized by acquiring pipes, pumps and valves second-hand from AngloGold Ashanti’s Ergo surface reclamation operation which closed earlier in the year.

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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DRDGOLD is an intermediate unhedged gold producer with mines in South Africa as well as Australasia. The company’s production profile is split equally between its highly leveraged SA operations and its low cost, cash generative offshore mines.

DRDGOLD has primary listings on the Johannesburg (JSE:DRD) and Australian (ASX:DRD) stock exchanges and secondary listings on NASDAQ (DROOY), the London and Port Moresby stock exchanges and the Paris and Brussels Bourses. Its shares are also traded on the regulated unofficial market of the Frankfurt Stock Exchange and the Berlin OTC Market.

For more information, please visit www.drdgold.com

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