Media releases

DRDGOLD extends BEE, establishes new platform for growth into Africa

Details

Published: Thursday, 27 October 2005 02:00

The Board of DRDGOLD today approved an extension of the company’s existing black economic empowerment (BEE) structure with Khumo Bathong Holdings (Pty) Limited (KBH)
Johannesburg, South Africa. 27 October 2005. The Board of DRDGOLD Limited (JSE: DRD; NASDAQ: DROOY; ASX: DRD; POM SoX: DRD) today approved an extension of the company’s existing black economic empowerment (BEE) structure with Khumo Bathong Holdings (Pty) Limited (KBH) to cover all of DRDGOLD’s South African assets.

The transaction has been facilitated by the Industrial Development Corporation (IDC), which agreed to a debt restructuring in the Crown Joint Venture, held 60% and 40% respectively by KBH and DRDGOLD.

The new structure results in KBH acquiring, as a first step, a 15% interest in a newly created vehicle, DRDGOLD SA, which includes East Rand Proprietary Mines (ERPM), Crown surface operations and Blyvooruitzicht (Blyvoor). DRDGOLD will retain an 85% interest.

In the second step, KBH has been granted an option, exercisable over the next three years, to acquire a further 11% interest in DRDGOLD SA for the payment consideration of R9.3 million. This further equity tranch will include a 6% stake to be placed in a new, proposed Employee Trust.

The transaction has been vendor financed by the conversion of an existing loan to KBH of R7.9 million and issuance of R31.8 million new KhumoGold preference shares.

Commenting on the effects of the transaction, DRDGOLD CEO Mark Wellesley-Wood said: “The restructuring transfers R36 million of value to KBH in exchange for a net purchase consideration of R15 million. The BEE discount, therefore, represents less than 1% of DRDGOLD’s market capitalisation. Significantly, however, DRDGOLD’s attributable gold production will increase by 30% and its attributable gold reserves will increase by 165 000 ounces.

Dr Paseka Ncholo, Chairman of DRDGOLD Limited, will take over as Executive Chairman of DRDGOLD SA with effect from 1 November 2005.

Dr Ncholo said: “This transaction achieves our objective of creating a solid platform to achieve sustainability and growth, while achieving compliance with the Mining Charter and simplifying our structure. Together with DRDGOLD, we intend to create a new, truly African company with interests spanning the entire continent.”

Queries:

South Africa
Investor and Media Relations
Ilja Graulich, DRDGOLD
+27 11 219 8707(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 Group 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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FORWARD-LOOKING STATEMENTS
Some of the information in this press release may contain projections or other forward looking statements regarding future events or other financial performance, including forward-looking statements and information relating to us that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. When used in this release, the words "estimate", "project", "believe", anticipate", "intend", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks, uncertainties and assumptions.

Many factors could cause our 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 continuing strengthening of the Rand against the Dollar, regulatory developments adverse to us or difficulties in maintaining necessary licenses or other governmental approvals, changes in our competitive position, changes in business strategy, any major disruption in production at our 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 2004, which we filed with the United States Securities and Exchange Commission on 29 November 2004 on Form 20-F, as amended by the Form 20-F/A filed on 29 April 2005 and those detailed from time to time with the United States Securities and Exchange Commission. 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.