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Revised pro forma financial effects in respect of the disposal by Emperor of its interest in the PJV and proposed capital distribution by Emperor and further cautionary

Further to the announcements dated 12 April 2007 and 10 May 2007 regarding the conditional agreement for the disposal by Emperor, Emperor has now announced that it intends to return A$0.05 per Emperor share to Emperor shareholders by way of a capital return. DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE trading symbol: DRD
ISIN Code: ZAE 000058723
Nasdaq trading symbol: DROOY
(“DRDGOLD” or “the company”)

Revised pro forma financial effects in respect of the disposal by Emperor of its indirect 20% interest in the Porgera Gold Mine Joint Venture (“the PJV”) and proposed capital distribution by Emperor and further cautionary

  1. INTRODUCTION

    Further to the announcements dated 12 April 2007 and 10 May 2007 regarding the conditional agreement for the disposal by Emperor (the 78.72%-held, Australian-listed subsidiary of DRDGOLD) of its indirect 20% interest (held through DRD (Porgera) Limited (“DRD (Porgera)”)of Papua New Guinea (“PNG”)) in the PJV to Barrick (Niugini) Limited of PNG (a subsidiary of Barrick Gold Corporation of Canada (“Barrick”)) (“the disposal”) and the grant of an option to Barrick or its nominee to subscribe for 153 325 943 Emperor shares (“the option”), Emperor has now announced that it intends to return A$0.05 per Emperor share to Emperor shareholders by way of a capital return out of the surplus cash to be realised from the disposal (“the capital distribution”) (collectively “the transactions”). The capital distribution is subject to Emperor shareholders’ approval at the general meeting of Emperor shareholders to be held in Australia on or about 30 July 2007 and the successful completion of the disposal. The pro forma financial effects of the capital distribution are set out in paragraph 2 below.

    Other than the capital distribution, there have been no significant changes affecting any matter contained in the announcement of 10 May 2007 and no other significant new matter, requiring disclosure, has taken place since that date.
     

  2. PRO FORMA FINANCIAL EFFECTS

    The pro forma financial effects set out below have been prepared to assist shareholders in assessing the impact of the disposal, the option and the capital distribution on the earnings and headline earnings per DRDGOLD ordinary share for the six months ended 31 December 2006 and the net asset value (“NAV”) and tangible net asset value (“TNAV”) per DRDGOLD ordinary share at that date.

    These pro forma financial effects have been prepared in terms of the Listings Requirements of the JSE Limited (“JSE”) for illustrative purposes only in order to provide information on how the transactions might have affected the results, changes in equity and financial position of DRDGOLD and, because of their nature, may not fairly present the actual financial effects of the transactions.

    The directors are responsible for the pro forma financial effects.

     Before the disposalAfter the disposalChangeAfter the disposal and exercise of the optionChange
     (cents)(cents)(%)(cents)(%)
    (Loss)/Profit per DRDGOLD ordinary share for continuing operations(22.1)246.11 214208.01 041
    Headline loss per DRDGOLD ordinary share for continuing operations(24.5)(126.4)(416)(164.5)(571)
    NAV per DRDGOLD ordinary share23.0303.01 217288.71 155
    TNAV per DRDGOLD ordinary share23.0303.01 217288.71 155
    Weighted average number of DRDGOLD ordinary shares in issue for the period ended 31 December 2006325 172 488325 172 488-325 172 488-
    Number of DRDGOLD ordinary shares in issue at 31 December 2006334 823 654334 823 654-334 823 654-

    Notes:

    1. The loss and headline loss per DRDGOLD ordinary share for continuing operations, as set out in the “Before the disposal” column of the table, are based on the unaudited and unreviewed financial results of DRDGOLD for the six months ended 31 December 2006.
    2. The profit and headline loss per DRDGOLD ordinary share for continuing operations for the six months ended 31 December 2006, as set out in the “After the disposal” and “After the disposal and exercise of the option” columns of the table, are based on the following assumptions:
      1. the disposal was effective on 1 July 2006;
      2. on 1 July 2006, Emperor repaid debt obligations to Australia and New Zealand Banking Group Limited (“ANZ”) of US$80.4 million utilising a portion of the disposal proceeds;
      3. in the “After the disposal and exercise of the option” column Barrick exercised the option on 1 July 2006 and 153 325 943 new Emperor shares were issued at A$0.12 per Emperor share for a total cash consideration of A$18.4 million, diluting DRDGOLD’s shareholding in Emperor from 78.72% to 68.65%;
      4. The capital distribution was implemented on 1 July 2006 amounting to a total distribution:
        1. in the “After the disposal” column of A$52.3 million;
        2. in the “After the disposal and exercise of the option” column of A$59.9 million;

      5. Emperor earned interest on the cash received, less the ANZ debt settlement and the capital distribution, at a rate of 6% per annum and paid Australian tax at the rate of 30% on the interest earned;
      6. DRDGOLD earned interest on the cash received from Emperor at a rate of 6% per annum and paid South African tax at the rate of 29% on the interest earned;
      7. a PNG withholding tax at the rate of 10% was applied on the retained earnings of DRD (Porgera); and
      8. the adjustment amount payable in respect of the disposal was ignored.

    3. The NAV and TNAV per DRDGOLD ordinary share, as set out in the “Before the disposal” column of the table, are based on the unaudited and unreviewed balance sheet of DRDGOLD at 31 December 2006.
    4. The NAV and TNAV per DRDGOLD ordinary share, as set out in the “After the disposal” and “After the disposal and exercise of the option” columns of the table, are based on the assumption that the disposal was effective on and the option was exercised on 31 December 2006.

    The pro forma financial information included in this announcement does not purport to be in compliance with Regulation S-X of the rules and regulations of the United States Securities Exchange Commission.
     

  3. DOCUMENTATION AND GENERAL MEETING

    A Category 1 transaction circular is due to be posted to DRDGOLD shareholders on or about 20 June 2007. The general meeting of DRDGOLD shareholders will be held at 10:00 on Friday, 27 July 2007 at the registered office of the company.
     

  4. FURTHER CAUTIONARY

    Further to the latest cautionary announcement dated 10 May 2007, shareholders are advised that negotiations are still in progress relating to further restructuring of DRDGOLD’s non-South African interests which, if successfully concluded, may have a material effect on the price of the company’s ordinary shares. Accordingly, shareholders are advised to continue exercising caution when dealing in the company’s ordinary shares until a full announcement is made.

Johannesburg
20 June 2007

Corporate adviser
QuestCo (Pty) Limited

Sponsor
BDO QuestCo (Pty) Limited

Attorneys
Feinsteins (Levy, Feinsteins & Associates Incorporated - Reg No 1995/001716/21)