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Underground operations of East Rand Proprietary Mines Limited (ERPM) to be placed on care and maintenance; section 189a consultation process to begin.

Details

Published: Wednesday, 19 November 2008 02:00

DRDGOLD Limited announced today that it has advised unions of its intention to place on care and maintenance the underground operations of the ERPM mine of its 74%-owned operating subsidiary, DRDGOLD South African Operations (Pty) Limited, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to determine the future of the mine’s 1 700 employees.

Johannesburg, South Africa, 19 November, 2008. DRDGOLD Limited (JSE: DRD; NASDAQ: DROO) announced today that it has advised unions of its intention to place on care and maintenance the underground operations of the ERPM mine of its 74%-owned operating subsidiary, DRDGOLD South African Operations (Pty) Limited, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to determine the future of the mine’s 1 700 employees.

Underground mining at the ERPM mine was halted on 31 October 2008 when pumping infrastructure could no longer cope with rising underground water levels.

Management informed unions today that an investigation into the possibility of installing additional pumping infrastructure had confirmed a capital cost of some R115 million and a timeframe of more than 12 months.

The capital cost and the cost of maintaining the workforce on full pay are beyond the financial means of ERPM, which incurred a loss of R128.1 million after accounting for impairment of assets for the quarter ended 30 September 2008 and a loss of R102.7 million before tax in the previous financial year ended 30 June 2008.

In anticipation of placing ERPM’s underground operation on care and maintenance, the decision was taken to proceed with the Section 189A process.

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