Johannesburg, South Africa. 21 January 2010. DRDGOLD Limited (JSE: DRD; Nasdaq: DROOY) announced today that it has agreed a transaction with Mintails Limited (Mintails) worth a total of R82 088 321, in terms of which DRDGOLD will acquire Mintails’ 50% interest in Ergo Mining (Pty) Limited (Ergo).
Ergo was created as a 50:50 joint venture by DRDGOLD and Mintails in November 2007 to explore, evaluate and process up to 1.7 billion tonnes of surface gold-, uranium- and sulphur-bearing tailings from the East and Central Rand goldfields of South Africa.
DRDGOLD CEO Niël Pretorius said: “This transaction, which I believe the market has been anticipating, marks the next logical step in DRDGOLD’s strategy to expand its surface tailings reclamation footprint. Gaining access to the second CIL circuit at Ergo’s Brakpan plant effectively doubles the volume capacity to which we have access, and provides options in respect of resources we control in and around central Johannesburg and Boksburg.”
Pretorius said that DRDGOLD would also continue to explore prospects for uranium and sulphur production through the Brakpan plant.
DRDGOLD will settle the R82 088 321 consideration with a three-tranche payment of R62 088 321 from its cash reserves, and with its shares in the Witfontein tailings deposition site on the far West Rand, valued at R20 million.
DRDGOLD has wholly owned the gold circuit of Ergo, now known as ErgoGold, since December 2008, having acquired Mintails’ 50% interest in two separate transactions worth a total of R277 million.
James Duncan, Russell & Associates
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Many factors could cause the 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 DRDGOLD or difficulties in maintaining necessary licences or other governmental approvals, changes in DRDGOLD's competitive position, changes in business strategy, any major disruption in production at 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 2008, which we filed with the United States Securities and Exchange Commission on 12 December 2008 on Form 20-F. 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.