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Blyvoor accepts offer of assistance from Anglogold Ashanti; appoints business rescue practitioner

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Published: Thursday, 14 July 2011 02:00

Johannesburg, South Africa. 14 July, 2011. DRDGOLD Limited (DRDGOLD; JSE: DRD; NASDAQ: DROOY) announced today that its distressed operating subsidiary, Blyvooruitzicht Gold Mining Company Limited (Blyvoor) has accepted an offer of assistance, which is subject to the finalisation of a definitive agreement, from AngloGold Ashanti Limited (AngloGold Ashanti).

This development follows DRDGOLDs announcement on 23 June that, in response to DRDGOLDs suspension of any further financial assistance to Blyvoor, Blyvoors Board of Directors had decided to begin business rescue proceedings for Blyvoor in terms of Chapter 6 of the new Companies Act.

DRDGOLD CEO Niël Pretorius says the AngloGold Ashanti offer involves the sale to Blyvoor of some 390 000 square metres of its neighbouring Savuka mining area for R35 million. The area is not within AngloGold Ashantis current mine planning. Pending the necessary regulatory approvals and subject to the finalisation of a binding agreement, Blyvoor will mine the area under contract.

We are grateful to AngloGold Ashanti for this show of good neighbourliness and pragmatism, said Pretorius.

We believe that there may be potential for Blyvoor to generate significant free cashflow by mining the Savuka ground, which will help to restore its going concern status, an important consideration for prospective lenders and suitors.

In terms of the provisions of Chapter 6, Blyvoors Board of Directors has appointed Peter Van den Steen as the Business Rescue Practitioner. Working with Blyvoors management team, Van den Steen has 25 working days until 12 August to produce a rescue plan for Blyvoor. The plan must then be presented to and voted on by Blyvoors creditors.

At this point, we are very confident the rescue process can deliver a workable rescue plan, Pretorius said.

A no vote to such a plan would mean Blyvoors liquidation; an outcome with far-reaching negative consequences all stakeholders.

Van Den Steen, an MBA graduate and registered business rescue practitioner, has extensive experience in successful business rescue processes, both in South Africa and internationally.

Roodepoort
14 July 2011

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