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DRD
DRDD
DRD - DRDGold Limited - Emperor Announces Sale Of Porgera Interest
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
ARBN: 086 277 616
JSE trading symbol: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD")
EMPEROR ANNOUNCES SALE OF PORGERA INTEREST
12 APRIL 2007: Emperor Mines Limited (ASX: EMP) ("Emperor") announced today that
it has entered into a conditional agreement to sell its 20% interest in the
Porgera Joint Venture ("the PJV") to Barrick Gold Corporation ("Barrick").
The Porgera gold mine is located in Enga Province in the highlands of Papua New
Guinea, some 600km north west of the capital, Port Moresby.
Barrick currently owns 75% of the PJV, acquired following Barrick`s acquisition
of Placer Dome Inc in 2006, and is responsible for operating and managing the
mine. Mineral Resources Enga Limited ("MRE") holds the remaining 5% interest in
the PJV.
Total consideration for the transaction is US$250 million plus an additional
adjustment amount, to be paid in cash. The effective date of the transaction is
April 1 2007, and completion is expected to occur within four months (subject to
the timing of receipt of the relevant regulatory approvals).
The transaction is subject to a number of conditions including the approval of
Emperor and DRDGOLD Limited ("DRDGOLD") shareholders, certain PNG regulatory
approvals and any other relevant regulatory approvals, and the approval of
Emperor`s financiers, the ANZ Bank.
Emperor`s Board of Directors intends to recommend that its shareholders vote in
favour of the proposed transaction. Emperor has been advised by its 78%
shareholder, DRDGOLD, that it is supportive of the proposed transaction and that
the DRDGOLD Board intends to recommend its shareholders vote in favour of the
proposed transaction at a special shareholder meeting.
The sale of Emperor`s 20% interest in the PJV is subject to MRE waiving its pre-
emptive rights under the PJV agreements. Should MRE elect to exercise its pre-
emptive rights, Emperor will proceed to complete the sale of its 20% interest in
the PJV to both Barrick and MRE in accordance with the PJV pre-emptive rights
process.
Brad Gordon, Chief Executive Officer of Emperor Mines Limited, said earlier
today that the sale provided an opportunity for the company to clear debt.
"We are pleased to have secured a full price for our interest in Porgera," Mr
Gordon said.
The transaction follows Emperor`s announcement of 1 February 2007 that the
company would be pursuing a restructuring plan in order to retire debt and
realise the full potential of the company`s assets. Following completion of the
transaction, Emperor will have no debt and will have cash resources of
approximately A$130 million.
Emperor`s key mining assets will comprise of the wholly-owned Tolukuma gold
mine, as well as a significant copper/gold exploration portfolio incorporating
over 5,000km2 of exploration tenements in mineral-rich Papua New Guinea.
In due course, Emperor expects to make more detailed announcements regarding its
future strategy.
"We will provide ongoing support for the improvements that are being implemented
at the Tolukuma mine" Mr Gordon said.
In connection with the Porgera transaction, Emperor has granted Barrick the
option of subscribing for up to 153 325 943 Emperor shares (approximately 13% of
Emperor`s capital, post issue) at any time prior to the date that is 10 days
after the Emperor shareholder meeting to be held to consider the transaction.
The subscription price for the option is to be determined by the volume weighted
average price of Emperor shares on the ASX over the 5 trading day period
immediately preceding Barrick notifying Emperor of its election to subscribe for
those shares.
A notice of meeting containing full details of the transaction is expected to be
dispatched to shareholders shortly.
Rothschild Australia Limited acted as financial adviser to Emperor in relation
to the transaction. Franklyn Legal acted as legal adviser.
Further Information
Brad Gordon
Chief Executive Officer
Emperor Mines Limited
Tel +61 7 3007 8000
Patrick Bindon
Director - Corporation Communications
Emperor Mines Limited
Tel +61 7 3007 8023
Johannesburg
12 April 2007
Sponsor
Standard Bank
Date: 12/04/2007 13:10:24 Produced by the JSE SENS Department.
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