| Mon 26 Nov 2007, 8:45 | | DRD - DRDGOLD limited - Prospects for Uranium sul |
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DRD
DRDD
DRD - DRDGOLD limited - Prospects for Uranium, sulphur production - and more
gold - to be investigated
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE share code: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD" or "the Company")
PROSPECTS FOR URANIUM, SULPHUR PRODUCTION - AND MORE GOLD - TO BE INVESTIGATED
DRDGOLD announced today that DRDGOLD South African Operations (Pty) Limited
("DRDGOLD SA"), in which DRDGOLD holds a 74% stake, has signed a binding term
sheet with Mintails SA (Pty) Limited ("Mintails SA"), a subsidiary of Mintails
Limited ("Mintails")of Australia, its partner in a previously announced East
Rand gold tailings treatment joint venture ("the ERGO JV"), which provides for
significant expansion of the joint venture through:
- the planned refurbishment over the next 36 months of all infrastructure at the
ERGO plant in Brakpan, to increase capacity from one carbon in leach ("CIL")
gold recovery circuit, as previously announced, to a plant capable of processing
tailings for recovery of gold, uranium and sulphuric acid; and
- substantially increasing available tailings material from 195 million tonnes
("mt"), as previously announced, to up to 1 700 mt, by securing rights over
tailings dumps and slimes dams in the region.
The expanded ERGO JV will pursue feasibility studies to refurbish and re-open
the full ERGO plant, which was acquired by Mintails SA from AngloGold Ashanti
Limited ("AngloGold Ashanti") in 2006 and historically produced gold, uranium
and sulphuric acid.
Through this expansion, the ERGO JV partners have endorsed the strategy of
pursuing a consolidation of all their available and unexploited surface gold and
uranium assets on the East Rand.
DRDGOLD SA Chief Executive Officer, Niel Pretorius, said: "We have placed
increasing emphasis on the development of our surface reclamation business to
preserve a healthy mix between the consistency of our surface assets and the
sensitivity to volume in our deep-level underground mining, and are very excited
by these new growth prospects.
"While the underground operations returned increasingly encouraging results in
the last few quarters, and generally are starting to perform with greater
consistency, they remain sensitive to interruptions in production, as we
experienced with the temporary suspension of underground mining at Blyvoor by
the Department of Minerals and Energy earlier in the quarter. This project will
further enhance our ability to overcome such occurrences and is consistent with
our strategy to achieve organic growth off a platform of stability and improved
efficiencies."
Phase I of the ERGO JV involves the refurbishment of one CIL circuit at the ERGO
plant with the capacity to treat an estimated 15 mt of tailings a year, for the
recovery of some 75 000 ounces of gold a year. Phase II, now under
investigation, envisages the expansion of the gold plant by refurbishing the
second CIL circuit and developing uranium and acid plants.
Over its 25-year history, the ERGO plant processed more than 890 mt of tailings
material and produced approximately 8.3 million ounces of gold and 5.5 million
pounds of uranium.
Agreements have been concluded for:
- the acquisition by the ERGO JV of additional tailings properties and the
Withok deposition complex from AngloGold Ashanti for a payment of R45 million
and assumption of rehabilitation obligations; and
- the acquisition by Mintails SA of an option to acquire tailings properties
(the Grootvlei Properties), comprising some 105 mt, from Pamodzi Gold Limited.
These properties will form part of the Mintails SA contribution to the expanded
ERGO JV.
The acquisition of the Withok deposition site will provide the expanded ERGO JV
with extensive additional deposition capacity commensurate with the substantial
increases in tailings material and processing capacity.
The arrangements between the ERGO JV partners have been structured to provide
for the contribution of assets and funding to the ERGO JV operation on a 50:50
basis. The ERGO JV acquisitions are subject to regulatory review, completion of
definitive agreements, corporate and other approvals.
Randburg
26 November 2007
Sponsor
BDO QuestCo
Attorneys
Feinsteins
(Levy, Feinsteins & Associates Incorporated - Reg No
1995/001716/21)
Date: 26/11/2007 08:45:01 Produced by the JSE SENS Department.
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