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DRD
DRDD
DRD - DRDGOLD Limited - Blyvooruitzicht Gold Mining Company Limited ("Blyvoor")
gives notice of `right-sizing` consultation process
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE trading symbol: DRD
ISIN: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD" or "the company")
Blyvooruitzicht Gold Mining Company Limited ("Blyvoor") gives notice of `right-
sizing` consultation process
DRDGOLD announced today that it has advised unions of its intention to right-
size the Blyvoor operations of its 74%-held subsidiary, DRDGOLD South African
Operations (Pty) Limited.
Blyvoor will now proceed with a 60-day facilitated consultation process in terms
of Section 189A of the Labour Relations Act to determine the future of affected
employees.
DRDGOLD announced at its quarterly briefings last Thursday that right-sizing at
Blyvoor had become necessary. This had been brought about by:
* a 5% drop in underground production to 21 349oz due mainly to seismic
damage to high-grade panels;
* a 16% drop in the average Rand gold price received to R244 927/kg due to
Rand strength; and
* a 17% increase in underground cash operating costs to R289 816/kg.
The damaged panels will take up to six months to rehabilitate, during which time
monthly production from the affected areas will be reduced from 2 500mSquared
per month to 200mSquared per month.
This extended, negative impact on underground production, combined with dim
prospects for a substantial Rand gold price recovery in the short-term, a 32%
power price increase from power utility Eskom with effect from 1 July and the
prospect of paying at least the 6% wage increase currently on the table with
unions, makes right-sizing at Blyvoor inevitable.
A combined management/unions task team has been appointed and is currently
investigating possible cost-reduction measures at the mine. It is envisaged that
the task team will continue its work during the Section 189A consultation
process, and beyond.
Randburg
26 August 2009
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 26/08/2009 16:30:01 Produced by the JSE SENS Department.
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