| Wed 2 Dec 2009, 12:57 | | DRD - DRDGold Limited - DRDGold agrees to sell 60% of Blyvooruitzicht Gold |
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DRD
DRDD
DRD - DRDGold Limited - DRDGold agrees to sell 60% of Blyvooruitzicht Gold
Mining Company Limited to Aurora Empowerment Systems (Pty) Limited for
R296 million and cautionary announcement
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")
DRDGOLD agrees to sell 60% of Blyvooruitzicht Gold Mining Company Limited
("Blyvoor") to Aurora Empowerment Systems (Pty) Limited ("Aurora") for R296
million and cautionary announcement
DRDGOLD and Aurora announced today that they have signed a Heads of Agreement
relating to an offer in terms of which Aurora will acquire a 60% interest in
Blyvoor, a wholly-owned subsidiary of DRDGOLD`s 74%-held operating subsidiary,
DRDGOLD South African Operations (Pty) Limited, for R296.2 million with effect
from 1 December 2009 ("the offer").
In addition, in terms of the offer:
- Aurora will provide a facility of up to R80 million to Blyvoor in respect
of working capital requirements. Blyvoor will be able to draw down R10
million on the facility at the end of December 2009, and then up to R14
million at each month-end thereafter until the end of May 2010; and
- from 31 December 2009, Aurora has guaranteed a monthly profit share of R2.5
million or 25% of net operating cash profit, whichever is the higher, to
DRDGOLD, up to and including the end of the month preceding the expected
transaction completion date of 29 June 2010.
DRDGOLD CEO, Niel Pretorius, said: "We are pleased to have reached this
agreement with Aurora. The R80 million drawdown facility will provide immediate
relief to Blyvoor in terms of its short-term working capital requirements.
"Together with a very encouraging turn-around in performance at Blyvoor between
October and November - notably a 116% increase in gold production and a 47%
reduction in Rand per kilogram cash costs - this substantially improves
prospects for bringing Blyvoor out of its current judicial management, sooner
rather than later."
"The purchase consideration of R296.2 million for 60% of Blyvoor re-strengthens
DRDGOLD`s balance sheet at a time when our strategic focus is moving
increasingly towards lower-risk, lower-cost, higher-margin surface retreatment
operations. At the same time, we are able to preserve a 40% interest in
DRDGOLD`s underground optionality and surface retreatment activities".
Aurora Managing Director, Zondwa Mandela, said: "This transaction demonstrates
our credibility in the sector and reinforces our strategy of job preservation
and opportunity. We believe we can further improve an already impressive safety
record and harness the full financial potential of operations such as Blyvoor
and we look forward to working with DRDGOLD to bring this potential to
fruition."
The offer is subject to the fulfilment of a number of conditions precedent.
These may include:
- approval by the boards of DRDGOLD, its black economic empowerment partner,
Khumo Gold SPV (Pty) Limited, and Aurora;
- approval by the shareholders of DRDGOLD;
- Aurora conducting a due diligence on Blyvoor and advising DRDGOLD that it
is satisfied with the results;
- execution of definitive transaction agreements relating to the offer;
- Byvoor being taken out of judicial management within a reasonable time from
signature of formal agreements, or appointing a further judicial manager
nominated by Aurora; and
- DRDGOLD obtaining all South African regulatory approvals, where applicable.
Cautionary announcement
As certain additional information relating to the offer is not as yet available,
shareholders should exercise caution when trading in their DRDGOLD securities
until a full announcement containing such information is released.
Randburg
2 December 2009
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 02/12/2009 12:57:01 Produced by the JSE SENS Department.
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