| Mon 4 Mar 2002, 0:00 | | Durban Roodepoort Deep, Limited - Rawas Disclosure |
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Durban Roodepoort Deep, Limited
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
(Share code: DUR)
(ISIN: ZAE 000015079)
(ARBN number 086 277 616)
(NASDAQ Trading Symbol: DROOY)
("DRD" or "the Company")
RAWAS DISCLOSURE ANNOUNCEMENT
Ordinary Shares issued in Connection with Rawas Transaction
I refer to my Chairman's Statement accompanying the Financial Statements for
the year ended June 30 2001 in which I undertook to keep shareholders
informed of progress on the above matter.
Rawas refers to a gold project in Indonesia, which ceased operations in
March 2000.
In July and October of 1999, DRD issued a total of 8,252,056 ordinary shares
to various creditors of Laverton Gold and its subsidiary, BT Barisan
Tropical Mining. The creditors to whom such ordinary shares were issued
included CAM and Continental Gold Fields NL. The companies in the CAM group
and other CAM related companies received 3.4 million of the shares in
question. The shareholders of Laverton included Weston Investments Ltd. (a
subsidiary of CAM), who was the principal shareholder, and Continental
Goldfields NL.
These ordinary shares were ostensibly issued pursuant to the planned
acquisition of Rawas in consideration for, or in anticipation of receiving
shares in, and claims against, various companies with ownership interests in
Rawas and its associated mining rights.
In connection with this transaction, DRD entered into heads of agreement and
a memorandum of understanding, However, in about September 2000, some 15
months later, certain evidence came to light, which, after investigation,
revealed that all of those shares had been allotted and issued invalidly,
beyond the legal powers of the company and suggested that the ordinary
shares were issued as a result of an irregular transaction foisted on the
company by certain third parties for their benefit alone. No final formal
agreement has been signed by DRD with regard to this transaction.
Since the evidence referred to above came to light, the Company has been
investigating the whole transaction with a view to pursuing any rights of
recovery it may have against the parties responsible for entering into the
transaction.
The full financial effects of the transaction were recognised in the 2000
Financial Statements as a write off of R121million. In addition, DRD has
expended approximately R20 million in supporting the mine. The auditors have
confirmed that no further adjustments will be necessary.
Under South African law, a Court is permitted to validate an invalid issue
of shares upon satisfaction that, given all the circumstances, it would be
just and equitable to do so. Consequently, DRD has prepared an Application
to Court for validation. However, since the issuance of shares was conducted
without the approval of a special resolution of shareholders the Company
will first be seeking that approval for the issue in the form of a special
resolution.
A Notice convening a Special Meeting will be sent to shareholders shortly.
Mark Wellesley-Wood
Chairman and Chief Executive Officer
Johannesburg
4 March 2002
Sponsor
Standard Corporate & Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
