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DUSM
Durban Roodepoort Deep, Limited - Option Agreement
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")
OPTION AGREEMENT
1. INTRODUCTION
DRD has entered into an agreement with Investec Bank Group ("Investec") which
grants Investec an option to acquire 18 million new, fully paid up DRD ordinary
shares ("the option").
2. TRANSACTION DESCRIPTION
The option is an American style call option with a strike price in US Dollars
equal to 95% of the trade-weighted average price of DRD American Depository
Receipts ("ADRs") trading on NASDAQ for the 30 days prior to exercise date. The
option carries an expiration date of 3 October 2003.
3. RATIONALE FOR THE TRANSACTION
On the assumption that the option is exercised, DRD will apply the proceeds
arising from the exercise of the option towards its general corporate funding
requirements.
4. PRO FORMA FINANCIAL EFFECTS
To assist shareholders to assess the impact of the new issue of shares in the
event of exercise of the option, set out below is the pro forma effects on
earnings, headline earnings, net asset value and tangible net asset value per
DRD ordinary share. The material assumptions are set out following the table.
The pro forma does not constitute a representation of the future financial
position of DRD should the option be exercised.
Before the
exercise of After the Change
the option exercise of (%)
(cents) the option
(cents)
Earnings per share 201.5 198.3 -2
Headline earnings per 199.0 196.1 -1
share
Net asset value per share 251.0 397. 8 58
Tangible net asset value 251.0 397. 8 58
per share
Notes:
1. The earnings and headline earnings per share in the "Before the exercise of
the option" column of the table are based on the reviewed income statement of
DRD for the financial year ended 30 June 2003.
2. The earnings and headline earnings per share in the "After the exercise of
the option" column of the table are based on 202 091 466 shares in issue, being
the weighted average number of shares in issue for the year, and the assumptions
that
- the option was exercised on 1 July 2002;
- the 30-day trade-weighted average price of DRD ADRs on NASDAQ at that date
equated to R20 per DRD ADR; and
- the cash raised on issue of DRD shares pursuant to the exercise of the option
earned interest at a rate of 12.5%, which interest attracted South African
normal tax at a rate of 30%.
3. The net asset value per share and tangible net asset value per share in the
"Before the exercise of the option" column of the table are based on the
reviewed balance sheet of DRD at 30 June 2003.
4. The net asset value per share and tangible net asset value per share in the
"After the exercise of the option" column of the table are based on 202 222 073
shares in issue and the assumptions that:
- the option was exercised on 30 June 2003; and
- the 30-day trade-weighted average price of DRD ADRs on NASDAQ at that date
equated to R20 per DRD ADR.
5. NO APPROVALS REQUIRED FOR THE TRANSACTION
The entry by DRD into of the option agreement and any exercise of the option
will not require shareholder approval.
Johannesburg
25 August 2003
Financial adviser
Questco Investments (Proprietary) Limited
(Registration number 2002/005616/07)
Sponsor
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Date: 25/08/2003 11:00:03 AM Produced by the JSE SENS Department
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