| Thu 3 Mar 2005, 15:51 | | DRDGOLD - 60-Day Review and issues North West Oper |
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DRDGOLD - 60-Day Review and issues North West Operations section 189 notice
DRDGOLD Limited
(Formerly Durban Roodepoort Deep, Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
Share code: DRD
ISIN: ZAE000058723
ARBN number: 086 277 616
NASDAQ trading symbol: DROOY
(`DRDGOLD`)
DRDGOLD ANNOUNCES 60-DAY REVIEW AND ISSUES NORTH WEST OPERATIONS SECTION 189
NOTICE
DRDGOLD today announced a 60-day operational review of its North West Operations
at Stilfontein in South Africa`s North West Province and issued a notice to
unions and associations in terms of Section 189 (3) of the Labour Relations Act.
Section 189 (3) details the requirements of a formal consultative process
management is obliged to enter into with employees when it envisages dismissals
based on changed operational and financial circumstances.
In the six months to 31 December 2004, DRDGOLD recorded a total net loss of
R370.1 million, of which R279.2 million, or 75%, was incurred by the North West
Operations. Currently, the North West Operations are losing some R20 million a
month.
DRDGOLD`s Chief Executive Officer, Mark Wellesley Wood, said today that, while
the stronger Rand and the consequent weaker Rand gold price were factors in the
North West Operations` poor performance, there has been a failure to deal with
these realities by continuously improving productivity and reducing costs.
To survive the current crisis, Wellesley-Wood said, productivity at the North
West Operations would have to increase by 35% in terms of grams per total
employee costed and current working costs of R71 million a month would have to
be slashed to R40 million.
`We are acutely aware that, in the event of failure to achieve these targets,
placing the entire North West Operations on care and maintenance becomes an
option we must consider.`
The North West Operations currently employ 6 513 people. Some 2 780 people were
retrenched as part of a restructuring process some 18 months ago but subsequent
performance improvements were not sustained.
`The urgency with which the North West Operations` current situation must now be
addressed through appropriate restructuring means it is essential that the
meeting of the statutory requirements of restructuring, as scoped by Section 189
(3), begins immediately,` Wellesley-Wood said.
`I am encouraged that employees and their representatives understand the
seriousness of the situation at the North West Operations and are already
engaged with management in consultation on ways to improve productivity, cut
costs and return to profitability.
`We remain open to all offers and suggestions, either to sustain mining at the
North West Operations or to retain access to their reserves,` Wellesley-Wood
said.
DRDGOLD has requested the Commission for Conciliation, Mediation and Arbitration
(`CCMA`) to facilitate consultation in terms of Section 189 (3).
Wellesley-Wood said it is envisaged that the CCMA-facilitated process will run
concurrently with the consultation process already under way at the North West
Operations.
Johannesburg
3 March 2005
Queries:
South Africa Investor and Media Relations
Ilja Graulich, DRDGOLD
+27 11 381 7826 (office)
+27 83 604 0820 (mobile)
James Duncan, Russell & Associates
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)
North America
Investor and Media Relations
Barbara Cano, Breakstone & Ruth International
+1 646-536-7015 (office)
+1 917-861-2530 (mobile)
Australasia
Investor and Media Relations Paul
Downie, Porter Novelli
+61 893 861 233 (office)
+61 414 947 129 (mobile)
United Kingdom/Europe
Investor and Media Relations
Phil Dexter, St James`s Corporate Services
+44 20 7499 3916 (office)
+44 779 863 4398
Date: 03/03/2005 02:43:34 PM
Produced by the JSE SENS Department
