| Thu 28 Jul 2005, 8:45 | | Re-Opening Of Blyvoor No. 2 Sub-Shaft To Proceed |
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DRDGOLD Limited - Re-Opening Of Blyvoor No. 2 Sub-Shaft To Proceed And Expansion
Of Slimes Dam Project
DRDGOLD Limited
(Formerly Durban Roodepoort Deep, Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
Share code: DRD
ISIN: ZAE000058723
ARB number: 086 277 616
(`DRDGOLD` or `the company`)
RE-OPENING OF BLYVOOR NO. 2 SUB-SHAFT TO PROCEED AND EXPANSION OF SLIMES DAM
PROJECT
1. INTRODUCTION
DRDGOLD announced today that two projects at its Blyvooruitzicht Gold Mining
Company Limited (`Blyvoor`), operations, namely:
- the re-establishment of mining operations from the No. 2 Sub-shaft in two
phases costing R80.5 million; and
- a R2.3 million expansion of the Slimes Dam Project,
will be presented to the DRDGOLD Board of Directors for approval when it meets
on 24 August 2005.
2. RE-ESTABLISHMENT OF THE NO. 2 SUB-SHAFT
DRDGOLD Chief Operating Officer Mark Wellesley-Wood said there were `a number of
compelling arguments` for proceeding with the No. 2 Sub-shaft Project, namely:
- the available in-situ reserves totalling 1 819 096 tons at an average in-
situ grade of 14.21 grams per ton (`g/t`), containing 804 270 ounces (25 016
kilograms) of gold;
- the need for replacement reserve tonnage in the face of the steady decline
in the No. 5 Shaft grade profile;
- the `use it or lose it` imperative contained in the Mineral and Petroleum -
Resources Development Act; and
- Blyvoor`s proven ability to mine previously abandoned ore reserves.
In total, the No. 2 Sub-shaft project is expected to yield some 770 491 oz
(24 772 kg) of gold from 2.4 million tons of ore with an average delivered grade
of 8.16 grams per ton, restoring Blyvoor`s life to 17 years, Wellesley-Wood
said.
He warned, however, that the project - the first phase of which has been
modelled at a gold price of R84 056 per kilogram - was cost-sensitive and could
be jeopardised by excessive increases in major items such as wages, which
account for 49% of total working costs.
The No 2 Main Shaft - previously known as Doornfontein No 2 Main Shaft - was
decommissioned in 1993 by Goldfields of South Africa Limited and is not owned by
Blyvoor. The No 2 Sub-Shaft infrastructure and reserves are owned by Blyvoor,
however, and are accessible from the mine`s No. 5 and No. 6 Shaft on both 15 and
33 levels.
Phase 1 of the project to re-establish mining, costing R23.1 million, has
already begun and involves re-equipping 15 level from Nos 5 and 6 Shafts over
distances of 6 500 metres and 4 900 metres respectively. Main Reef (MR) and
Carbon Leader Reef (`CLR`) ore reserves accessed en route to the No 2 Sub-shaft
will be mined from March 2006, covering the cost of the first phase.
The 15 level ore reserve blocks are estimated to contain a total of 197 484 tons
- 103 598 tons on the CLR with an in-situ grade of 13.38 g/t (8.15 g/t
recovered) and 93 886 tons of MR with an in-situ grade of 7.04 g/t (4.52 g/t
recovered). Total gold content is estimated at 39 470 oz (1 269 kg) and revenue
to be generated at R109.2 million.
In phase 2, scheduled to begin in March 2006, the sub-shaft, winders, ropes and
conveyances will be repaired and refurbished, and mine levels 17 to 31 equipped
at a cost of R53.6 million. Mining on 17 level is expected to start in March
2007 and to continue until September 2009 on levels 19 to 31.
3. SLIMES DAM PROJECT EXPANSION
The Slimes Dam Project expansion - scheduled for completion by the end of the
September 2005 quarter, involves the installation of an additional pump and
wider gauge pipes on the residue pipeline from the plant in order to ease
congestion and further improve plant efficiency, together with the
implementation of a number of in-plant process upgrades to ease maintenance
demands.
A 15% increase in volume, to approximately 300 000 tons per month, a 12%
increase on gold production to 230 oz (7.4 kg) a month, a slight reduction in
operating costs to R12.50 per ton, and an additional contribution of R450 000 a
month are expected. The capital cost of the expansion was minimized by acquiring
pipes, pumps and valves second-hand from AngloGold Ashanti`s Ergo surface
reclamation operation which closed earlier in the year.
Johannesburg
28 July 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
+1 646 452 2334 (office)
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
DRDGOLD is an intermediate unhedged gold producer with mines in South Africa as
well as Australasia. The company`s production profile is split equally between
its highly leveraged SA operations and its low cost, cash generative offshore
mines.
DRDGOLD has primary listings on the Johannesburg (JSE:DRD) and Australian
(ASX:DRD) stock exchanges and secondary listings on NASDAQ (DROOY), the London
and Port Moresby stock exchanges and the Paris and Brussels Bourses. Its shares
are also traded on the regulated unofficial market of the Frankfurt Stock
Exchange and the Berlin OTC Market.
For more information, please visit www.drdgold.com
FORWARD-LOOKING STATEMENTS
Some of the information in this press release may contain projections or other
forward looking statements regarding future events or other financial
performance, including forward-looking statements and information relating to us
that are based on the beliefs of our management, as well as assumptions made by
and information currently available to our management. When used in this
release, the words `estimate`, `project`, `believe`, anticipate`, `intend`,
`expect` and similar expressions are intended to identify forward-looking
statements. Such statements reflect our current views with respect to future
events and are subject to risks, uncertainties and assumptions.
Many factors could cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by such forward-looking statements, including, among
others, adverse changes or uncertainties in general economic conditions in the
markets we serve, a drop in the gold price, a continuing strengthening of the
Rand against the Dollar, regulatory developments adverse to us or difficulties
in maintaining necessary licenses or other governmental approvals, changes in
our competitive position, changes in business strategy, any major disruption in
production at our key facilities or adverse changes in foreign exchange rates
and various other factors.
These risks include, without limitation, those described in the section entitled
`Risk Factors` included in our annual report for the fiscal year ended 30 June
2004, which we filed with the United States Securities and Exchange Commission
on 29 November 2004 on Form 20-F, as amended by the Form 20-F/A filed on 29
April 2005 and those detailed from time to time with the United States
Securities and Exchange Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date thereof. We do not
undertake any obligation to publicly update or revise these forward-looking
statements to reflect events or circumstances after the date of this report or
to the occurrence of unanticipated events.
Date: 28/07/2005 08:02:13 AM
Produced by the JSE SENS Department
