| Thu 1 Feb 2007, 12:17 | | DRD - DRDGOLD Limited - Emperor pursues restructur |
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DRD
DRDD
DRD - DRDGOLD Limited - Emperor pursues restructure plan
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
ARBN 086 277 616
JSE trading symbol: DRD
ISIN Code: ZAE000058723
Issuer code: DUSM
Nasdaq trading symbol: DROOY
("DRDGOLD")
EMPEROR PURSUES RESTRUCTURE PLAN
Following a strategic review undertaken by Emperor Mines Limited
("Emperor" or the "Company") together with its major shareholder DRDGold
Limited ("DRDGold"), Emperor (ASX:EMP) is considering a restructure of
the Company in order to retire long term debt and ensure the full
potential value of Company assets can be achieved. This process has the
full support of major credit providers ANZ Banking and DRDGold.
The strategic review examined potential reconfigurations of mine and
exploration assets at a range of production levels, together with the
attendant funding options, and concluded that the Company should consider
either the divestment of certain key assets, or seek a suitable merger
partner in order to grow the value of the Company`s asset base. Emperor
is now pursuing these re-structuring options and has appointed Rothschild
Australia Limited to assist it in this process.
The strategic review also concluded that further capital is required to
realise the full potential value of Emperor`s assets. Accordingly, a new
short term finance facility has been arranged with ANZ to fund the
restructure process. The first tranche of this facility, totalling
approximately USD$15 million, has now been drawn down with a further
tranche expected to be finalised shortly. This facility provides Emperor
with capacity to pursue several restructuring options, and will be repaid
for the proceeds of the restructure.
The Company has committed to a plan to repay this facility within an
agreed timeframe.
The Company has also moved to reduce corporate costs, including a
reduction in staff levels at the Brisbane corporate office.
Update on operations
During the past two quarters production across the group was impacted by
a number of unforeseen events, which together significantly altered the
forecast production and cash flow profiles of the group.
As a consequences of the cessation of further mining Vatukoula, combined
with the ongoing political uncertainty surrounding Emperor`s ability to
fully realise the residual value of its Fiji assets, it has become
necessary for the Company to write off much of the value of those assets.
This decision, coupled with production losses arising during the first
half of the year, is expected to result in a likely loss to the Emperor
group after tax of between $200million - $230million for that period.
This information has not been reviewed or audited. Further information
will be provided in the half-yearly report, expected for release late
February 2007.
Fiji operations
As previously announced, the Company`s Vatukoula mine in Fiji has ceased
production and has been placed on care and maintenance. The Company has
been working with the Interim Fiji Government in relation to the future
of Vatukoula, and is now actively considering a divestment of the Fiji
assets which also include the Tuvatu gold deposit and regional
exploration assets in Fiji.
The assets at Vatukoula may still represent residual value to the group,
and provided that the Company is able to properly and lawfully deal with
those assets, options for realising that value could be reasonably
pursued.
The operations of the group in Fiji have been complicated by the
political events in Fiji, and by actions taken by the Fijian military in
occupying parts of the Vatukoula mine site from the weekend of January 7
and 8.
A further announcement regarding the Fiji assets will be made in due
course, following ongoing discussions with the Interim Government of Fiji
and other interested parties.
PNG operations
As previously announced, Tolukuma and Porgera have experienced a number
of interruptions to production due to a range of causes over the past six
months.
Porgera has experienced a temporary reduction in production due to
lightning damage to the Hides power generation plant late last year,
however repairs are now well under way, and the management of the Porgera
Joint Venture report that these are likely to be complete in the coming
month, following which the operation will return to normal production
levels. "We remain upbeat about the potential for further growth at
Porgera", Mr Gordon said.
Tolukuma has also experienced production issues in the past quarter,
following damage to the mill infrastructure at the mine in late November
last year. Repairs were effected quickly and were completed in early
December with the mine operating well since then.
Exploration
Exploration activity is continuing in Papua New Guinea, with near-mine
exploration at Tolukuma concentrated around the Zine and Fundoot
structures, and regional exploration taking place on Exploration leases
1271 and 1366, located to the North of Tolukuma.
The Company has also been in discussion with potential exploration Joint
Venture partners, included three major copper producers, regarding
opportunities for more advanced exploration targeting gold / copper
targets on Emperor`s exploration leases.
NOTE: Emperor`s quarterly operating report will be released shortly,
providing further information on the Company`s activities in the last
quarter. A half yearly financial report will also be released to the
market in late February.
FURTHER INFORMATION:
Brad Gordon
Chief Executive Officer
Emperor Mines Limited
AUS +617 3007 8000
Frazer Bourchier
GM Operations Fiji
Emperor Mines Limited
AUS +617 3007 8000
Patrick Bindon
Director - Corporate Communications
Emperor Mines Limited
AUS +617 3007 8000
David Wood
Rothschild
MOB +61 413 922 738
AUS +61 2 9323 2360
Johannesburg
1 February 2007
Sponsor to DRDGOLD
Standard Bank
Date: 01/02/2007 12:17:01 Produced by the JSE SENS Department.
