Wrap Text
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE share code: DRD
ISIN: ZAE000058723
Issuer code: DUSM
NYSE trading symbol: DRD
(a''DRDGOLDa'' or a''Companya'')
RESTRUCTURE OF THE SURFACE RETREATMENT OPERATIONS OF THE DRDGOLD
GROUP
INTRODUCTION
DRDGOLD shareholders (a''Shareholdersa'') are advised that the Company has effected a
change in its group structure in order to consolidate all of its surface retreatment operations
(a''Restructurea'').
In order to implement the Restructure, agreements have been entered into on 29 June 2012
in terms of which:
a'' DRDGOLD sells its 35% direct interest in the unincorporated partnership ErgoGold
(formerly Elsburg Gold Mining Joint Venture) (a''ErgoGolda'') to Ergo Mining (Proprietary)
Limited (a''Ergoa'') for R200 million on loan account (a''ErgoGold Disposala'');
a'' Crown Gold Recoveries (Proprietary) Limited (a''Crowna'') sells, as a going concern, all its
mining assets (excluding its 50% interest in Ergo) and mining and prospecting rights and
certain liabilities to Ergo, in exchange for shares in Ergo (a''Crown Disposala'');
a'' East Rand Proprietary Mines Limited (a''ERPMa'') sells, as a going concern, all its surface
mining assets (excluding its 50% interest in Ergo) and its 65% interest in ErgoGold to
Ergo and its mining right, in exchange for shares in Ergo (a''ERPM Disposala''),
(collectively the a''Transactionsa'');
a'' once the Crown Disposal has been completed, Crown will distribute its entire holding in
Ergo to its sole shareholder, Ergo Mining Operations (Proprietary) Limited (formerly
DRDGOLD SA) (a''EMOa''); and
a'' once the ERPM Disposal has been completed, ERPM will distribute its entire holding in
Ergo to its sole shareholder, EMO,
(collectively the a''Unbundlingsa'')
Following the Transactions and Unbundlings, EMO will be the 100% shareholder of Ergo
which in turn will hold the assets and liabilities of ErgoGold.
All conditions precedent to the ErgoGold Disposal have been fulfilled. The transfer of the
mining rights and prospecting rights (including the transfer of the relevant surface rights
permits) under the ERPM Disposal and Crown Disposal are still subject to the consent of the
Minister in terms of section 11(1) of the Mineral and Petroleum Resources Development Act
28 of 2002.
The ErgoGold Disposal and the transfer of those assets disposed of pursuant to the Crown
Disposal and the ERPM Disposal, respectively, (other than those still subject to regulatory
approvals) is effective from 1 July 2012.
RATIONALE FOR THE RESTRUCTURE
DRDGOLD intends to consolidate and simplify the structure of its surface retreatment
operations and the Restructure will result in the Companya''s surface retreatment operations
being housed in a single entity, Ergo. It is anticipated that the Restructure will result in
improved synergies and cost savings. DRDGOLD is also mindful of the 2014 Mining Charter
targets for black economic empowerment (a''BEEa'') ownership. The Transactions and
Unbundlings will allow DRDGOLD to be in full compliance with the BEE ownership targets of
the Mining Charter.
FINANCIAL EFFECTS OF THE TRANSACTIONS AND UNBUNDLINGS
The unaudited pro forma financial effects (a''Financial Effectsa'') as set out below have been
prepared for illustrative purposes only, to assist Shareholders in assessing the impact of the
Transactions and Unbundlings on DRDGOLDa''s earnings per share (a''EPSa''), headline
earnings per share (a''HEPSa''), net asset value per share (a''NAVPSa'') and net tangible asset
per share (a''NTAVPSa'').
These Financial Effects have been disclosed in terms of the JSE Limited Listings
Requirements (a''Listings Requirementsa'') and, because of their nature, may not fairly
present DRDGOLDa''s financial position, changes in equity, results of operations or cash flows
after the Transactions and Unbundlings. The Financial Effects are the responsibility of
DRDGOLDa''s directors.
Before the After the After the After the Change
Transactions ErgoGold Crown and Transactions (%)
(3)
and Disposal ERPM and
Unbundlings Disposals Unbundlings
(1)
and
Unbundlings
(3) (4)
EPS (cents) 52 (3) 22 71 36.5
(3) (4)
HEPS (cents) 52 (3) 22 71 36.5
(3) (4)
NAVPS (cents) 368 (17) 10 361 (1.9)
NTAVPS (cents) 460 - - 460 0.0
Weighted average 385 029 071 385 029 071 385 029 071 385 029 071
number of shares in
issue during the
Period
Shares in issue at 385 383 767 385 383 767 385 383 767 385 383 767
31 December 2011
Notes:
1. Based on DRDGOLDa''s interim results for the six months ended 31 December 2011 (a''the Perioda'').
2. The Financial Effects are based on the assumption that the Transactions and Unbundlings took
place on 1 July 2011 for statement of comprehensive income purposes and 31 December 2011
for statement of financial position purposes.
3. After taking into account the 9.1% increase in the non-controlling interest in EgoGold.
4. After taking into account the movement in deferred taxation using an effective tax rate based on
the gold mining tax formula of 28%. The movement in deferred taxation has arisen primarily from
unredeemed capital expenditure in Ergo.
CATEGORISATION OF THE TRANSACTIONS AND UNBUNDLINGS
DRDGOLD is the holder of 74% of the share capital of EMO. DRDGOLDa''s BEE partners,
Khumo Gold SPV (Proprietary) Limited ("Khumo Gold") and the DRDSA Empowerment
Trust (a''BEE Partnersa''), hold 20% and 6% respectively, of the remaining shares in EMO.
The ErgoGold Disposal, results in DRDGOLD's total effective equity interest in ErgoGold
changing from 83.1% to 74%, being an effective disposal of 9.1% for the DRDGOLD group
while the BEE Partnersa'' effective equity interest in ErgoGold changes from 16.9% to 26%.
The ErgoGold Disposal is therefore a Category 2 transaction in terms of the Listings
Requirements. The Crown Disposal and the ERPM Disposal and the Unbundlings are
exempt from the provisions of the Listings Requirements as DRDGOLDa''s effective interest in
the underlying assets and liabilities, the subject of these transactions, remains unchanged.
Roodepoort
3 July 2012
Sponsor
One Capital
Legal Advisors
Edward Nathan Sonnenbergs
Date: 03/07/2012 11:50:00 Supplied by www.sharenet.co.za
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