DRDGOLD LIMITED - Amendment to the share sale and subscription agreement entered into between DRDGOLD and Khumo Gold SPV (Pty) Ltd

Amendment to the share sale and subscription agreement entered into between DRDGOLD and Khumo Gold SPV (Pty) Ltd

DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE share code: DRD
ISIN: ZAE000058723
NYSE trading symbol: DRD
(“DRDGOLD”)

AMENDMENT TO THE SHARE SALE AND SUBSCRIPTION AGREEMENT ENTERED INTO BETWEEN 
DRDGOLD AND KHUMO GOLD SPV (PROPRIETARY) LIMITED (“KHUMO”)

1. INTRODUCTION

  DRDGOLD shareholders (“Shareholders”) are referred to the announcement published on
  the Stock Exchange News Service on 18 March 2014 and the circular to Shareholders
  dated 6 May 2014 (“Circular”), wherein Shareholders were advised that a share sale and
  subscription agreement was concluded between DRDGOLD and Khumo, a black economic
  empowerment (“BEE”) partner of DRDGOLD, (collectively, the “Parties”), as amended
  (“Agreement”).

  Unless otherwise indicated, capitalised words and terms contained in this announcement
  shall bear the same meanings ascribed thereto in the Circular.

  In terms of the Agreement, Khumo acquired 35 000 000 new ordinary shares in DRDGOLD
  (“DRDGOLD Shares”).

  Ministerial consent was required to be procured from the Department of Mineral Resources
  (“DMR”) in terms of the Agreement; in accordance with the provisions of the Mineral and
  Petroleum Resources Development Act, 28 of 2002 (“MPRDA”). Ministerial consent was
  granted in or around February 2015 in terms of which the Minister of Mineral Resources
  unequivocally confirmed that in respect of the group’s existing mineral interests, the direct
  ownership stake acquired by Khumo would translate into an effective 8.12% shareholding
  and 2.43% shareholding held by the DRDSA Empowerment Trust in DRDGOLD
  respectively; in terms of the Agreement, would be recognised as a 26% beneficial interest
  in the group, in compliance with the provisions of sections 2(d) and 2(f) of the MPRDA and
  may be reported as such.

  Pursuant to the Agreement, Khumo was restricted from disposing of or encumbering the
  DRDGOLD Shares for a period of 3 years until 10 April 2018 (“Lock-in Period”).

  Khumo sought approval from Shareholders to enter into hedging arrangements for
  purposes of securing the value of the DRDGOLD Shares subject to compliance with the
  Lock-in Period.

  To enable Khumo to enter into a hedging arrangement, Khumo is required to enter into a
  securities lending arrangement with a financial institution which would result in a technical
  breach of the Lock-in Period terms. It was, however, always the Parties’ intention that
  Khumo would, during the Lock-in Period be capable of concluding such an arrangement
  provided that such hedging arrangement does not encroach upon the BEE status of the
  group’s existing mining and prospecting rights.

2. AMENDMENT OF THE AGREEMENT

   In the interest of assisting Khumo to protect the financial and commercial gains realised
   through its interest in the DRDGOLD Shares, pursuant to the objectives of BEE and
   transformation in South Africa, it was agreed that the Agreement be amended.

   In light of the above, DRDGOLD and Khumo procured the approvals necessary to ensure
   that the proposed hedging transaction would not have any negative impact on the standing
   of the group’s existing mining and prospecting rights and an addendum to the Agreement
   became effective on 10 March 2017, which allows for the hedging arrangement to be
   concluded (“Amendment”).

   As a result of the Amendment comprising an immaterial change to the Agreement that is
   congruent with the Approved Transaction and which does not affect DRDGOLD financially
   or its existing mining and prospecting rights, no approval of the Amendment is required.
   This has been confirmed with the JSE Limited (“JSE”) pursuant to the JSE Listings
   Requirements.

   After the hedging arrangement has been concluded, Khumo will continue to hold a direct
   interest in and have voting rights attributable to 22 000 000 DRDGOLD shares, however,
   its beneficial interest shall continue to extend to all 35 000 000 of the DRDGOLD Shares
   until the expiry of the Lock-in Period.

   The DMR has approved the Amendment and confirmed that the Amendment will not have
   the effect of diluting the BEE status of the group and is in compliance with the provisions
   of the MPRDA.


Johannesburg
16 March 2017

Sponsor
One Capital

Attorneys
Malan Scholes Incorporated

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