Johannesburg, South Africa — MININGREVIEW.COM — 16 April 2010 – DRDGOLD Limited – South Africa’s fourth-largest gold producer with both operational and exploration activities – has announced that South African Competition Commission approval has been obtained for its acquisition of the 50% equity interest of Mintails Limited (Mintails) in Ergo Mining (Pty) Limited (Ergo).
Ergo was created as a 50:50 joint venture by DRDGOLD and Mintails in November 2007 to explore, evaluate and process up to 1.7 billion tonnes of surface gold, uranium and sulphur bearing tailings from the East and Central Rand goldfields of South Africa.
DRDGOLD announced on 21 January 2010 that it had agreed to acquire “’ subject to certain suspensive conditions, including Competition Commission approval “’ Mintails’ 50% of Ergo for a total consideration of just over R82 million. R62 million would be settled in cash and the balance in shares in the Witfontein tailings deposition site on the Far West Rand, valued at R20 million.
All of the suspensive conditions relating to the transaction have now been met.
DRDGOLD has wholly owned the gold circuit of Ergo, known as ErgoGold, since December 2008, having acquired Mintails’ 50% interest in two separate transactions worth a total of R277 million.
DRDGOLD CEO Niël Pretorius commented: “Full ownership of Ergo is a major step in our strategic shift towards lower-risk, lower-cost, higher-margin gold production from surface sources, providing a key, logistical platform for substantial future growth through exploitation of synergies with our Crown surface operation.”
He added that DRDGOLD would also continue to explore prospects for uranium and sulphur production through Ergo’s Brakpan plant.