John Sayers, CEO, DRDGOLD
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» Wellesley-Wood scores on DRDGOLD's asset sale
» DRDGOLD locks in R324m on Emperor
» DRDGOLD may sell Emperor Mines
» DRDGOLD comes home amid R1.3bn Oz loss
» West Wits brings uranium, gold to ASX and JSE
» DRDGOLD's final throw of the dice

» JSE:DRDGOLD LIMITED:
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DRDGOLD to lose 50kg output in mine closure
Allan Seccombe
Posted: Mon, 22 Oct 2007

[miningmx.com] -- DRDGOLD expects to lose 50 kg (1,608 oz) of gold output from its Blyvoor mine, which was shut after a worker was killed there last week, but the government is expected to allow mining operations to resume on Wednesday, said CEO John Sayers.

DRDGOLD has finally sold its stake in Australia’s Emperor Mines, giving its balance sheet a healthy cash injection to grow its South African assets, explore and possibly set up Argonaut for sale, he said.

The Department of Minerals and Energy (DME) ordered the closure of three shafts pending an independent risk assessment, the results of which have to be presented to the Principal Inspector of Mines.
wasn’t the best adventure we ever embarked on
DRDGOLD wants the closure notice to apply just to the affected stoping area, where the worker was killed in a rock burst on Friday.

However, the company is not opposed to the DME’s recently adopted strategy of temporarily closing shafts where fatal or large accidents have occurred, said Sayers.

“We accept there’s a focus on safety and we are repositioning ourselves for that. A lot of that will be re-training,” Sayers told Miningmx in a telephone interview, pointing out the mine has this year won a safety award.

DRDGOLD has shifted mining to lower grade areas out of those with higher grades because of seismicity issues as it strives for safety at the mine, he said.

“This incident was a pressure burst, which you can’t predict at all,” he said.

“We think we’ll be clear by Wednesday,” he said. Management and DRDGOLD’s black empowerment partner Khumo Bathong Holdings have been meeting with the DME to reach resolution on the closure.

Blyvoor has surface material to treat during the closure period, Sayers said. DRDGOLD’s shares fell 2.3% on Monday to R5.18 each on the Johannesburg bourse in line with a broader sell off in the gold share index.

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Anglo Platinum has been ordered to suspend operations at three shafts after a death there last week and Northam Platinum has suspended underground operations at its sole mine because of deaths there.

Anglo Platinum is estimated to be losing 1,300 oz of refined platinum a day and Northam some 850 of platinum group metals a day.

Harmony Gold was ordered to suspend its Elandsrand mine after 3,200 workers were trapped for underground for up to 30 hours. Management has said the 48-day closure will result in the loss of 32,150 oz of gold.

DRDGOLD on Monday concluded the sale of its 78.7% in Australia’s Emperor Mines, raising R340m towards its balance sheet and cutting adrift assets that had vacuumed cash out of the South African assets.

“That wasn’t the best adventure we ever embarked on, but at least we’ve had the guts to can it,” Sayers said. He estimated R100m per quarter was flowing into the Australasian operations, which would now be better utilised in South Africa.

“When the proceeds flow through, we’ll have about R600m on the balance sheet. At the current gold price we are self funding after capex and we’ll go from there,” he said.

DRDGOLD is now firmly focussed on South Africa and Sayers ruled out looking for assets north of the country’s border, saying DRDGOLD had learnt hard lessons in its foray into Australasia, especially pertaining to infrastructure.

DRDGOLD will look for growth from its own assets – both gold and uranium -- and possible acquisitions, he said. It will also look at the sale of assets.

It has the Argonaut project on the outskirts on central Johannesburg that it is exploring, but the gold lies up to 5km below surface. “Argonaut’s not a bad asset. It could turn out to be another Wits Basin if it comes out with the test results we expect. I doubt we would invest in it. We’d probably sell it.”

DRDGOLD has set up an assaying laboratory to assess how much uranium it has in its dumps. It has formed a joint venture with Australia’s Mintails called West Wits Mining, which will be listed on the Australian and South African bourses later this year.

West Wits has plans to bring some 2.4 million pounds to the market from a tailings treatment programme.