Mark Wellesley-Wood
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DRDGOLD to lift African exposure
David McKay
Posted: Tue, 29 Aug 2006

[miningmx.com] -- DRDGOLD, the gold producer, is to reduce its exposure to its Australasian mines in favour of its better performing South African mines and a developing strategy to find new sources of gold in Africa.

Mark Wellesley-Wood, DRDGOLD’s CEO, said the company would not follow its rights should Emperor Mines issue shares for cash. While this was not imminent, it was likely in the long run especially if Emperor was able to turn around its underperforming Papua New Guinea and Fiji mines.

“Africa has taken the back seat while we’ve attended to our corporate strategy,” said Wellesley-Wood. “But we’re interested in finding early stage or greenfields gold mining prospects in Africa. This will establish a third leg to the business,” Wellesley-Wood said.

DRDGOLD has a 79% stake in Emperor Mines, listed on the Australian Stock Exchange down from 86% following the issue of 40 million shares, a capital raising exercise in which DRDGOLD did not participate. The company is now the vehicle for the South African firm’s offshore mines following a reverse takeover of Emperor Mines completed in DRDGOLD’s 2006 financial year.

Emperor Mines is the fourth largest gold producer on the Australian Stock Exchange recording annual output of 211,425 ounces in DRDGOLD’s 2006 financial year. This is equal to about 40% of DRDGOLD’s total output for that financial year.

Brad Gordon, CEO of Emperor Mines told Miningmx that plans to take Emperor Mines to the Toronto Stock Exchange were on hold while it focused on improving its mines. Production was down by about a third year-on-year following redevelopment of the firm’s Porgera mine in which it has a 20% stake.

“Ultimately we think it [the new listing] is a good idea. But at the moment it’s imperative to turn the mines around,” Gordon said. Thereafter, the company would consider another listing coupled with a capital raising. But DRDGOLD would not follow its rights.
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“DRDGOLD is a supportive shareholder but it realises the benefits of owning a smaller part of a more profitable company,” said Gordon.

Commenting on the African strategy, Wellesley-Wood said there had been some difficulty finding potential acquisitions. “It’s very expensive. Nothing will register for some time,” he said.

DRDGOLD, which reported a 4% increase in gold production year-on-year last week, will unveil its year-end and June quarter financial results on September 21, it said.