6% DRDGOLD to put mine into judicial care
Reuters | Mon, 09 Nov 2009 12:51[miningmx.com] -- South African miner DRDGOLD will seek seek a high court order to place its troubled Blyvoor mine under judicial management to save it from liquidation. DRDGOLD said the move had been prompted by the operation's continued losses, which had now reached 27 million rand ($3.63 million) a month, as well as extensive damage to higher-grade underground production areas caused by seismic activity in May. Chief Executive Niel Pretorius also said the mine's situation had been worsened by a recent four-week strike by workers over pay and power utility Eskom's higher winter tariffs, compounded by a 32 percent increase in July. "We now need a rescue plan that holds real promise of saving Blyvoor from insolvency," Pretorius said in a statement. "Judicial management is the only appropriate course of action for us to take in the face of the combined negative impact of circumstances beyond the control of the board of directors and management." He said the company had spent R75m over the past three months to try to save the operation. Under judicial management, the High Court of South Africa would appoint a judicial manager who would seek to save the struggling mine through a number of actions. "These could, for example, include giving certain creditors temporary preference over others and agreeing compromises with creditors without the risk of committing an act of insolvency and thereby exposing the mine to liquidation," the company said. It expected the mine to remain under judicial management until the high-grade production areas that were closed due to seismic activity were reopened.
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