DRDGold wants AMD claims clarified

[miningmx.com] – DRDGOLD is to meet with the Department of Water
this week, in which it intends to clarify its position regarding the treatment of acid
mine drainage (AMD).

It will also seek a clarification of statements made by Water and Environmental
Affairs Committee Chairman, advocate Johnny de Lange, in parliament last week that
government should “. make sure they [DRDGold] pay for every damn thing’.

Shares in DRDGold fell 10 South African cents to R5,05/share on Tuesday following
the comments, but recovered to R5.25/share by Friday.

Niel Pretorius, CEO of DRDGold, said comments by De Lange that the company should
pay for everything had send “a nervous ripple through the market’, and that the
company was waiting on legal advice regarding how it should clarify the prospect of
incurring costs.

Said Pretorius: “We have to make a public response to that and then engage in a
process to set the record straight so that the market knows’.

Pretorius also said that DRDGold had asked for guarantees from the Trans-Caledon
Tunnel Authority (TCTA) that the gold company would incur no additional costs if it
were to adopt the TCTA’s plan for AMD in preference to its own. TCTA was drafted in
by the Department of Water Affairs last year to investigate government’s plan for
AMD after the department rejected a proposal by Western Utilities Corporation
(WUC), in which DRDGold is a shareholder.

The WUC proposal on AMD is internally financed, uses existing mine infrastructure,
and has received technical sign-offs, whereas TCTA is yet to formulate its feasibility
study for AMD. “The TCTA has been on our mine to conduct a feasibility study, but we
said that we can’t adopt a proposal that fails to limit the downside for the mine as
the WUC proposal does,’ said Pretorius.

“If they can’t allow us to limit our own downside exposure then they have to
guarantee that the new proposal does not add any new risks,’ Pretorius said,
adding that the water department’s rejection of the WUC proposal for AMD was
baseless. “They gave three reasons, all of which were irrelevant,’ he said.

Pretorius’ position on providing guarantees was then communicated by the TCTA to
the Water and Environmental Affairs Committee in parliament last week, which the De
Lange construed as an act of bribery. “How can people blackmail you, to tell you we’ll
give you access to the land . but by doing that we want to be indemnified from any
other obligations,’ De Lange is reported by newswire Sapa to have said. “How can we
even negotiate with people like this? We should give them directives . and tell them
to do it! And if they don’t, we should donner [beat] them,’ he said.

Pretorius said the TCTA proposal to treat AMD, which in a year will be just below the
environmentally accepted level of 174 metres beneath the surface, would cost R1.5bn.

Part of the cost would be allocated to gold miners still operating in the region –
DRDGold and Central Rand Gold – with the shortfall funded by government, or
“taxpayers ultimately,’ said Pretorius. Pretorius said he had emailed De Lange as
requested to explain DRDGold’s position, but he had not received a response.