DRDGOLD sells prospecting rights to White Water

[miningmx.com] — Junior gold miner DRDGOLD announced on Wednesday that it has signed heads of agreement with White Water Resources in terms of which White Water will acquire from DRDGOLD’s 74%owned subsidiary, East Rand Proprietary Mines Limited (ERPM), the prospecting right over ERPM Extensions 1 and 2 and the mining right over ERPM Extension 1.

ERPM’s mining right application over Extension 1 is pending.

Both extensions are contiguous to the ERPM lease area. Underground mining at ERPM was discontinued in November 2008.

The acquisition by White Water of the prospecting right over ERPM Extensions 1 and 2 and the mining right over ERPM Extension 1, for R18.5m, will be settled through the issue of 74 million ordinary shares in White Water and 26 shares in a special purpose vehicle (SPV) to be created which will hold the assets acquired by White Water from ERPM in terms of the transaction.

In the event that the Department of Mineral Resources does not approve
transfer of one or other of the prospecting or mining rights the consideration will be reduced to R9.3m to be settled through the issue of 37 million ordinary shares in White Water and 26 ordinary shares in the SPV to ERPM.

The transaction is subject to the successful conclusion of various conditions precedent, including approval of the transaction by White Water shareholders.

DRDGOLD CEO Niel Pretorius said: “Our stated strategy is to move increasingly towards gold recovery from re-treatment of surface tailings; the deep-level exploration assets we propose disposing of are much better placed in the portfolio of White Water, whose business is gold exploration.”