[miningmx.com] — DRDGOLD on Wednesday said its negotiations with Village Main Reef regarding the latter’s R150m bid for Blyvooruitzicht Gold Mining Company were “still continuing”.
DRDGold holds a 74% stake in Blyvoor, which it considers non-core to its strategy of focusing on the recovery of lower-risk, lower-cost, higher-margin ounces.
At present, 68% of production comes from surface retreatment operations.
The company said last month that it had received an expression of interest from Village regarding its stake in Blyvoor, which lies on the Witwatersrand Basin outside Carletonville.
The purchase consideration will be settled through the issue of Village shares to DRDGold.
Successful closure of the transaction would result in Village increasing its issued share capital by about 9% while more than doubling its gold reserves from 2.1 million ounces to some 7.4 million ounces and increasing gold resource ounces by 115%.
Furthermore, it is estimated that the acquisition of Blyvoor’s 85,000 ounces of gold production would result in Village producing more than 250,000 ounces of gold per annum from its operations.
From DRDGold’s perspective, the proposed transaction provides it with an opportunity to eliminate any further funding exposure towards Blyvoor while retaining significant further indirect potential upside from its historic investment in Blyvoor, via its shareholding in Village.
DRDGold has granted Village an exclusive 60-day right to acquire the assets. This period is set to expire in early January.
At 11:50 shares in DRDGold were up 2.50% at R4.92 on the JSE. The stock has, however, shed 11.19% or 62 cents this month to date.
