Roger Kebble responds

[] — Attention: David McKay
Editor: Miningmx

07 April 2005

Dear David

Thank you for agreeing to grant me the right to reply to your article – “Bad Blood Rising – 04 April’. While I found the tone of the article negative and destructive, it does however serve to highlight that from DRDGOLD’s perspective at least, the issues are vexed and that the company is finding it difficult to let go.

Had you spoken to me prior to publishing your article, I would have told you that there are indeed very good reasons why I would have every reason not to want to settle with DRDGOLD and Mark Wellesley Wood. I would however also have told you that there are even better reasons for us to settle our differences, such as making a meaningful contribution to ensuring a viable future for the South African gold mining industry.

I am reluctant to revisit old grievances, but since you brought them up, I have no choice but to clarify some issues.

It is true that all of us in the executive team were initially impressed by Mark’s abilities when he was recommended to us in 1999 and that we felt he could add value at certain levels. While it soon became very clear that status and money were important to him, we did not realize the lengths he would go to in order to entrench his position in the company.

Given his relentless quest to wrest control of the company, hostilities were inevitable and he steered a collision course very early on in our relationship. You refer, for instance, to the infamous work-permit issue. It still amazes me that having failed to adhere to the basic work permit requirements of the Department of Home Affairs; Mark pointed the finger in my direction when he was caught out. Of far more interest, in my view, is that he managed to resolve the situation by enlisting the help of Baroness Margaret Thatcher, who in turn persuaded the then Minister of Home Affairs, Chief Mangosuthu Buthelezi (who had previously received support from Mrs Thatcher’s government) to waive the rules for him.

I can only think that it was at that point that he became paranoid about staff loyalty and began instituting questionable surveillance techniques to monitor key staff members, a practice that resulted in much public bitterness and recriminations. Of course, Mark was no stranger to covert activities, having also employed the services of Associated Intelligent Networks (AIN), headed by one Warren Goldblatt. My views on this organization are well documented and AIN’s actions are now the subject of legal action. Suffice to say that the two members of the South African Police (SAPS) who were bribed to effect my arrest in November 2000, are now working for AIN.

These issues are due to be ventilated in a court hearing set for July 27 this year, in respect of which the Constitutional Court has given myself and others wronged by his actions the right to claim punitive damages from Mark and his agents.

We have very good reasons to pursue Mark for what he has done because, as you rightly say David, he has caused us great harm and as a result we have very substantial claims against him, his agents, co-directors and DRDGOLD itself.

Some of these claims revolve around a trumped up fraud case motivated by Mark which was thrown out by the courts, but not before I had been subjected to two years of harassment.

It is abundantly clear that the State was misled by a prosecution docket that had been created by Mark and his agents.

As a result of Mark’s behaviour I have had to endure substantial humiliation in the market place and elsewhere, a fact which is particularly galling in light of the fact that it was me and my team who built DRDGOLD into an asset worth fighting over in the first place.

Equally irksome is Mark’s persistent attempt to view the Rawas transaction as something sinister. No discussion on Rawas would be complete without it being pointed out that the acquisition of Rawas took place as part of the same strategy that saw DRD acquire Tolukuma Mine in Papua New Guinea which has been extremely successful and is, by common cause, one of the most lucrative assets in the DRDGOLD portfolio. What Mark fails to acknowledge is that the acquisition of Rawas in Indonesia, Hargreaves Mine in Australia and Tolukuma was part of a cohesive strategy. Hargreaves was intended to fund the exploration of Rawas, and, had it not been for the catastrophic flooding which subsequently closed Hargreaves, I have no doubt that we would have been able to conduct a successful exploration of the extensive deposits that lie there.

Two years ago, when the cracks in the local DRDGOLD operations began to show, the National Union of Mineworkers (NUM) called upon Mark and his team to either institute a turn-around strategy, or sell the assets to someone who could. It was at this point that he was offered R1 for the North West division. Had he accepted, he would have saved himself and his shareholders in excess of R240 million and the liquidators would not now be sifting through the wreckage.

While all of the above provide very good reasons why I should bear a grudge, one can’t ignore the fact that the mining industry is on the verge of additional calamities and for this reason we are duty bound to at least try and resolve our differences. I have offered to, and am still prepared to, negotiate a constructive settlement with DRDGOLD that will focus on a solution for all of DRDGOLD’s local operations. I can’t emphasize strongly enough that DRDGOLD’s assets were put together as a unit to be sustainable and therefore should be sold as a whole to allow future sustainability. The mixed messages coming out of the DRDGOLD camp are cause for concern for anyone who cares about the South African gold mining industry. There is, for example, no need for Blyvoor’s ore reserves to be consumed at four times the rate it’s being developed. This practice of high grading means that Blyvoor’s life will be shortened and is thus unsustainable. Ian Murray’s comments (Miningmx – April 6) confirm my suspicions that DRDGOLD is preparing itself to get rid of its SA assets, and move “up’ the value chain. After all, why would DRDGOLD want to keep the SA assets in such circumstances?

I find it interesting that you dismiss my attempts to negotiate in good faith with Mark. I can understand that having deliberately set out to mislead the market by vilifying me and everything associated with me, Mark may fear a loss of credibility if he sells back to me. Mark may have his shortcomings, but he is no fool. He is well aware that we have the operational expertise to salvage what’s left of the assets.

If, after all that has transpired between us, I am able to see beyond our personal differences, then there is no reason why he shouldn’t as well.

Yours sincerely

Roger Kebble

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