JOHANNESBURG (miningweekly.com) – Exploration is under way on the East Rand, which may result in a separately listed gold play.

“Perhaps we have another Goliath here,” says DRDGold CEO Niël Pretorius, a reference to DRDGold’s ERPM extension one and two, which adjoins the JSE-listed Goliath Gold, created last year when ASX- and JSE-listed Gold One and White Water Resources engaged in a reverse listing.

The name ERPM extension one and two is destined to be changed and should not be confused with the historic ERPM deep-level gold mine that DRDGold has closed.

Instead, ERPM extension one and two is an orebody that is situated below the old Sallies gold mine, on the East Rand.

The orebody has never been accessed and as a consequence, has no rehabilitation and underground water legacy issues.

JSE-listed DRDGold has appointed former Water Utilities Corporation executive and former Mintails caretaker CEO Jaco Schoeman to develop the two extensions into a separate investment opportunity for shareholders.

The competent persons report for the medium-depth resource, which is said to contain 18-million ounces of gold, is scheduled for completion at the end of February.

DRDGold has set aside R19-million for drilling to firm up the resource to levels of recognised compliance.

Benchmarking of the asset against the market capitalisation of next-door neighbour Goliath Gold has the full value of ERPM extension one and two at R800-million and the value for the DRDGold shareholders alone at R500-million.

“That’s the value if you benchmark it against a straightforward company-next-door standard without putting anything fancy into it,” Pretorius comments.

Schoeman will be conducting a road show in London and will also be gauging Chinese investor interest.

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