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Roll-up, roll-out of DRDGold’s rejigged BEE

28th March 2014

By: Martin Creamer

Creamer Media Editor

  

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JSE- and NYSE-listed gold mining company DRDGold said last week that it had reached agreement with its black economic-empowerment (BEE) partners, Khumo Gold and the DRDGold empowerment trust, to substitute its nine-year-old BEE structure with a new arrangement.

The total value of the transaction is R191-million.

Currently, DRDGold’s BEE partners hold shares at an operating level through the company’s subsidiary, Ergo Mining Operations – Khumo with a 20% stake and the trust with 6%.

The new deal involves Khumo and the trust exchanging their interests in the Ergo Mining Operations asset for 35-million and 10.5-million new DRDGold ordinary shares respectively at JSE holding level.

The effect of the agreement is to give Khumo an 8.1% interest and the trust a 2.4% interest in DRDGold, headed by CEO Niël Pretorius, who stated in a media release that this ensured mining right compliance.

The company said that it also provided Khumo and the trust with an opportunity to monetise the value of their interests in Ergo Mining Operations on a liquid JSE market, which would further South Africa’s BEE objectives.

The transaction had the added benefit of introducing operational and capital management flexibility for DRDGold over its core business.

The conclusion of the agreement was subject to both Department of Mineral Resources and share-holder consent, with Khumo and the trust agreeing not to sell their shares for a period of three years.

Edited by Martin Zhuwakinyu
Creamer Media Magazine Managing Editor

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