Media releases

DRD secures loan to finance Papua New Guinea expansion

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Published: Monday, 12 November 2001 02:00

Durban Roodepoort Deep, Limited (DRD) has concluded a three-year loan agreement with the Bank of South Pacific for A$4.2 million to finance the capital expenditure required to increase production at its Tolukuma Gold Mine in Papua New Guinea (PNG) by 50% to 120 000 ounces a year. 071/01-jmd

Durban Roodepoort Deep, Limited (DRD) has concluded a three-year loan agreement with the Bank of South Pacific for A$4.2 million to finance the capital expenditure required to increase production at its Tolukuma Gold Mine in Papua New Guinea (PNG) by 50% to 120 000 ounces a year.

The funds will be used to increase the size of the production fleet and to accelerate exploration activity on DRD’s extensive land holdings in Papua New Guinea.

Brett Duck, DRD’s Regional Exploration Manager, says Tolukuma continues to encounter highly encouraging grades at both the Saki and Kunda prospects. Recent sampling has returned gold grades averaging 15 g/t over one metre, with silver grades similar to the 80 g/t found at Tolukuma.

Mining activity in the Miliahamba prospect, which contains the high grade Kunda vein, will increase the planned life of the operation to over five years, taking its NPV to in excess of US$75 million, more than double the original purchase price. This is in line with DRD’s strategy of lengthening the lives of its gold mines.

“We have completed the work to access the deeper parts of the Tolukuma vein and with the opening of the new Miliahamba deposit, situated at the southern end of the mining lease, DRD is clearly demonstrating its commitment to PNG. Our exploration budget will increase over the next few years as we work through the most exciting target areas in the country,” said Mark Wellesley-Wood, DRD Chairman and CEO.

Mine Manager Graeme Collins is also upbeat about the new mine and the renewed exploration effort: “After two years of settling down the current operation, we now have the additional resources to make Tolukuma a significant contributor in the DRD stable, with gold production planned to rise to 115 000 oz next year. Life expectancy will be further enhanced by the increased exploration programme we are currently undertaking.”

Queries:

James Duncan
27 11 880-3924 (office)
27 82 892-8052 (mobile)

Russell & Associates
Charmane Russell
27 11 8803924 (office)
27 82 372-5816 (mobile)