Media releases

‘decisive actions’ create platform for recovery and growth

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Published: Thursday, 21 April 2005 02:00

DRDGOLD today announced that remedial actions taken in the past quarter, coupled with a continued turnaround at the South African operations’ Blyvoor mine, have established a sound platform for the company’s recovery and future growth

Johannesburg, South Africa. 21 April 2005. DRDGOLD Limited (JSE: DRD; NASDAQ: DROOY; ASX: DRD; POM SoX: DRD) today announced that remedial actions taken in the past quarter, coupled with a continued turnaround at the South African operations’ Byvooruitzicht (Blyvoor) mine, have established a sound platform for the company’s recovery and future growth, says Chief Executive Officer Mark Wellesley-Wood.

Key amongst these actions was the provisional liquidation of Buffelsfontein Gold Mines Limited (Buffels) and the consequent discontinuation of mining at the North West Operations.

The focus on better production and the liquidation of Buffels meant DRDGOLD reported a 16% decline in gold production to 187 651 ounces (5 836 kilograms) for the quarter ended 31 March 2005,

The effect of the liquidation of Buffels, Wellesley-Wood said, was to immediately staunch the unsustainable drain on DRDGOLD’s resources, particularly from its offshore operations, in the preceding six months.

Other remedial measures have included a 30% reduction in DRDGOLD’s corporate headcount, a 50% cut in corporate costs and the sale of the company’s Johannesburg corporate office.

Funding for future growth had also been a major focus in the quarter under review, Wellesley-Wood said, the key contributors being a R180 million share issue and claw back offer and R38 million recovered from JCI Limited and Consolidated African Mines (CAM).

Although gold production from the company’s Australasian operations was 10% lower at 79 334 ounces (2 467 kilograms) due mainly to mining and ore treatment difficulties at Porgera and to disappointing results from Emperor, production from the South African operations, excluding the discontinued North West Operations, was slightly higher at 60 733 ounces (1 889 kilograms).

A 6% increase in gold production at Blyvoor to 39 995 ounces (1 244 kilograms) reflects both continued application of the new mining plan, together with further throughput improvements achieved at the Slimes Dam Project.

Underground gold production was 7% higher at 33 115 ounces (1 030 kilograms) and surface gold production 4% higher at 6 880 ounces (214 kilograms). Development, focused on 5 and 6 Shafts, increased by 76% to 453 square metres. Blyvoor’s productivity, in terms of grams per total employee costed (g/tec), increased by 6% to 124.75 g/tec.

A six-month project is under way to determine the viability of re-establishing mining operations from Blyvoor’s 2 Shaft sub-shaft, at an estimated capital cost of R50 million (US$8.0 million). If viable, this project could restore the Life of Mine (LOM) to 20 years. At the Slimes Dam Project, an investigation is in progress to determine the potential for increasing throughput by 33% from 240 000 tonnes per month to 320 000 tonnes at an estimated capital cost of R7 million.

Gold production from the 40%-owned Crown Gold Recoveries (CGR) ERPM and Crown Surface operations was 4% and 8% lower respectively. At ERPM, technical problems – now resolved – led to a 7% decline in underground gold production to 7 433 ounces (231 kg), while gold production from the Cason surface retreatment project was 6% higher at 2 662 ounces (83kg), reflecting a 17% improvement in yield to 0.42 grams per ton.

“The South African operations are now running at a breakeven situation, meaning the option is ‘back in the money’. Our balance sheet health has been restored and this, together with our offshore cash flow, is now available to establish a new platform for growth,” said Wellesley-Wood.

Queries:

South Africa
Investor and Media Relations
Ilja Graulich, DRDGOLD
+27 11 381 7826 (office)
+27 83 604 0820 (mobile)

James Duncan, Russell & Associates
+27 11 880 3924 (office)
+27 82 892 8052 (mobile)

North America
Investor and Media Relations
Barbara Cano, Breakstone & Ruth International
+1 646-536-7015 (office)

Australasia
Investor and Media Relations
Paul Downie, Porter Novelli
+61 893 861 233 (office)
+61 414 947 129 (mobile)

United Kingdom/Europe
Investor and Media Relations
Phil Dexter, St James's Corporate Services
+44 20 7499 3916 (office)
+44 779 863 4398

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DRDGOLD is an intermediate unhedged gold producer with mines in South Africa as well as Australasia. The company’s production profile is split equally between its highly leveraged SA operations and its low cost, cash generative offshore mines.

DRDGOLD has primary listings on the Johannesburg (JSE:DRD) and Australian (ASX:DRD) stock exchanges and secondary listings on NASDAQ (DROOY), the London and Port Moresby stock exchanges and the Paris and Brussels Bourses. Its shares are also traded on the regulated unofficial market of the Frankfurt Stock Exchange and the Berlin OTC Market.

For more information, please visit www.drdgold.com

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FORWARD-LOOKING STATEMENTS
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or other financial performance, including forward-looking statements and information relating to DRDGOLD that are based on the beliefs of management, as well as assumptions made by and information currently available to management. When used in this press release, the words "estimate", "project", "believe", "anticipate", "intend", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect management¹s current views with respect to future events and are subject to risks, uncertainties and assumptions. These statements include the Company's ability to continue as a going concern, its ability to successfully restructure the South African operations and, in particular the North West operations, its ability to significantly reduce its costs in South Africa, its ability to fund its future commitments, including the restructure of the North West Operations.

Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in the gold price, a continuing strengthening of the Rand against the Dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licenses or other governmental approvals, changes in DRDGOLD¹s competitive position, changes in business strategy, any major disruption in production at our key facilities or adverse changes in foreign exchange rates and various other factors.

These risks include, without limitation, those described in the section entitled "Risk Factors" included in our annual report for the fiscal year ended 30 June 2004, which we filed with the United States Securities and Exchange Commission on 29 November 2004 on Form 20-F, as amended by the Form 20-F/A filed on December 3, 2004, and those detailed from time to time with the United States Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to the occurrence of unanticipated events.

This release is not an offer of securities for sale in the United States. These securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from DRDGOLD, which will contain detailed information about DRDGOLD and its management, as well as financial statements.