DRDGOLD Limited: DRD: DRDGOLD LIMITED – Forecast Financial Information, Pro Forma Financial Information and Withdrawal of Cautionary

Tickers: DRD
6 February 2018

DRD: DRDGOLD LIMITED - Forecast Financial Information, Pro Forma Financial Information and Withdrawal of Cautionary

DRD: DRDGOLD LIMITED - Forecast Financial Information, Pro Forma Financial Information and Withdrawal of Cautionary
Forecast Financial Information, Pro Forma Financial Information and Withdrawal of Cautionary

DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE share code: DRD
ISIN: ZAE000058723
NYSE trading symbol: DRD
('DRDGOLD' or the 'Company')

FORECAST FINANCIAL INFORMATION AND PRO FORMA FINANCIAL INFORMATION IN RELATION TO THE PROPOSED TRANSACTION AND WITHDRAWAL OF CAUTIONARY

Unless otherwise indicated, capitalised words and terms contained in this announcement shall bear
the same meanings ascribed thereto in the announcement published by DRDGOLD on SENS on
Wednesday, 22 November 2017 ('Transaction Announcement').

INTRODUCTION

In terms of the Transaction Announcement, Shareholders were advised of, inter alia:

    -   the proposed acquisition by DRDGOLD of the WRTRP Assets, by way of the acquisition of a
        100% shareholding in WRTRP from Sibanye-Stillwater; and
    -   the granting of the Option to Sibanye-Stillwater,

collectively referred to as the 'Proposed Transaction'.

FORECAST FINANCIAL INFORMATION OF WRTRP

Shareholders are advised that the current application and use of the WRTRP Assets by
Sibanye-Stillwater is significantly different to the intended application and use of the WRTRP Assets
by DRDGOLD, following the reconfiguration thereof. Accordingly, the revenue and cost profiles of the
WRTRP Assets following the reconfiguration thereof by DRDGOLD will be significantly different to the
historic revenue and cost profiles.

In these circumstances, and for purposes of illustrating the expected financial performance of WRTRP
following the implementation of the Acquisition and reconfiguration of the WRTRP Assets by
DRDGOLD, forecast financial information of WRTRP has been prepared.

The table below sets out the forecast financial information of WRTRP for the six months ending
30 June 2019 and the six months ending 31 December 2019 ('Forecast Financial Information').

The Forecast Financial Information has been prepared based on certain assumptions outlined below,
including, on the assumption that the Proposed Acquisition becomes unconditional on 30 April 2018
and that the re-configuration of the infrastructure acquired and related ramp-up (including gold lock-
up) to obtain steady-state production is obtained 8 months thereafter, being 31 December 2018.

The Forecast Financial Information has been prepared in compliance with International Financial
Reporting Standards ('IFRS') and in accordance with the accounting policies of DRDGOLD.

The Forecast Financial Information, including the assumptions on which it is based and the financial
information from which it is prepared, is the responsibility of the Board. The Forecast Financial
Information has not been reviewed or reported on by the reporting accountants and auditors of
DRDGOLD.
                                                                                  Forecast              Forecast
                                                           Forecast              financial             financial
                                                          financial         information of        information of
                                                     information of          WRTRP for the         WRTRP for the
                                                      WRTRP for the               6 months             12 months
                                                           6 months                 ending                ending
                                                     ending 30 June            31 December           31 December
                                                               2019                   2019                  2019
R million                                                (unaudited)            (unaudited)           (unaudited)

Revenue                                                       508.7                  502.0               1 010.7
Cost of sales                                                (312.0)                (308.9)               (620.9)
Gross profit from operating activities                        196.7                  193.1                 389.8
Finance income                                                 13.9                   14.4                  28.3
Finance expense                                               (25.4)                 (13.1)                (38.5)
Profit before tax                                             185.2                  194.4                 379.6
Income tax                                                    (73.3)                 (76.9)               (150.2)
Profit for the period                                         111.9                  117.5                 229.4
Total other comprehensive income                                  -                      -                     -
Total comprehensive income                                    111.9                  117.5                 229.4


The Forecast Financial Information is further based on, inter alia, the following material assumptions, as extracted
from the draft Competent Persons Report of WRTRP ('CPR'):

 1)  Revenue:
     a) Forecast gold price of R 564 245 per kilogram based on available market forecasts. The forecast gold
          price is subject to fluctuations in both the US$ price of gold and the rand/dollar exchange rate. The
          historic gold price has fluctuated widely and the gold price is affected by a number of factors over
          which the Directors have no control. *
     b) Throughput of approximately 500 000 tonnes per month. **
     c) An average recovered grade of 0.294 g/tonne. The recovered grade is a function of both an average
          head grade assumption based on the Mineral Reserves and a recovery efficiency based on
          metallurgical test work. The studies as contained in the draft CPR are performed on controlled
          laboratorium conditions and do not consider operational challenges. *

 2) Costs of Sales consists of:
     a) Working costs per ton processed of R63.97 (excluding contingency) inflated at 6%. **
     b) A contingency of 15% added to the working costs per ton. **
     c) Depreciation calculated as follows: Fair value allocated to assets acquired and capital expenditure
          incurred of R283 million (initial capital) depreciated over the estimated useful life. **

 3) Finance income recognised on the Rehabilitation Trust Funds calculated at a market related rate of 7% per
    annum compounded annually based on the expected opening balance of the Rehabilitation Obligation Fund
    at 1 January 2019. *

 4) Finance expense consists of:
     a) The unwinding of the provision for environmental rehabilitation at a pre-tax rate of 9% compounded
          annually on the expected opening balance of the provision at 1 January 2019.*
     b) The interest charge recognised on the financing of the initial capital, calculated at an expected market
          related rate of 12% per annum compounded monthly, and allowing for the settlement of the liability with
          the initial forecasted cash flows generated from the WRTRP operations.

 5) Income tax expense was calculated as 30% of taxable income based on the formula for the taxation of gold
    mining companies. *

* Material assumptions that cannot be influenced by the Directors.
** Material assumptions that can be influenced by the Directors and which are subject to risks and uncertainties
   outside the control of the Directors.

PRO FORMA FINANCIAL INFORMATION OF DRDGOLD

The table below sets out the pro forma statement of financial position of DRDGOLD ('Pro Forma
Financial Information') which has been prepared to illustrate the effect of the Proposed Acquisition
and the Specific Issue on the published, audited consolidated statement of financial position of
DRDGOLD as at 30 June 2017, had the Proposed Acquisition and the Specific Issue been
implemented on 30 June 2017.

The Pro Forma Financial Information has been compiled using the accounting policies that comply
with IFRS and that is consistent with those applied in the published, audited consolidated annual
financial statements of DRDGOLD for the year ended 30 June 2017.

The Pro Forma Financial Information is the responsibility of the Board and is provided for illustrative
purposes only and because of its nature, may not fairly present the financial performance, financial
position, changes in equity or cash flows of DRDGOLD after the implementation of the Proposed
Acquisition and the Specific Issue.

The Pro Forma Financial Information has not been reviewed or reported on by the reporting
accountants and auditors of DRDGOLD.

                                                                                             After the
                                                                                              Proposed
                                                                                           Acquisition
                                                 Proposed        After the       Specific      and the
                                              Acquisition         Proposed          issue     Specific
                                 Before        Adjustment      Acquisition     Adjustment        Issue
R million                        Actual                          Pro forma                   Pro forma
                             (unaudited)       (unaudited)     (unaudited)    (unaudited)   (unaudited)
ASSETS
Non-current assets               1 739.1          2 474.7         4 213.8              -       4 213.8
Property, plant and
equipment                        1 497.6          2 121.0         3 618.6              -       3 618.6
Investments in
rehabilitation obligation
funds                               227.7           353.7           581.4              -         581.4
Investment in other
entities                              8.8               -             8.8              -           8.8
Deferred tax asset                    5.0               -             5.0              -           5.0

Current assets                      548.3            (7.4)          540.9          587.1        1128.0
Inventories                         180.3               -           180.3              -         180.3
Trade and other
receivables                         114.3               -           114.3              -         114.3
Cash and cash
equivalents                         253.7            (7.4)          246.3          587.1         833.4

TOTAL ASSETS                      2 287.4         2 467.3         4 754.7          587.1       5 341.8
                                                                                                       
EQUITY AND LIABILITIES
Equity
Equity                             1 302.4        2 241.6        3 544.0           587.1        4 131.1

Non-current liabilities              728.0          222.5          950.5               -          950.5
Provision for environmental
rehabilitation                       531.7          222.5          754.2               -          754.2
Deferred tax liability               140.5              -          140.5               -          140.5
Employee benefits                     39.0              -           39.0               -           39.0
Finance lease obligation              16.8              -           16.8               -           16.8

Current liabilities                  257.0             3.2         260.2               -          260.2
Trade and other payables             251.8             3.2         255.0               -          255.0
Current tax liability                  5.2               -           5.2               -            5.2
 
TOTAL LIABILITIES                    985.0           225.7       1 210.7               -          1 210
TOTAL EQUITY AND
LIABILITIES                         2 287.4        2 467.3       4 754.7           587.1        5 341.8

Net asset value per share
(SA cents per share)                  308.6                        515.8                          483.3
Tangible net asset value per 
share (SA cents per share)            308.6                        515.8                          483.3

Number of shares in issue
(`000)                              431 430        265 000        696 430        167 734        864 163
Treasury shares held by
Ergo Mining Operations
(`000)                                9 361              -          9 361              -          9 361
Number of Shares in issue
less treasury shares (`000)         422 069        265 000        687 069        167 734        854 802
Notes:

1.   The 'Before' financial information has been extracted without adjustment and / or derived from the
     published, audited consolidated financial statements of DRDGOLD as at 30 June 2017.

2.   The 'After the Proposed Acquisition' column has been derived from the audited consolidated financial
     statements of DRDGOLD as at 30 June 2017 and adjusted for:
      a.   The unaudited historical financial information of WRTRP as at 30 June 2017, of which DRDGOLD is
           satisfied with the quality thereof.
      b.   The fair value of the WRTRP Assets, as extracted from the draft CPR, of which DRDGOLD is satisfied
           with the quality thereof.
      c.   The payment of transaction costs directly attributable to the Proposed Acquisition amounting to
           R7.4 million, of which R0.4 million is capitalised to share capital and R7.0 million is recognised as an
           expense.
      d.   The provision for the environmental rehabilitation was adjusted to allow for a market participant´s views
           in settling the liability. The pro forma includes adjustments to the estimated timing and manner of
           settling the expected environmental liability relating to the WRTRP Assets. The provision for
           environmental rehabilitation excludes the Excluded Dumps that will only be transferred after being
           decommissioned by Sibanye-Stillwater.
      e.   The deferred tax liability for the asset acquisition of the WRTRP Assets has been adjusted to Rnil in
           line with IAS 12 Income Tax initial recognition exemption.
      f.   The issue of 265 million Consideration Shares to Sibanye-Stillwater as consideration for the Proposed
           Acquisition.

3.   The 'After the Proposed Acquisition and the Specific Issue' column has been derived from the audited
     consolidated financial statements of DRDGOLD as at 30 June 2017 and adjusted for the adjustments
     included in note 2 above and for:
      a.   The issue of approximately 168 million Option Shares for cash to Sibanye-Stillwater, following the
           exercise of the Option, based on the 30-day volume weighted average price of a DRDGOLD Share as
           at 31 January 2018 of 389.16 cents less a 10% discount. Sibanye-Stillwater shall be entitled, subject to
           Sibanye-Stillwater not having disposed of all or any of the Consideration Shares, to exercise the Option
           during the Option Period, being any time during the period commencing on the date of implementation
           of the Proposed Acquisition and expiring 24 months thereafter ('Option Period'). The Option must be
           exercised in whole anytime within the Option Period.
      b.   The payment of transaction costs directly attributable to the Specific Issue amounting to R0.4 million, of
           which R0.2 million is capitalised to share capital and R0.2 million is recognised as an expense.

4.   There are no subsequent events that require adjustment to the Pro Forma Financial Information.

WITHDRAWAL OF CAUTIONARY

Shareholders are referred to the cautionary announcements published on SENS on
22 November 2017 and 8 January 2018 and are advised that, following the publication of the Forecast
Financial Information and the Pro Forma Financial Information, caution is no longer required to be
exercised by Shareholders when dealing in the Company´s securities.

Johannesburg
6 February 2018

Sponsor
One Capital

Auditors and reporting accountant to DRDGOLD
KPMG Incorporated

Competent Person
Sound Mining Solutions (Proprietary) Limited

Forward Looking Statements

This announcement contains statements relating to certain projections and business trends that are
forward-looking, including statements with respect to the Proposed Transaction, expected financial
results of WRTRP for the calendar year 2019, forecasted and pro forma financial information
contained herein, expected tax expenses, expected production, average gold price and working cost
per ton and the other assumptions upon which the pro forma financial information was prepared.
These statements are not historical facts, but rather are based on current expectations, estimates,
assumptions and projections about the business and our future financial results and readers should
not place undue reliance on them. Forward-looking statements do not guarantee future performance
and involve risks and uncertainties. These risks and uncertainties include, without limitation, economic
conditions, the Proposed Transaction not being implemented, failing to receive expected benefits from
the Proposed Transaction, incorrect assumptions, adverse changes or uncertainties in general
economic conditions in the markets we serve, a drop in the gold price, a sustained strengthening of
the rand against the dollar, regulatory developments adverse to DRDGOLD or difficulties in
maintaining necessary licenses or other governmental approvals, changes in DRDGOLD´s competitive
position, changes in business strategy, any major disruption in production at key facilities or adverse
changes in foreign exchange rates and other risks indicated in the risk factors included in DRDGOLD´s
Annual Report on Form 20-F and other filings with the US Securities and Exchange Commission.
These forward-looking statements are made only as of the date of this announcement. We do not
undertake to update or revise the forward-looking statements, whether as a result of new information,
future events or otherwise.

Date: 06/02/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.
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DRDGOLD Limited published this content on 06 February 2018 and is solely responsible for the information contained herein.
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