REUTERS

Gold miner DRDGOLD (DRD) has entered into a sale of shares and claims agreement with Village Main Reef (VIL) in respect of DRDGOLD's 74% interest in Blyvooruitzicht Gold Mining Company (Blyvoor).

This follows an announcement in November 2011, advising that DRDGOLD had received and accepted a non-binding expression of interest from Village in terms of which Village had expressed an interest in acquiring DRDGOLD's entire interest in Blyvoor, it said on Monday.

In terms of the agreement, DRDGOLD has sold to Village its entire shareholding in Blyvoor and its working capital and shareholder loan claims against Blyvoor.

The purchase consideration payable in respect of the sale claims and the sale shares will be settled by Village through the issue of 85.714 million new ordinary shares in Village at an issue price of R1.75 per share and an amount of R1 payable in cash by Village, respectively.

The current value of the consideration shares, calculated with reference to the 30-day volume weighted average price per Village share until and including Friday, 10 February 2012, is approximately R192 million.

The sale is conditional on the conclusion of the sale to Blyvoor by AngloGold Ashanti of the mining right in respect the portion of the West Wits Mining Right that relates to its Savuka Mine, to the satisfaction of Village, by end May and the conclusion and unconditionality of an escrow agreement between DRDGOLD and an escrow agent in respect of a portion of the consideration shares.

It is also subject to the approval the SA competition authorities and conversion by the Department of Mineral Resources (DMR) of Blyvoor's old order mining right to a new order mining right.

A further condition is the approval by the DMR of the transfer of DRDGOLD's interest in Blyvoor to Village. - I-Net Bridge