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Drdgold Ltd – ‘20-F’ for 12/12/08

On: Friday, 12/12/08, at 7:54am ET · For: 12/12/08 · Accession #: 1205613-8-191 · File #: 0-28800

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/12/08  Drdgold Ltd                       20-F       12/12/08   22:9.0M                                   Ince Pty Ltd/FA

Annual Report of a Foreign Private Issuer — Form 20-F
Filing Table of Contents

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20-F — Annual Report of a Foreign Private Issuer

This is an HTML Document rendered as filed. [ Alternative Formats ]

Page 1

As filed with the Securities and Exchange Commission on December 12, 2008

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE

ACT OF 1934

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

1934

For the fiscal year ended June 30, 2008

Commission file number 0-28800

DRDGOLD LIMITED

(Exact name of Registrant as specified in its charter and translation of Registrant's name into English)

REPUBLIC OF SOUTH AFRICA

(Jurisdiction of incorporation or organization)

299 PENDORING AVENUE, BLACKHEATH, RANDBURG, 2195, SOUTH AFRICA

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act

None

Securities registered or to be registered pursuant to Section 12(g) of the Act

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

None

IIndicated the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the

period covered by the annual report.

As of June 30, 2008 the Registrant had outstanding 376,571,588 ordinary shares, of no par value.

Indicated by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

Indicated by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act

of 1934. Yes

Indicated by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days. Yes

Indicated by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Indicated by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

U.S. GAAP

International Financial Reporting Standards as issued by the IASB

Other

Indicated by check mark which financial statement item the registrant has elected to follow. Item 17

Item 18

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

Contact details:

Mr. T.J. Gwebu – Group Legal Counsel, Company Secretary and Compliance Officer

DRDGOLD Limited, 299 Pendoring Avenue, Randburg, 2195, South Africa

Telephone: +2711 219 8700

TABLE OF CONTENTS

Page

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS .................................................

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE ....................................................................................

ITEM 3.

KEY INFORMATION..........................................................................................................................................

3A.

Selected Financial Data ...........................................................................................................................................

3B.

Capitalization And Indebtedness............................................................................................................................

3C.

Reasons For The Offer And Use Of Proceeds .......................................................................................................

3D.

Risk Factors.............................................................................................................................................................

ITEM 4.

INFORMATION ON THE COMPANY..............................................................................................................

4A.

History And Development Of The Company .......................................................................................................

4B.

Business Overview .................................................................................................................................................

4C.

Organizational Structure..........................................................................................................................................

4D.

Property, Plants And Equipment ...........................................................................................................................

ITEM 4A.

UNRESOLVED STAFF COMMENTS.................................................................................................................

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS .......................................................................

5A.

Operating Results ...................................................................................................................................................

5B.

Liquidity And Capital Resources ...........................................................................................................................

5C.

Research And Development, Patents And Licenses Etc.........................................................................................

5D.

Trend Information....................................................................................................................................................

5E.

Off-Balance Sheet Arrangements..............................................................................................................................

5F.

Tabular Disclosure Of Contractual Obligations.......................................................................................................

5G.

Safe Harbor ..............................................................................................................................................................

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES..........................................................................

6A.

Directors And Senior Management...........................................................................................................................

6B.

Compensation ..........................................................................................................................................................

6C.

Board Practices ........................................................................................................................................................

6D.

Employees................................................................................................................................................................

6E.

Share Ownership......................................................................................................................................................

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS .......................................................

7A.

Major Shareholders...................................................................................................................................................

7B.

Related Party Transactions ......................................................................................................................................

7C.

Interests Of Experts And Counsel ...........................................................................................................................

101

ITEM 8.

FINANCIAL INFORMATION .............................................................................................................................

102

8A.

Consolidated Statements And Other Financial Information.....................................................................................

102

8B.

Significant Changes ..................................................................................................................................................

102

ITEM 9.

THE OFFER AND LISTING .................................................................................................................................

103

9A.

Offer And Listing Details ........................................................................................................................................

103

9B.

Plan Of Distribution.................................................................................................................................................

103

9C.

Markets.....................................................................................................................................................................

104

9D.

Selling Shareholders ..................................................................................................................................................

104

9E.

Dilution ....................................................................................................................................................................

104

9F.

Expenses Of The Issue.............................................................................................................................................

104

ITEM 10.

ADDITIONAL INFORMATION..........................................................................................................................

105

10A.

Share Capital.............................................................................................................................................................

105

10B.

Memorandum And Articles Of Association ............................................................................................................

105

10C.

Material Contracts....................................................................................................................................................

107

10D.

Exchange Controls.....................................................................................................................................................

109

10E.

Taxation ....................................................................................................................................................................

111

10F.

Dividends And Paying Agents .................................................................................................................................

116

10G.

Statement By Experts ..............................................................................................................................................

116

10H.

Documents On Display............................................................................................................................................

116

10I.

Subsidiary Information ............................................................................................................................................

116

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................

117

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES ......................................................

118

TABLE OF CONTENTS

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES ..............................................................

118

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS ..

118

ITEM 15.

CONTROLS AND PROCEDURES.................................................................................................................

118

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT ............................................................................................

120

ITEM 16B.

CODE OF ETHICS .......................................................................................................................................

120

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES...................................................................................

120

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES ...................................

120

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS..................

120

PART III

ITEM 17.

FINANCIAL STATEMENTS .......................................................................................................................

121

ITEM 18.

FINANCIAL STATEMENTS .......................................................................................................................

F-pages

ITEM 19.

EXHIBITS ...................................................................................................................................................

122

Preparation of Financial Information

We are a South African company and currently all of our operations, as measured in production ounces, are located there.

Accordingly, our books of account are maintained in South African Rand. Our financial statements included in our corporate filings

in South Africa were prepared in accordance with International Financial Reporting Standards (IFRS), as approved by the

International Accounting Standards Board (IASB) for the financial years ended 30 June 2006, 2007 and 2008. All references to

“Dollars” or “$” herein are to United States Dollars, references to “Rand” or “R” are to South African Rands, references to “A$” are

to Australian Dollars, references to ”F$” are to Fiji Dollars, and references to “Kina” or “K” are to Papua New Guinean Kinas.

Prior to fiscal year ended June 30, 2008, our annual financial statements (translated into Dollars) were prepared and filed
with the U.S. Securities and Exchange Commission (“SEC”) in accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”). On December 21, 2007, the SEC adopted rules allowing foreign private issuers that file Annual
Reports on Form 20-F to file financial statements with the SEC in accordance with IFRS as issued by the IASB without
reconciliation to U.S. GAAP. As per these new rules, we changed our basis of presentation and included in this Annual Report our
consolidated financial statements prepared in accordance with IFRS as issued by the IASB. All financial information, except
asotherwise noted, are stated in accordance with IFRS as issued by the IASB

We present our financial information in Rand, which is our reporting currency. Solely for your convenience, this
Form 20-F contains translations of certain Rand amounts into Dollars at specified rates. These Rand amounts do not represent
actual Dollar amounts, nor could they necessarily have been converted into Dollars at the rates indicated. Unless otherwise
indicated, Rand amounts have been translated into Dollars at the rate of R9.84 per $1.00, which was the noon buying rate in New
York City on October 31, 2008.

In this Annual Report on Form 20-F, we present the financial items “cash costs per kilogram” and “total costs per

kilogram” which have been determined using industry guidelines promulgated by the Gold Institute and are not IFRS financial

measures. An investor should not consider these items in isolation or as alternatives to cash and cash equivalents, operating costs,

net profit/(loss) applicable to ordinary shareholders, profit/(loss) before tax and other items or any other measure of financial

performance presented in accordance with IFRS or as an indicator of our performance. While the Gold Institute has provided

definitions for the calculation of cash costs, the calculation of cash costs per kilogram, total costs and total costs per kilogram may

vary significantly among gold mining companies, and these definitions by themselves do not necessarily provide a basis for

comparison with other gold mining companies. See “Glossary of Terms and Explanations” and Item 5A.: “Operating and

Financial Review and Prospects – Cash costs and total costs per kilogram- Reconciliation of cash costs per kilogram, total costs

and total costs per kilogram.”

DRDGOLD Limited

When used in this Annual Report, the term the “Company” refers to DRDGOLD Limited and the terms “we,” “our,” “us” or

“the Group” refer to the Company and its subsidiaries, associates and joint venture, as appropriate in the context.

Special Note Regarding Forward-Looking Statements

This Annual Report contains certain “forward-looking” statements within the meaning of Section 21E of the Exchange Act,

regarding future events or other future financial performance and information relating to us that are based on the beliefs of our

management, as well as assumptions made by and information currently available to our management. Some of these forward-

looking statements include phrases such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “should,” or

“will continue,” or similar expressions or the negatives thereof or other variations on these expressions, or similar terminology, or

discussions of strategy, plans or intentions. These statements also include descriptions in connection with, among other things:

• estimates regarding future production and throughput capacity;

• our anticipated commitments;

• our ability to fund our operations in the next 12 months; and

• estimated production costs, cash costs per ounce and total costs per ounce.

Such statements reflect our current views with respect to future events and are subject to risks, uncertainties and

assumptions. Many factors could cause our 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;

• regulatory developments adverse to us or difficulties in maintaining necessary licenses or other governmental approvals;

• changes in our 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.

For a discussion of such risks, see Item 3D.: “Risk Factors.” The risk factors described in Item 3D. could affect our future

results, causing these results to differ materially from these expressed in any forward-looking statements. These factors are not

necessarily all of the important factors that could cause our results to differ materially from those expressed in any forward-looking

statements. Other unknown or unpredictable factors could also have material adverse effects on future results.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date
hereof. We do not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events.

Imperial units of measure and metric equivalents

Units stated in this Annual Report are measured in Imperial and Metric.

Metric

Imperial

Metric

1 metric tonne

1.10229 short tons

1 short ton

0.9072 metric tonnes

1 kilogram

2.20458 pounds

1 pound

0.4536 kilograms

1 gram

0.03215 troy ounces

1 troy ounce

31.10353 grams

1 kilometer

0.62150 miles

1 mile

1.609 kilometres

1 meter

3.28084 feet

1 foot

0.3048 metres

1 liter

0.26420 gallons

1 gallon

3.785 liters

1 hectare

2.47097 acres

1 acre

0.4047 hectares

1 centimeter

0.39370 inches

1 inch

2.54 centimetres

1 gram/tonne

0.0292 ounces/ton

1 ounce/ton

34.28 grams/tonnes

0 degree Celsius

32 degrees Fahrenheit

0 degrees Fahrenheit

- 18 degrees Celsius

Glossary of Terms and Explanations

Adularia ............................................ A transparent or translucent variety of common feldspar.

Archaean........................................... A period of the geological time scale between 2.5 and 4.6 billion years ago, the earliest part of the

Precambrian.

Assaying ........................................... The chemical testing process of rock samples to determine mineral content.

Auriferous......................................... Containing gold.

Bonanza ........................................... Unexpected high-grade occurrences.

Care and maintenance ...................... Cease active mining activity at a shaft, but continue to incur costs to ensure that the Ore Reserves

are open, serviceable and legally compliant.

Cash costs per kilogram................... Cash costs are operating costs incurred directly in the production of gold and include labor costs,

contractor and other related costs, inventory costs and electricity costs. Cash costs per kilogram

are calculated by dividing cash costs by kilograms of gold produced. Cash costs per kilogram

have been calculated on a consistent basis for all periods presented. This is a non-IFRS financial

measure and should not be considered a substitute measure of costs and expenses reported by us

in accordance with IFRS.

Caving............................................... A type of mining in which the ore is blasted and drawn in a manner causing the overhead rock to

cave in.

Conglomerate ................................... A coarse-grained sedimentary rock consisting of rounded or sub-rounded pebbles.

Cut-and-fill ....................................... A mining method in which a slice of rock is removed after blasting and replaced with a slice of

fill material to provide workers with a platform to mine the next slice of rock.

Cut-off grade .................................... The minimum in-situ grade of ore blocks for which the cash costs per ounce, excluding overhead

costs, are equal to a projected gold price per ounce.

Depletion .......................................... The decrease in the quantity of ore in a deposit or property resulting from extraction or

production.

Dilution............................................. Broken rock entering the ore flow at zero or minimal grade and therefore diluting the gold

content per ton.

Diorite............................................... An igneous rock formed by the solidification of molten material.

Doré .................................................. Unrefined gold and silver bullion bars consisting of approximately 90% precious metals which

will be further refined to almost pure metal.

Electrowinning ................................. The process of recovering metal from an ore by means of electro-chemical processes.

Grade................................................. The amount of gold contained within auriferous material generally expressed in ounces per ton or

grams per ton of ore.

g/t ...................................................... Grams per ton.

Horizon ............................................. A plane indicating a particular position in a stratigraphic sequence. This may be a theoretical

surface with no thickness or a distinctive bed.

Igneous rock ..................................... Rock which is magmatic in origin.

Intrusive ............................................ Rock which while molten, penetrated into or between other rocks, but solidified before reaching

the surface.

Life of mine ...................................... Projected life of a mining operation based on the Proven and Probable Ore Reserves.

Metallurgical plant ........................... A processing plant (mill) erected to treat ore and extract the contained gold.

Mine call factor................................. This is the gold content recovered expressed as a percentage of the gold content called.

Mill ................................................... Material passed through the metallurgical plant for processing.

Mt...................................................... Million tons.

Opening up ....................................... The potential that previously abandoned shafts have to be reopened and mined.

Ore .................................................... A mixture of valuable and worthless minerals from which the extraction of at least one mineral is

technically and economically viable.

Ore Reserves..................................... Attributable total Ore Reserves of subsidiaries.

Pay-limit ........................................... The minimum in-situ grade of ore blocks for which cash costs, including all overhead costs, are

equal to a projected gold price per ounce.

Proven Ore Reserves ........................

Reserves for which (a) the quantity is computed from dimensions revealed in outcrops, trenches,

workings or drill holes; grade and/or quality are computed from the results of detailed sampling

and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic

character is so well defined that size, shape, depth, and mineral content of Ore Reserves are

well-established.

Probable Ore Reserves ..................... Reserves for which quantity and grade and/or quality are computed from information similar to

that used for Proven Ore Reserves, but the sites for inspection, sampling, and measurement are

farther apart or are otherwise less adequately spaced. The degree of assurance, although lower

than that for Proven Ore Reserves, is high enough to assume continuity between points of

observation.

oz/t .................................................... Ounces per ton.

Reef................................................... A gold-bearing sedimentary horizon, normally a conglomerate band that may contain economic

levels of gold.

Refining ............................................ The final purification process of a metal or mineral.

Rehabilitation ................................... The process of restoring mined land to a condition approximating its original state.

Reserves............................................ That part of a mineral deposit which could be economically and legally extracted or produced at

the time of the reserve determination.

Sedimentary...................................... Formed by the deposition of solid fragmental material that originated from weathering of rocks

and was transported from a source to a site of deposition.

Shaft.................................................. An opening cut downwards for transporting personnel, equipment, supplies, ore and waste. A

shaft is also used for ventilation and as an auxiliary exit. It is equipped with a hoist system that

lowers and raises a cage in the shaft, transporting equipment, personnel, materials, ore and waste.

A shaft generally has more than one compartment.

Shrinkage stoping............................. A mining method in which a small percentage of the broken ore is drawn as mining progresses to

make room for subsequent mining activities. Most of the blasted ore is left to accumulate in the

stope and is drawn after the stope is completely mined.

Slimes ............................................... The fraction of tailings discharged from a processing plant after the valuable minerals have been

recovered.

Sloughing.......................................... The localized failure of part of the slimes dam wall caused by a build up of water within the dam.

Stope ................................................. Underground production working area on the Ore Horizon.

Sub-level stoping.............................. A method of mining in which the ore is blasted, on multiple levels in one stope, and drawn off as

it is blasted, leaving an open stope.

Tailings ............................................. Finely ground rock from which valuable minerals have been extracted by milling, or any waste

rock, slimes or residue derived from any mining operation or processing of any minerals.

Tailings dam ..................................... A dam created from waste material of processed ore after the economically recoverable gold has

been extracted.

Tonnage/Tons................................... Quantities where the metric ton is an appropriate unit of measure. Typically used to measure

reserves of gold-bearing material in-situ or quantities of ore and waste material mined,

transported or milled.

Total costs per kilogram................... Total costs per kilogram represent the full amount of costs incurred and represents the difference

between revenues from gold bullion and profits or losses before taxation. Total costs per

kilogram are calculated by dividing total costs by kilograms of gold produced. Total costs per

kilogram have been calculated on a consistent basis for all periods presented. This is a non-IFRS

financial measure and should not be considered a substitute measure of costs and expenses

reported by us in accordance with IFRS.

Tpm................................................... Tons per month.

Up-dip mining .................................. A mining method in which the drilled and blasted ore gravitates into slushers or gullies leaving

an open space. This is normally used in narrow stopes.

Waste rock........................................ Non-auriferous rock.

Yield ................................................. The amount of recovered gold from production generally expressed in ounces or grams per ton of

ore.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3A. SELECTED FINANCIAL DATA

The following selected consolidated financial data as at June 30, 2008, 2007 and 2006 and for the years ended June 30,

2008, 2007 and 2006 are derived from our consolidated financial statements set forth elsewhere in this Annual Report, which have

been prepared in accordance with IFRS, as issued by the IASB. These consolidated financial statements have been audited by

KPMG Inc. as at June 30, 2008, 2007 and 2006 and for the years ended June 30, 2008, 2007 and 2006. Prior to fiscal year ended June

30, 2008, our annual financial statements (translated into Dollars) were prepared and filed with the SEC in accordance with U.S.

GAAP. On December 21, 2007, the SEC, adopted rules allowing foreign private issuers that file Annual Reports on Form 20-F to file

with the SEC financial statements in accordance with IFRS as issued by the IASB without reconciliation to U.S. GAAP. As per these

new rules, we changed our basis of presentation and have included in this Annual Report our consolidated financial statements

prepared in accordance with IFRS as issued by the IASB. The selected consolidated financial data as at June 30, 2005 and 2004 and

for the years ended June 30, 2005 and 2004 are derived from audited consolidated financial statements not appearing in this Annual

Report which have been prepared in accordance with IFRS as issued by the IASB. The selected consolidated financial data set forth

below should be read in conjunction with Item 5.: “Operating and Financial Review and Prospects” and with the consolidated

financial statements and the notes thereto and the other financial information appearing elsewhere in this Annual Report.

Selected Consolidated Financial Data

(in thousands, except share, per share and ounce data)

Year ended June 30,

2008

2007

2006

2005

2004

$’000

R’000

Income Statement Data

Revenue ........................................................................ 196,458

1,933,147

2,209,705

1,599,994

1,668,562

2,192,142

Operating loss before finance income and finance

expenses......................................................................

(1,542)

(15,175) (1,173,375)

(105,110)

(528,043)

(330,986)

Operating profit/(loss) before finance income and

finance expenses from continuing operations............

10,386

102,194

22,541

7,641

(129,585)

(146,262)

Net profit/(loss) applicable to ordinary

shareholders................................................................ 101,224

996,041

(924,466)

(110,089)

(544,792)

(716,430)

Net profit/(loss) from continuing operations

applicable to ordinary shareholders ...........................

13,065

128,558

(2,674)

(71,478)

(180,666)

(170,970)

Per Share Data

Basic profit/(loss) per share (cents)...............................

265

(271)

(35)

(211)

(331)

Basic profit/(loss) per share - continuing

operations (cents)........................................................

(1)

(23)

(61)

(73)

Diluted profit/(loss) per share (cents) ...........................

265

(271)

(35)

(211)

(331)

Diluted profit/(loss) per share - continuing

operations (cents)........................................................

(1)

(23)

(61)

(73)

Dividends per share (cents)...........................................

Number of shares issued as at June 30..........................

376,571,588 376,571,588 370,341,981 320,035,078 296,206,048 233,307,667

Balance Sheet Data

Total assets ................................................................

229,928

2,262,495

1,947,163

3,010,074

1,499,432

1,803,178

Equity (Net assets)......................................................... 132,669

1,305,461

143,456

1,015,272

483,094

569,890

Ordinary share capital ................................................... 416,484

4,098,206

4,069,096

3,761,368

3,564,974

3,069,055

3B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3C. REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

Translations into Dollars in this table are for convenience only and are computed at the noon buying rate in New York City at October 31,
2008 of R9.84 per $1.00. You should not view such translations as a representation that such amounts represent actual Dollar amounts.

Comparatives have been restated for the reclassification of the Australasian operations as discontinued operations. The discontinued operations
relate to the Porgera Joint Venture (disposed on August 17, 2007), Emperor (disposed on October 22, 2007), Netgold (disposed on March 13,
2008) and Buffelsfontein Gold Mines Limited (liquidated on 22 March 2005).

3D. RISK FACTORS

In conducting our business, we face many risks that may interfere with our business objectives. Some of these risks relate to

our operational processes, while others relate to our business environment. It is important to understand the nature of these risks and

the impact they may have on our business, financial condition and operating results.

Some of the most relevant risks are summarized below and have been organized into the following categories:

• Risks related to our business and operations;

• Risks related to the gold mining industry;

• Risks related to doing business in South Africa; and

• Risks related to ownership in our ordinary shares or American Depositary Shares, or ADSs.

Risks related to our business and operations

Changes in the market price for gold, which in the past has fluctuated widely, and exchange rate fluctuations affect the

profitability of our operations and the cash flows generated by those operations

As the majority of our production costs are in Rands, while gold is generally sold in Dollars, our financial condition has

been and could be materially harmed in the future by an appreciation in the value of the Rand. Due to the marginal nature of our

underground mines, any sustained decline in the market price of gold below the cost of production could result in the closure of

our mines which would result in significant costs and expenditure, for example, incurring retrenchment costs earlier than

expected, that would negatively and adversely affect our business, operating results and financial condition.

We do not enter into forward contracts to reduce our exposure to market fluctuations in the Dollar gold price or the
exchange rate movements of the Rand. We sell our gold and trade our foreign currency at the spot price in the market on the date of
trade. If the Dollar gold price should fall and the regional functional currencies should strengthen against the Dollar, resulting in
revenue below our cost of production and remain at such levels for any sustained period, we may experience losses and may be
forced to curtail or suspend some or all of our operations. In addition, we might not be able to recover any losses we may incur during
that period or maintain adequate gold reserves for future exploitation.

Exchange rates are influenced by global economic trends which are beyond our control. In fiscal 2008 and fiscal 2007 the

Rand depreciated against the Dollar by 1.3% and 12.3% respectively (based on average exchange rates at June 30 of each year). As at

June 30, 2008, even though the Rand depreciated against the Dollar during the fiscal year, it has appreciated by 40.7% since

December 2001 when it reached R13.44 = $1.00 (based on closing rates). At October 31, 2008 the Rand traded at R9.84 = $1, a 24%

weakening against the Dollar from June 30, 2008.

A decrease in the Dollar gold price and a strengthening of the foreign exchange rate of the Rand could result in a decrease in
our profitability. In fiscal 2008 and 2007, 96% and 70% of production respectively, was from our South African mines providing
significant exposure to the strengthening of the Rand and a decrease in profitability. As a result of disposing of our Australasian
operations, we are more exposed to the Rand/Dollar exchange rate as all our operations are now located in South Africa. If the Rand
had to again appreciate in such a manner, our operations could once again experience a reduction in cash flow and profitability and
this would negatively and adversely affect our business, operating results and financial condition.

Inflation may have a material adverse effect on our results of operations

South Africa has experienced high rates of inflation recently. Because we are unable to control the market price at which

we sell the gold we produce, it is possible that significantly higher future inflation in South Africa may result in an increase in our

future operational costs in Rand, without a concurrent devaluation of the operational costs in Rand against the Dollar or an

increase in the Dollar price of gold. This could have a material adverse effect upon our results of operations and our financial

condition. Significantly higher and sustained inflation in the future, with a consequent increase in operational costs, could result in

operations being discontinued or reduced or rationalized at higher cost mines

We have a history of losses and may incur losses in the future.

We achieved net profits of R1.2 billion for fiscal 2008, however, in fiscal 2007 and 2006, we incurred losses of R1.2 billion

and R114.5 million respectively. Since fiscal 2007 we have disposed of our loss making Australasian Operations and refocused on

our profitable South African Operations: however we may incur losses in the future again. Our profits and cash flows of our

operations are directly exposed to the strength of the Rand and higher input costs as we generally do not hedge. Our underground

mines are also regarded as older, higher cost and lower-grade gold producers. In addition our ability to identify Ore Reserves that

have reasonable prospects for economic extraction and to maintain sufficient controls on production and other costs will have a

material influence on the future viability of our mines.

We may not be able to meet our cash requirements because of a number of factors, many of which are beyond our

control.

Management’s estimates on future cash flows are subject to risks and uncertainties, such as the gold price, production

volumes, costs and seismicity. If we are unable to meet our cash requirements out of cash flows generated from our operations, we

would need to fund our cash requirements from alternative financing and we cannot guarantee that any such financing would be on

acceptable terms, or would be permitted under the terms of our existing financing arrangements, or would be available at any terms.

In the absence of sufficient cash flows or adequate financing, our ability to respond to changing business and economic conditions,

make future acquisitions, react to adverse operating results, meet our debt service obligations and fund required capital expenditures

or increased working capital requirements may be adversely affected.

The failure to discover or acquire new Ore Reserves could negatively affect our cash flow, results of operations and

financial condition.

Our future cash flow, results of operations and financial condition are directly related to the success of our exploration

and acquisition efforts in the regions in which we operate and any new regions that we identify for future growth opportunities.

Our Ore Reserves for fiscal 2008 decreased by 7%, primarily due to the disposal of our interest in Emperor Mines Limited, or

Emperor. In fiscal 2007, our Ore Reserves decreased by 35% primarily as a consequence of the closure and subsequent disposal of

the Vatukoula mine and our interest in the Porgera Joint Venture. In fiscal 2006, our ore reserves increased with the acquisition of

Crown Gold Recoveries (Pty) Limited, or Crown, ERPM and Emperor. Mining higher grade reserves in our underground mines is

likely to be more difficult in the future, due to the age of these mines and safety concerns and could result in increased production

costs and reduced profitability. We can make no assurances that any new or ongoing exploration programs will result in new

mineral producing operations that will sustain or increase our Ore Reserves. A failure to discover or acquire new Ore Reserves in

sufficient quantities to maintain or grow the current level of our reserves will negatively affect our future cash flow, results of

operations and financial condition.

To the extent that we seek to expand and grow through acquisitions we may experience difficulty in managing these

acquisitions and integrating them with our existing operations.

Our objective is to grow our business by improving efficiency at our existing operations as well as through acquisitions.

From time to time we consider the acquisition of mining assets including ore reserves, development properties, operating mines or

mining companies. Our expansion through acquisitions of new gold mining operations involves a number of risks including:

• maintaining our financial and strategic focus while integrating the acquired business;

• implementing uniform standards, controls, procedures and policies at the acquired business;

• assimilating the operations of an acquired business in a timely and efficient manner;

• unifying our periodic and year-end financial audit processes

• increasing pressures on existing management to oversee an expanding company;

• to the extent that we make an acquisition outside of markets in which we have previously operated, conducting and

managing operations in a new operating environment;

• the market for acquisitions is competitive and we may not always be successful in identifying and purchasing assets that

fit our strategy;

• the ability to conduct a comprehensive due diligence analysis could be restricted due to unavailable information;

• we may need to use a combination of historical and projected data in order to evaluate the financial and operational

feasibility of the target assets. These analyses are based on a variety of factors including historical operating results,

estimates of and assumptions about future reserves, cash and other operating costs, metal prices and projected economic

returns and evaluations of existing or potential liabilities associated with the property and its operations. Other than

historical operating results, all of these parameters could differ significantly from the estimates and assumptions used in

the evaluation process, which could result in an incorrect evaluation of the quality of the assets to be acquired;

• our inability to make suitable acquisitions at an appropriate price could adversely affect our ongoing business and

financial position, particularly if the Rand strengthens against the Dollar;

• we may experience difficulty in negotiating acceptable terms with the seller of the business to be acquired;

• we may not be able to obtain the financing necessary to complete future acquisitions;

• we may not be able to obtain necessary approvals from regulatory authorities;

• acquisitions financed through the issue of shares may result in a dilution in the value of our shares if the value of the

business acquired is not realized; and

• we could experience financial loss through costs incurred in evaluating and pursuing failed acquisitions or overpaying for

an acquisition.

Any problems experienced in achieving successful integration or in connection with an acquisition as a result of one or more

of these factors could have an adverse effect on our business, operating results and financial condition.

We may need to improve our internal controls over financial reporting and our independent auditors may not be able to

attest to their effectiveness.

We have evaluated our internal controls surrounding the financial reporting process for the current fiscal period so that

management can attest to the effectiveness of these controls, as required by Section 404 of the United States Sarbanes-Oxley Act of

2002. We identified two material weaknesses within our internal controls surrounding the financial reporting process and as a result,

have started implementing the appropriate remediation steps to address these deficiencies. We may also identify other conditions that

could result in significant deficiencies or material weaknesses in the future. As a result, we could experience a negative reaction in the

financial markets and incur additional costs in improving the condition of our internal controls for a detailed discussion of controls

and procedures see Item 15.: “Controls and Procedures.”

Increased production costs could have an adverse effect

on our results of operations.

Our historical production costs have varied significantly and we may not be able to accurately predict and adequately

provide for an increase in our production costs. Production costs are affected by, amongst other things:

• labor stability, lack of productivity and increases in labor costs;

• increases in crude oil, steel, electricity and water prices;

• unforeseen changes in ore grades and recoveries;

• unexpected changes in the quality or quantity of reserves;

• unstable or unexpected ground conditions and seismic activity;

• technical production issues;

• environmental and industrial accidents;

• gold theft;

• environmental factors; and

• pollution.

The majority of our production costs consist of labor, steel, electricity, water, fuels, lubricants and other oil and petroleum

based products. The production costs incurred at our operations have, and could in the future, increase at rates in excess of our annual

expected inflationary increase and result in the restructuring of these operations at substantial cost. The majority of our South African

labor force is unionized and their wage increase demands are usually above the then prevailing rates of inflation. In 2007, we entered

into two year wage agreements with the National Union of Mine Workers, or NUM for our mines at Blyvoor, Crown and ERPM. At

Blyvoor, a two-year agreement (effective from July 1, 2007) with NUM, United Association of South Africa or UASA and Solidarity

was signed on October 31, 2007. This agreement resulted in effective wage increases of 9.5% for fiscal 2008 and will include a 7.5%

increase for fiscal 2009. Similarly, two new wage agreements (effective from October 1, 2007) have been signed for Crown and

ERPM. These agreements provide for effective wage increases of 9.6% and 9.3% for Crown in fiscal 2008 and fiscal 2009,

respectively and in effective wage increases of 14.2% and 10.8% for ERPM in fiscal 2008 and fiscal 2009, respectively. In the past,

we have been impacted by price increases imposed by our South African steel suppliers and parastatal entities which supply us with

electricity and water. These, combined with the increases in labor costs, could result in our costs of production increasing above the

gold price received. Discussions with suppliers to moderate price increases have been unsuccessful in the past.

The costs of fuels, lubricants and other oil and petroleum based products have increased in fiscal 2008 as a result of the

general increase in the cost of crude oil in global markets. During fiscal 2007, the average brent crude oil price was approximately

$55 per barrel and in fiscal 2008, the average brent crude oil price was approximately $96 per barrel. In the event that the increase in

crude oil prices continues, this could have a significant impact on our production costs.

Our initiatives to reduce costs may not be sufficient to offset the increases imposed on our operations and could negatively

affect our business, operating results and financial condition.

Our operations are subject to extensive environmental regulations which could impose significant costs and liabilities.

Our operations are subject to increasingly extensive laws and regulations governing the protection of the environment, under

various state, provincial and local laws, which regulate air and water quality, hazardous waste management and environmental

rehabilitation and reclamation. Our mining and related activities impact the environment, including land, habitat, streams and

environment near the mining sites. Delays in obtaining, or failures to obtain government permits and approvals may adversely

impact our operations. In addition, the regulatory environment in which we operate could change in ways that could substantially

increase costs to achieve compliance, therefore having a material adverse effect on our profitability.

We have made, and expect to make in the future, expenditures to comply with these environmental laws and regulations. We

have estimated our aggregate Group Rehabilitation, Reclamation and Closure cost provision at R381.3 million included on our

balance sheet as at June 30, 2008. However, the ultimate amount of rehabilitation costs may in the future exceed the current estimates

due to influences beyond our control, such as changing legislation or unidentified rehabilitation costs. The closure of mining

operations, without sufficient financial provision for the funding of rehabilitation liabilities, or unacceptable damage to the

environment, including pollution or environmental degradation, may expose us and our directors to litigation and potentially

significant liabilities.

Seismicity and other natural disasters could impact the going concern of our operations.

We run the inherent risk that seismic activity and/or other natural disasters could cripple our operations and affect their
ability to continue production. Seismic activity has had, and may continue to have, a harmful effect on our business, operating results
and financial condition. For example, on March 9, 2005, the North West Operations suffered the effects of an earthquake of 5.3 on
the Richter scale. As a consequence of the extensive damage caused by the earthquake, the No. 5 Shaft of the North West Operations
was closed. In addition there was continuing seismic activity in the area and on March 16, 2005, we closed the No. 2 Shaft because of
concerns for the safety of employees.

Flooding at our operations may cause us to incur liabilities for environmental damage.

Flooding of underground mining areas is an inherent risk at our underground operations. If the rate of rise of water is not

controlled, water from underground mining areas could potentially rise to the surface or decant into surrounding underground mining

areas or natural underground water sources. Due to the withdrawal of government pumping subsidies at Durban Deep and West Wits,

we have ceased active pumping of underground water at these mines. Progressive flooding where these operations are located could

eventually cause the discharge of polluted water to the surface and to local water sources.

Estimates of the probable rate of rise of water in those mines are contradictory and lack scientific support, however, should
underground water levels not reach a natural subterranean equilibrium, and in the event that underground water rises to the surface,
we may face claims relating to environmental damage as a result of pollution of ground water, streams and wetlands. These claims
may have a material adverse effect on our business, operating results and financial condition.

We have ageing assets, which exposes us to greater risk of our infrastructure failing, higher maintenance costs and
potentially greater health, safety and environmental liabilities.

Our assets are made up predominantly of mature assets, which we acquired after they had reached the end of the planned
production cycle under their previous owners, and our strategy has been to revive these assets through specialist planning and mining
techniques. The ageing infrastructure and installations typical of these operations require constant maintenance and continuing capital
expenditure. This materially increases our operational costs. In addition, the technology applied in many of our installations was not
regularly updated and accordingly has become obsolete compared to the technology used in more modern mines. As a result the risk
of technology failure is high, and the maintenance of these installations, costly.

Due to the nature of the business and because our marginal mines predominantly are comprised of aged infrastructures, we
inherently run the risk of exposure to greater health, safety and environmental liabilities which we closely monitor but are unable to
fully mitigate.

Limited tailings dam capacity at Crown exposes us to greater risk of financial loss due to lower production and health,
safety and environmental liabilities.

Our ageing tailings facilities at Crown are exposed to numerous risks and events, the occurrence of which may result in the
failure or breach of such a facility. These may include sabotage, failure to adhere to the codes of practice and natural disasters such as
excessive rainfall and seismicity. In the event that we are limited on how much treated ore, sand or slime we can deposit at Crown’s
deposition sites, we could be forced to stop or limit operations, the dams could overflow and the health and safety of our employees
and communities living around these dams could be jeopardized. In the event that this occurs, our Crown operations will be adversely
affected and this in turn could have a material adverse effect on our business, operating result and financial condition.

Due to the nature of our business, our Company faces extensive health and safety risks.

Regrettably four people died in work-related incidents during fiscal 2008, compared to eight fatalities in fiscal 2007. Two of
these fatalities were largely attributable to seismicity-related rockfalls, one was the result of a truck and tramming incident and the
fourth occurred when a concrete silo collapsed in the wrong direction as it was being demolished. Subsequent to June 30, 2008 and
up to October 31, 2008 five people died in work related incidents. Two of these fatalities were attributable to seismicity-related
rockfalls, two fatalities were as a result of asphyxiation in a shaft conveyance and one employee was found dead underground after
having been reported missing. According to section 54 of the Mine, Health and Safety Act of 1996, if an inspector believes that any
occurrence, practice or condition at a mine endangers or may endanger the health or safety of any person at the mine, the inspector
may give any instruction necessary to protect the health or safety of persons at the mine. These instructions could include the
suspension of operations at the whole or part of the mine. While seismic monitoring continues to be an invaluable tool in the
management of seismicity, there is still risk of seismic induced fatalities occurring which we may not be able to prevent. These
incidents could lead to mine operations being halted and that will increase our unit costs due to loss of production. This could have
amaterial adverse effect on our business, operating results and financial condition.

Events may occur for which we are not insured which could affect our cash flows and profitability.

Because of the nature of our business, we may become subject to liability for pollution or other hazards against which we
are unable to insure, including those in respect of past mining activities. Our existing property, business interruption and other
insurance contains certain exclusions and limitations on coverage. We have insured property, including loss of profits due to business
interruption in the amount of R9.0 billion. Claims for each and every event are limited by the insurers to R1.0 billion. Business
interruption is only covered from the time the loss actually occurs and is subject to time and amount deductibles that vary between
categories. General liability, fidelity, directors and officers, and other insurance cover is also in place.

Future insurance coverage may not cover the extent of claims brought against us, including claims for environmental,
industrial or pollution related accidents, for which coverage is not available. If we are required to meet the costs of claims which
exceed our insurance coverage, our costs may increase which could have a material adverse effect on our business, operating results
and financial condition.

If we are unable to attract and retain key personnel our business may be harmed.

The success of our business will depend, in large part, upon the skills and efforts of a small group of management and
technical personnel including our Chief Executive Officer and our Chief Financial Officer. In addition, we compete with mining and
other companies on a global basis to attract and retain key human resources at all levels with appropriate technical skills and
operating and managerial experience necessary to operate the business. The current environment of increased mining activity
worldwide combined with the global shortage of key mining industry human resource skills exacerbates this challenge. Furthermore,
attacks on foreign Africans by South Africans make it more difficult to attract and retain skilled employees. Factors critical to
retaining our present staff and attracting additional highly qualified personnel include our ability to provide these individuals with
competitive compensation arrangements, equity participation and other benefits. If we are not successful in retaining or attracting
highly qualified individuals in key management positions, our business may be harmed. We do not maintain “key man” life insurance
policies on any members of our executive team. The loss of any of our key personnel could prevent us from executing our business
plans, which may result in decreased production, increased costs and decreased profitability.

Risks related to the gold mining industry

A change in the price of gold, which in the past has fluctuated widely, is beyond our control.

Historically, the gold price has fluctuated widely and is affected by numerous industry factors, over which we have no

control, including:

• the physical supply of gold from world-wide production and scrap sales, and the purchase, sale or divestment by central

banks of their gold holdings;

• the demand for gold for investment purposes, industrial and commercial use, and in the manufacturing of jewellery;

• speculative trading activities in gold;

• the overall level of forward sales by other gold producers;

• the overall level and cost of production of other gold producers;

• international or regional political and economic events or trends;

• the strength of the Dollar (the currency in which gold prices generally are quoted) and of other currencies;

• financial market expectations regarding the rate of inflation;

• interest rates;

• gold hedging and de-hedging by gold producers; and

• actual or expected gold sales by central banks and the

International Monetary Fund.

Our Company’s profitability may be negatively impacted if revenue from gold sales drops below the cost of production for

an extended period.

The exploration of mineral properties is highly speculative in nature, involves substantial expenditures, and is frequently

unproductive.

We must continually replace Ore Reserves that are depleted by production. Notably during fiscal 2005, we lost access to
the ore reserves from our North West Operations since Buffelsfontein, which owns the North West Operations, was placed into
provisional liquidation on March 22, 2005. Additionally, with the disposal of the Vatukoula mine during fiscal 2007 and of our
remaining interest in Emperor in fiscal 2008, we have lost access to our Australasian Operations’ Ore Reserves. Our future growth
and profitability will depend, in part, on our ability to identify and acquire additional mineral rights, and on the costs and results of
our continued exploration and development programs. Gold mining companies may undertake exploration activities to discover
gold mineralization, which in turn may give rise to new gold bearing ore bodies. Exploration is highly speculative in nature and
requires substantial expenditure for drilling, sampling and analysis of ore bodies in order to quantify the extent of the gold reserve.
Many exploration programs, including some of ours, do not result in the discovery of mineralization and any mineralization
discovered may not be of sufficient quantity or quality to be mined profitably. If we discover a viable deposit, it usually takes several
years from the initial phases of exploration until production is possible.

During this time, the economic feasibility of production may change. Moreover, we rely on the evaluations of
professional geologists, geophysicists, and engineers for estimates in determining whether to commence or continue mining.
These estimates generally rely on scientific and economic assumptions, which in some instances may not be correct, and could
result in the expenditure of substantial amounts of money on a deposit before it can be determined with any degree of accuracy
whether or not the deposit contains economically recoverable mineralization. Uncertainties as to the metallurgical recovery of any
gold discovered may not warrant mining on the basis of available technology. As a result of these uncertainties, we may not
successfully acquire additional mineral rights, or identify new Proven and Probable Ore Reserves in sufficient quantities to justify
commercial operations in any of our properties. Our mineral exploration rights may also not contain commercially exploitable
reserves of gold. The costs incurred on unsuccessful exploration activities are, as a result, not likely to be recovered and we could
incur a write-down on our investment in that interest or the irrecoverable loss of funds spent.

There is uncertainty with our Ore Reserve estimates.

Our Ore Reserve figures described in this document are the best estimates of our current management as of the dates
stated and are reported in accordance with the requirements of Industry Guide 7 of the SEC. These estimates may be imprecise
and may not reflect actual reserves or future production.

Should we encounter mineralization or formations different from those predicted by past drilling, sampling and similar

examinations, reserve estimates may have to be adjusted and mining plans may have to be altered in a way that might ultimately

cause our results of operations and financial condition to decline. Moreover, if the price of gold declines, or stabilizes at a price that is

lower than recent levels, or if our production costs, and in particular our labor costs, increase or recovery rates decrease, it may

become uneconomical to recover Ore Reserves containing relatively lower grades of mineralization. Under these circumstances, we

would be required to re-evaluate our Ore Reserves. Short-term operating factors relating to the Ore Reserves, such as the need for

sequential development of ore bodies and the processing of new or different grades, may increase our production costs and decrease

our profitability during any given period. These factors have and could result in reductions in our Ore Reserve estimates, which

could in turn adversely impact upon the total value of our mining asset base and our business, operating results and financial

condition.

Gold mining is susceptible to numerous events that could have an adverse impact on a gold mining business.

The business of gold mining takes place in underground mines, open pit mines and surface operations for the retreatment of

rock dumps and tailings dams. These operations are exposed to numerous risks and events, the occurrence of which may result in the

death of, or personal injury to, employees, the loss of mining equipment, damage to or destruction of mineral properties or

production facilities, monetary losses, delays in production, environmental damage, loss of the license to mine and potential legal

claims. The risks and events associated with the business of gold mining include, but are not limited to:

• environmental hazards and pollution, including the discharge of gases, toxic chemicals, pollutants, radioactive materials and

other hazardous material into the air and water;

• seismic activity which could lead to rock bursts, cave-ins, pit slope failures or, in the event of a significant event, total

closure of sections or an entire underground mine;

• unexpected geological formations which reduce or prevent mining from taking place;

• flooding, landslides, sinkhole formation, ground subsidence, ground and surface water pollution, and waterway

contamination;

• underground fires and explosions, including those caused by flammable gas;

• accidents caused from and related to drilling, blasting, removing, transporting and processing material, and the collapse of

pit walls and tailings dams; and

• decrease in labor productivity due to labor disruptions, work stoppages, disease, slowdowns or labor strikes.

In addition, deep level underground mines in South Africa, as compared to other gold mining countries, involve
significant risks and hazards not associated with open pit or surface rock dump and tailings dam retreatment operations. These
risks and hazards include underground fires, encountering unexpected geological formations, unanticipated ground and water
conditions, fall-of-ground accidents and seismic activity. The level of seismic activity in a deep level gold mine varies based on
the rock formation and geological structures in the mine. The occurrence of any of these hazards could delay production, increase
production costs and may result in significant legal claims.

Risks related to doing business in South Africa

Political or economic instability in South Africa may reduce our production and profitability.

We are incorporated and own operations in South Africa. As a result, political and economic risks relating to South Africa
could reduce our production and profitability. Large parts of the South African population are unemployed and do not have access to
adequate education, health care, housing and other services, including water and electricity. Government policies aimed at alleviating
and redressing the disadvantages suffered by the majority of citizens under previous governments may increase our costs and reduce
our profitability. In recent years, South Africa has experienced high levels of crime. These problems have impeded fixed inward
investment into South Africa and have prompted emigration of skilled workers. As a result, we may have difficulties attracting and
retaining qualified employees.

Recently, the South African economy has been growing at a relatively slow rate, inflation and unemployment have been
high by comparison with developed countries, and foreign currency reserves have been low relative to other emerging market
countries. In the late 1980s and early 1990s, inflation in South Africa reached highs of 20.6%. This increase in inflation resulted in
considerable year on year increases in operational costs. The inflation rate in South Africa still remains relatively high, as of
June 2008, the Consumer Price Inflation Index, or CPIX, stood at 11.6%, up from 6.4% in June 2007. The increase in inflation
continued as it reached a recent high in September 2008 of 13.6%. Continuing high levels of inflation in South Africa for prolonged
periods, without a concurrent devaluation of the Rand or increase in the price of gold, could result in an increase in our costs which
could reduce our profitability.

The situation in Zimbabwe continues to destabilize southern Africa. The most obvious manifestation of this was the spate of
xenophobic attacks on foreign Africans by South Africans that occurred during the fourth quarter of fiscal 2008. ERPM was directly
affected by this violence in that two employees died during this period and attendance was down at the operation for several days.
Although these attacks appear to be contained for the time being, the challenge for the South African Government remains to improve
the judicious immigration policy in the long run.

Additionally, the political situation in South Africa remains uncertain resulting from the deep divide in the population in
terms of support for the President of the African National Congress (ANC), Jacob Zuma. Thabo Mbeki lost his presidency of the
ANC on December 18, 2007 when the ANC chose Jacob Zuma as the new president of the ANC. Mbeki formally announced his
resignation as President of South Africa with effect from September 25, 2008 at which time Deputy President of the ANC, Kgalema
Motlanthe, took over. As our next political elections are set to take place in 2009, this continued political uncertainty could negatively
affect our business and our profitability.

Power stoppages or increases in the cost of power could negatively affect our results and financial condition.

Our mining operations are dependent on electrical power supplied by Eskom, South Africa’s state owned utility company.
As a result of a substantial increase in demand and insufficient generating capacity, Eskom has warned that the country could face
disruptions in electrical power supply. The available generating capacity of electricity was constrained mainly as a result of
unplanned maintenance at some of Eskom’s power stations, insufficient supply of coal to the coal fired plants and skills shortages. On
January 25, 2008, Eskom announced that they could no longer guarantee the supply of electricity to the South African mining
industry. Eskom subsequently cut off power supply to the mining industry for five days and a number of power outages followed
over several months thereafter. Eskom did manage to contain electricity stoppages but the fact remains that the country’s current
reserve capacity is insufficient and the risk of electricity stoppages is expected to continue through 2013. Apart from the five-day
closure, our production has not been affected, however further power supply stoppages or power cost increases could have an adverse
effect on our operating results and financial condition.

AIDS poses risks to us in terms of productivity and costs.

Acquired Immune Deficiency Syndrome, or AIDS, and tuberculosis which is closely associated with the onset of the disease
and is exacerbated in the presence of HIV/AIDS, represents a very serious health care challenge in the mining industry. Human
Immunodeficiency Virus, or HIV, is the virus that causes AIDS and South Africa has one of the highest HIV infection rates in the
world. It is estimated that approximately 35% - 40% of the mining industry workforce in South Africa are HIV positive. The exact
extent to which our mining workforce within South Africa is infected with HIV/AIDS is unknown at this stage. The existence of the
disease poses a risk to us in terms of the potential reduction in productivity and increase in medical costs.

The treatment of occupational health diseases and the potential liabilities related to occupational health diseases may

have an adverse effect the results of our operations and our financial condition.

The primary area of focus in respect of occupational health within our operations is noise-induced hearing loss (NIHL),

occupational lung diseases (OLD) and tuberculosis (TB). We provide occupational health services to our employees at our

occupational health centers and continue to improve preventive occupational hygiene initiatives. If the costs associated with

providing such occupational health services increase, such increase could have an adverse effect on the results of our operations and

our financial condition.

Furthermore, the South African Government, by way of a cabinet resolution in 1999, proposed a possible combination and

alignment of benefits of the Occupational Diseases in Mines and Works Act (ODMWA) that provides for compensation to miners

who have OLD, TB and combinations thereof, and the Compensation for Occupational Injuries and Diseases Act (COIDA) that

provides for compensation to non-miners who have OLD. If the outlined combination of ODMWA and COIDA were to occur, the

level of compensation claims we could be subject to could increase and consequently have an adverse effect on our financial

condition

Government policies in South Africa may adversely impact our operations and profits.

Government Regulation

The mining industry in South Africa is extensively regulated through legislation and regulations issued through the

government’s administrative bodies. These involve directives in respect of health and safety, the mining and exploration of minerals,

and managing the impact of mining operations on the environment. A variety of permits and authorities are required to mine lawfully,

and the government enforces its regulations through the various government departments.

The Mineral and Petroleum Resources Development Act, 2002

On May 1, 2004, the new Minerals and Petroleum Resources Development Act, or the MPRD Act, was enacted, which

places all mineral and petroleum resources under the custodianship of the state. Private title and ownership in minerals, or the “old

order rights,” are to be converted to “new order rights,” essentially the right to mine. The MPRD Act allows the existing holders of

mineral rights a period of five years to apply for the conversion of used old order rights, and one year for the conversion of unused

old order rights. Once these periods have lapsed, the holders may have to compete to acquire the right to mine minerals previously

held under old order rights. We have submitted the respective applications in order to comply with the requirements of the Mining

Charter as described below. To the extent that we are unable to convert some of our old order rights, we may have a claim for

compensation based on expropriation. It is not possible to forecast with any degree of certainty whether a claim will be enforceable

against the State, and if enforceable the level of compensation we will receive, if any. Factors that are taken into account are market

value, as well as the history of acquisition of these rights.

Where new order rights are obtained under the MPRD Act, these rights will not be equivalent to our existing property

rights. The area covered by the new order rights may be reduced by the State if it finds that the prospecting or mining work

program submitted by an applicant does not substantiate the need to retain the area covered by the old order rights. The duration

of the new order rights will no longer be perpetual but rather, in the case of new order mining rights, for a maximum of 30 years

with renewals of up to 30 years each and, in the case of prospecting rights, up to five years with one renewal of up to three years.

In addition, the new order rights will only be transferable subject to the approval of the Minister of Minerals and Energy. Mining

or prospecting must commence within one year or 120 days, respectively, of the mining right or prospecting right becoming

effective, and must be conducted continuously and actively thereafter. The new rights can be suspended or cancelled by the

Minister of Minerals and Energy in the event of a breach or, in the case of mining rights, non-optimal mining in accordance with the

mining work program.

The implementation of the MPRD Act will result in significant adjustments to our property ownership structure. We have
lodged applications to convert all of our older rights, however, to the extent that we are unable to convert some of our old order rights
to new order rights, and that the exclusive rights to minerals we enjoyed under the previous statutory regime are diminished, the
operations of the MPRD Act may result in significant adjustments to our property ownership structure, which in turn could have a
material adverse effect on the underlying value of our operations.

Taxation reform and mining royalties

The South African government has declared its intention to revisit the taxation regime of South African gold mining
companies. The South African gold mining industry is taxed under the gold taxation formula which recognizes the high level of
capital expenditure required to sustain a mining operation over the life of the mine. This results in an additional tax benefit not
afforded to other commercial companies. In addition, the South African Government initially indicated that it was looking at a
revenue based royalty for mining companies, as outlined in the draft Mineral and Petroleum Royalty Bill, 2003, or Royalty Bill,
which was released in March 2003 for comment. Two more drafts of the Royalty Bill were subsequently released on October 11,
2006 and December 6, 2007 after going through several revisions. The Royalty Bill was promulgated by government on
August 14, 2008 The most significant feature of the Royalty Bill is that the royalty is to be determined in accordance with a
formula based system and no longer to be a predetermined specific rate for the different types of minerals. The royalty will be
deductible for normal income tax purposes. Payment of royalties will commence on May 1, 2009 but only on new and converted
mining rights. As at October 31, 2008, none of our old order mining rights had been converted to new order mining rights. The
introduction of similar revenue based royalties or any future tax reforms would have an adverse effect on the business,
operatingresults and financial condition of our operations.

The Broad Based Socio-Economic Empowerment Charter

The Broad Based Socio-Economic Empowerment Charter for the South African Mining Industry, or Mining Charter
(effective from May 1, 2004), establishes certain numerical goals and timeframes to transform equity participation in the mining
industry in South Africa.

The goals set by the Mining Charter include that each mining company must achieve 15 percent ownership by historically
disadvantaged South Africans of its South African mining assets within five years and 26 percent ownership within ten years from
May 1, 2004. This is to be achieved by, among other methods, the sale of assets to historically disadvantaged persons on a willing
seller/willing buyer basis at fair market value. When considering applications for the conversion of existing rights, the State will
take a “scorecard” approach, evaluating the commitments of each company to the different facets of promoting the objectives of
the Mining Charter. Failure on our part to comply with the requirements of the Mining Charter and the “scorecard” could subject
us to negative consequences. We may incur expenses in giving additional effect to the Mining Charter and the “scorecard”,
including costs which we may incur in facilitating the financing of initiatives towards ownership by historically disadvantaged
persons. There is also no guarantee that any steps we might take to comply with the Mining Charter would ensure that we could
successfully acquire new order mining rights in place of our existing rights. In addition, the terms of such new order rights may
not be as favorable to us as the terms applicable to our existing rights. We run the risk of losing our mining rights if we do not
comply with the requirements stipulated in the Mining Charter. This could have an adverse affect on our business, operating
results and financial condition.

Land claims

Our privately held land and mineral rights in South Africa could be subject to land restitution claims under the Restitution of
Land Rights Act, 1994 (as amended), or Land Rights Act. Under the Land Rights Act, any person who was dispossessed of rights to
land in South Africa as a result of past racially discriminatory laws or practices is granted certain remedies, including the restoration
of the land. The initial deadline for such claims was December 31, 1998. We have not been notified of any land claims, but it is
possible that administrative delays in the processing of claims could have delayed such notification. Any claims of which we are
notified in the future could have a material adverse effect on our right to the properties to which the claims relate and prevent us using
that land and exploiting any mineral reserves located there. This could have an adverse affect on our business, operating results and
financial condition.

Since our South African labor force has substantial trade union participation, we face the risk of disruption from labor
disputes and new South African labor laws.

Labor costs constitute 41% of our production costs for fiscal 2008, 39% for fiscal 2007 and 35% for fiscal 2006. As of
June 30, 2008, we employ and contract 7,627 people, of whom, approximately 70% are members of trade unions or employee
associations. We have entered into various agreements regulating wages and working conditions at our mines. Unreasonable wage
demands could increase production costs to levels where our operations are no longer profitable. This could lead to accelerated mine
closures and labor disruptions.

In recent years, labor laws in South Africa have changed in ways that significantly affect our operations. In particular, laws
that provide for mandatory compensation in the event of termination of employment for operational reasons and that impose large
monetary penalties for non-compliance with the administrative and reporting requirements of affirmative action policies could result
in significant costs to us. In addition, future South African legislation and regulations relating to labor may further increase our costs
or alter our relationship with our employees. Labor cost increases could have an adverse effect on our business, operating results and
financial condition.

Labor unrest and xenophobia could affect production.

We may experience labor unrest at our operations. In particular, during October and November 2002, ERPM experienced
some labor unrest during which several striking contract workers were wounded and two workers were killed by employees of a
private security company. Furthermore, during fiscal 2008, South Africa fell victim to a slue of xenophobic attacks when a series of
riots started in the township of Alexandria. This violence of locals attacking migrants from other African countries had a direct
impact on our operations at ERPM. Three employees died and attendance was down at the operation for several days. Although these
attacks have been contained, the challenge for the South African Government is to come up with a long-term and judicious
immigration policy.

A repeat of such events could have an adverse effect on our business, operating results and financial condition.

The global economic crisis could have an adverse effect on our results.

2008 has marked a global economic crisis. Some of the indicators of this include high oil prices, global inflation, a credit
crisis that has led to the bankruptcy of large investment and commercial banks in various nations around the world, increased
unemployment and the possibility of global recession. In the long-term, all of these indicators could have an adverse effect on our
operating results.

Our financial flexibility could be materially constrained by South African currency restrictions.

South African law provides for exchange control regulations, which restrict the export of capital from the Common

Monetary Area, including South Africa. The Exchange Control Department of the South African Reserve Bank, or SARB, is

responsible for the administration of exchange control regulations. In particular, South African companies:

• are generally not permitted to export capital from South Africa or to hold foreign currency without the approval of SARB;

• are generally required to repatriate, to South Africa, profits of foreign operations; and

• are limited in their ability to utilize profits of one foreign business to finance operations of a different foreign business.

While the South African Government has relaxed exchange controls in recent years, it is difficult to predict whether or

how it will further relax or abolish exchange control measures in the future. For further information see Item 10D.: “Exchange

Controls.”

Risks related to ownership of our ordinary shares or ADSs

Your ability to sell a substantial number of ordinary shares may be restricted by the limited liquidity of ordinary

shares traded on JSE Limited, or JSE.

In July 2006, we delisted from the Australian Stock Exchange and currently our primary listing for our ordinary shares is

only the JSE. The principal trading market for our ADSs is the Nasdaq Capital Market, or Nasdaq. On a historical basis, the

trading volumes and liquidity of shares listed on the JSE have been low in comparison with the Nasdaq. For the 12 months ended

June 30, 2008, only 31% of the ordinary shares publicly traded were traded on the JSE. The limited liquidity of the ordinary

shares traded on the JSE could limit your ability to sell a substantial number of ordinary shares on the JSE in a timely manner,

especially by means of a large block trade.

Sales of large volumes of our ordinary shares or ADSs or the perception that these sales may occur, could adversely

affect the prevailing market price of such securities.

The market price of our ordinary shares or ADSs could fall if substantial amounts of ordinary shares or ADSs are sold by

our stockholders, or there is the perception in the marketplace that such sales could occur. Current holders of our ordinary shares

or ADSs may decide to sell them at any time. Sales of our ordinary shares or ADSs, if substantial, or the perception that these

sales may occur and be substantial, could exert downward pressure on the prevailing market prices for our ordinary shares or

ADSs, causing their market prices to decline. Trading activity of hedge funds and the ability to borrow script in the market place

will increase trading volumes and may place our share price under pressure.

our rights as a shareholder are governed by South African law, which differs in material respects from the rights of

shareholders under the laws of other jurisdictions.

Our Company is a public limited liability company incorporated under the laws of the Republic of South Africa. The

rights of holders of our ordinary shares, and therefore many of the rights of our ADS holders, are governed by our memorandum

and articles of association and by South African law. These rights differ in material respects from the rights of shareholders in

companies incorporated elsewhere, such as in the United States. In particular, South African law significantly limits the

circumstances under which shareholders of South African companies may institute litigation on behalf of a company.

We may be subject to an increase in compliance costs with our continued efforts to increase the transparency of our

reporting requirements and changing corporate governance initiatives.

As a result of our listings on the Nasdaq Capital Market and JSE, we are required to comply with new and changing

reporting requirements that have over recent years emphasized an increase in the transparency of public disclosure. The associated

regulatory standards set forth by the exchanges’ governing bodies may change over time and may be subject to interpretation. As

a result we may not execute the application of these standards properly and will congruently experience an increase in the cost of

our compliance efforts. For example, management’s required assessment of our internal controls over the financial reporting

process stipulated by Section 404 of the Sarbanes-Oxley Act of 2002 commands the need for resources from management in

addition to our external auditors who are required to attest to our internal control over financial reporting. Maintaining high

standards of corporate governance and public disclosure is highly prioritized in our organization and with our continued efforts to

comply with these laws currently effective and any future legislative introductions or changes, we will continue to incur the

related costs.

It may not be possible for you to effect service of legal process, enforce judgments of courts outside of South Africa or
bring actions based on securities laws of jurisdictions other than South Africa against us or against members of our board.

Our Company, certain members of our board of directors and executive officers are residents of South Africa. In
addition, our cash producing assets are located outside the United States and a major portion of the assets of members of our board
of directors and executive officers are either wholly or substantially located outside the United States. As a result, it may not be
possible for you to effect service of legal process, within the United States or elsewhere outside South Africa, upon most of our
directors or officers, including matters arising under United States federal securities laws or applicable United States state
securities laws.

Moreover, it may not be possible for you to enforce against us or the members of our board of directors and executive

officers judgments obtained in courts outside South Africa, including the United States, based on the civil liability provisions of

the securities laws of those countries, including those of the United States. A foreign judgment is not directly enforceable in South

Africa, but constitutes a cause of action which will be enforced by South African courts provided that:

• the court which pronounced the judgment had jurisdiction to entertain the case according to the principles recognized by

South African law with reference to the jurisdiction of foreign courts;

• the judgment is final and conclusive (that is, it cannot be altered by the court which pronounced it);

• the judgment has not lapsed;

• the recognition and enforcement of the judgment by South African courts would not be contrary to public policy, including

observance of the rules of natural justice which require that no award is enforceable unless the defendant was duly served

with documents initiating proceedings, that he was given a fair opportunity to be heard and that he enjoyed the right to be

legally represented in a free and fair trial before an impartial tribunal;

• the judgment was not obtained by fraudulent means;

• the judgment does not involve the enforcement of a penal or revenue law; and

• the enforcement of the judgment is not otherwise precluded by the provisions of the Protection of Business Act, 1978 (as

amended), of South Africa.

It is the policy of South African courts to award compensation for the loss or damage actually sustained by the person to
whom the compensation is awarded. Although the award of punitive damages is generally unknown to the South African legal system
that does not mean that such awards are necessarily contrary to public policy. Whether a judgment was contrary to public policy
depends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. South
African courts cannot enter into the merits of a foreign judgment and cannot act as a court of appeal or review over the foreign court.
South African courts will usually implement their own procedural laws and, where an action based on an international contract is
brought before a South African court, the capacity of the parties to the contract will usually be determined in accordance with South
African law. It is doubtful whether an original action based on United States federal securities laws may be brought before South
African courts. A plaintiff who is not resident in South Africa may be required to provide security for costs in the event of
proceedings being initiated in South Africa. Furthermore, the Rules of the High Court of South Africa require that documents
executed outside South Africa must be authenticated for the purpose of use in South African courts. It is not possible therefore for an
investor to seek to impose criminal liability on us in a South African court arising from a violation of United States federal
securities laws.

ITEM 4. INFORMATION ON THE COMPANY

4A. HISTORY AND DEVELOPMENT OF THE COMPANY

Introduction

DRDGOLD Limited is a South African gold mining company engaged in underground and surface gold mining including
exploration, extraction, processing and smelting. We have a 74% interest in DRDGOLD South African Operations (Pty) Limited, or
DRDGOLD SA. Of the remaining 26%, 20% is held by our Black Economic Empowerment, or BEE, partner Khumo Gold SPV
(Pty) Limited, or Khumo Gold and 6% is held by an employee trust. DRDGOLD SA wholly owns and operates Blyvooruitzicht Gold
Mining Company Limited, or Blyvoor, East Rand Proprietary Mines Limited, or ERPM, and Crown Gold Recoveries (Pty) Limited,
or Crown. DRDGOLD SA is also in a 50:50 joint venture known as Ergo Mining (Pty) Limited, or the Ergo Joint Venture, with
Mintails SA (Pty) Limited a subsidiary of Mintails Limited of Australia. Phase 1 of the Ergo Joint Venture, was subsequently
established under the Elsburg Gold Mining Joint Venture, or the Elsburg Joint Venture.

We are a public company, incorporated on February 16, 1895, as Durban Roodepoort Deep, Limited, and our shares were
listed on the JSE in that same year. In 1898, our milling operations commenced with 30 stamp mills and in that year we treated
38,728 tons of ore and produced 22,958 ounces of gold. In South Africa, we have focused our operations on the West Witwatersrand
basin which has been a gold production region for over 100 years.

To ensure access to global markets our shares and/or related instruments trade on the JSE, Nasdaq, the Marche Libre on the
Paris Bourse, the Brussels Bourse in the form of International Depository Receipts, the Over The Counter, or OTC, market in Berlin
and Stuttgart and the Regulated Unofficial Market on the Frankfurt Stock Exchange.

Our registered office and business address is 299 Pendoring Avenue, Blackheath, Randburg, South Africa, 2195. The postal
address is P.O. Box 390, Maraisburg 1700, South Africa. Our telephone number is (+27 11) 219-8700 and our facsimile number is
(+27 11) 476-2637. We are registered under the South African Companies Act, 1973 (as amended) under registration number
1895/000926/06. For our ADSs, The Bank of New York, at 101 Barclay Street, New York, NY 10286, United States, has been
appointed as agent.

South African Operations

• Blyvoor, acquired on September 15, 1997, in exchange for 12,693,279 of our ordinary shares, is a predominantly

underground operating mine located within the Witwatersrand Basin, exploiting gently to moderately dipping gold bearing

quartz pebble conglomerates in addition to certain surface sources.

• Crown acquired on September 14, 1998, in exchange for 5,925,139 of our ordinary shares, also located within the

Witwatersrand Basin, exploits various surface sources, including sand and slime tailings deposited as part of previous

mining operations.

• ERPM which consists of an underground mine and the Cason Dump surface retreatment operation was acquired on

October 10, 2002, by Crown.

• Ergo Joint Venture is expected to explore, evaluate and process up to 1.7 billion tones of gold-, uranium- and sulphur-

bearing tailings on the East and Central Rand goldfields of South Africa.

Australasian Operations

• Tolukuma (various stakes acquired between September 1999 to June 2001, in exchange for a total of 8,125,082 shares and

$3.3 million in cash), an underground mine in PNG, provided an initial base in the Australasian region and led to the

acquisition of a 20% interest in the unincorporated Porgera Joint Venture.

• Porgera, an open pit and underground mining operation in PNG, was acquired in October 2003 in exchange for 6,643,902

of our ordinary shares and $60.3 million in cash.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on October 22, 2007, we

sold our entire shareholding in Emperor to various institutional investors.

Important Events in Our Development Generally and in the Current Year

Top Star Dump

On August 28, 2006, we concluded an agreement with Anglo Gold Ashanti Limited, or Anglo Gold Ashanti, to purchase the

remaining extent of Erf 1 Park Central Township, better known as “The Top Star Dump”, in central Johannesburg for an amount of

R8.0 million. In addition, a further R28.4 million was spent on the infrastructure required to process the dump. The Top Star Dump

has been evaluated geostatistically by us and reviewed independently by Coffey Mining (an exploration, mining and resource consulting
firm) and has a probable reserve of 5.2 Mt, at a grade of 0.775 g/t.

On August 30, 2006, the Provincial Heritage Resources Authority of Gauteng, or PHRAG, published a notice in the
Gauteng Provincial Gazette in terms of which the dump was provisionally protected for a period of two years. We lodged an appeal
against the decision to issue the protection order, and on October 30, 2007 the PHRAG withdrew the protection order.

On August 21, 2008 a Mining Right was granted for gold recovery over the Top Star Dump, in favor of Crown by the
Department of Minerals and Energy with effect from August 21, 2008. The mining right for the Top Star Dump has been granted
until August 20, 2013.

Ergo and Elsburg Joint Ventures

On June 7, 2007, we and Mintails announced the formation of the Ergo Joint Venture between Mintails SA and DRDGOLD

SA. Following discussions initiated in the first quarter of 2007, the Ergo Joint Venture parties agreed to pursue a strategy to

consolidate certain of their assets on the East Rand. Mintails SA contributed one fully refurbished carbon-in-leach, or CIL, circuit at

the Brakpan plant and DRDGOLD SA contributed the Elsburg tailings complex, comprising approximately 180 Mt of tailings. This

part of the project, previously referred to as Phase 1 of the Ergo Joint Venture, was subsequently established under the Elsburg Gold

Mining Joint Venture, or Elsburg Joint Venture. Mintails SA and DRDGOLD SA, through their subsidiaries, initially owned 50% of

the Elsburg Joint Venture and the Ergo Joint Venture.

On August 6, 2007, the parties to the Ergo Joint Venture entered into a sale of assets agreement with Anglo Gold Ashanti

pursuant to which it acquired the remaining moveable and immovable assets of Ergo for a consideration of R42.8 million. These

assets will be operated by the Ergo Joint Venture for its own account, under the Anglo Gold Ashanti authorizations, until new order

mining rights have been obtained. These assets, comprising servitudes (access agreements), infrastructure, piping, equipment, old

order mining rights and the right to an additional 15 Mt of tailings material, provide a platform to consolidate these tailings assets

with the Elsburg tailings.

On November 26, 2007, we announced that DRDGOLD SA signed a binding term sheet with Mintails SA, which provided

for significant expansion of the joint venture through:

• the planned refurbishment of all infrastructure at the Brakpan plant, to increase capacity from one CIL gold recovery circuit

to a plant capable of processing tailings for the recovery of gold, uranium and sulphuric acid; and

• substantially increasing available tailings material from 180 Mt to up to 1,700 Mt, by securing rights over tailings dumps

and slimes dams in the region.

Additional agreements were concluded on November 14, 2007 for:

• the acquisition by the Ergo Joint Venture of additional tailings properties and the Withok deposition complex from Anglo

Gold Ashanti for a payment of R45.0 million and assumption of rehabilitation obligations; and

• the acquisition by Mintails SA of an option to acquire tailings properties (the Grootvlei Properties), comprising some

105 Mt, from Pamodzi Gold Limited. The Grootvlei properties form part of the Mintails SA contribution to the expanded

Ergo Joint Venture.

The acquisition of the Withok deposition site provides the expanded Ergo Joint Venture with considerable additional
deposition capacity commensurate with the substantial increases in capacity for tailings material and processing. The expanded Ergo
Joint Venture is conducting a feasibility study, which is expected to be completed in the final quarter of calendar 2009, to refurbish
and reopen the full Brakpan plant, which historically produced gold, uranium and sulphuric acid.

Phase 1 of the expanded Ergo Joint Venture involves the refurbishment of one CIL circuit at the Brakpan plant with the
capacity to treat an estimated 15Mt of tailings a year, for the recovery of some 75,000 ounces of gold a year. Phase 2, for which we
are currently completing a feasibility study, envisages the expansion of the gold plant by refurbishing the second CIL circuit and
developing uranium and acid plants. The expanded Ergo Joint Venture is managed by Crown, which has treated more than 200Mt of
sand and slime and produced approximately 2.8 million ounces of gold through its plants.

On September 29, 2008, DRDGOLD SA acquired a further 15% interest in the Elsburg Joint Venture from Mintails SA
resulting in DRDGOLD SA, which holds its interest through its subsidiary, ERPM, holding a 65% interest and Mintails SA a 35%
interest in the joint venture. In addition, Mintails has granted DRDGOLD SA a conditional option, or the Elsburg option, to
acquire a further 11.4% interest in the Elsburg Joint Venture. The 50:50 interests of DRDGOLD SA and Mintails in the Ergo Joint
Venture were not affected by the acquisition and remained unchanged. The purchase consideration in respect of the acquisition
was R100 million, which is to be re-invested by Mintails in the Elsburg Joint Venture and the Ergo Joint Venture. The effective
date of the acquisition will be the date upon which it becomes unconditional. The option is exercisable between January 1, 2009
and January 15, 2009 at an exercise price of R75.9 million.

In terms of a binding heads of agreement dated December 8, 2008, DRDGOLD has agreed to acquire:

• the remaining 35% interest (or 23.6% if the Elsburg option is exercised prior to implementation of the acquisition) held

by Mintails, through its subsidiary Mogale Gold (Pty) Limited, in the Elsburg Joint Venture; and

• all of the shareholder’s loans from the Mintails group to the Elsburg Joint Venture

The implementation of the acquisition will result in the DRDGOLD group holding 100% of the Elsburg Joint Venture. The 50:50
interests of DRDGOLD SA and Mintails in the Ergo Joint Venture are not affected by the acquisition. The purchase consideration
in respect of the acquisition is R177.0 million, which is to be settled in cash. In the event that the Elsburg option is exercised prior
to the implementation of the acquisition, the parties have agreed that the purchase price will be reduced by approximately
R23.8 million in recognition of amounts that will have been paid by the DRDGOLD group on exercise of the Elsburg option. The
effective date of the acquisition is December 8, 2008, although the risk and title in respect of the acquisition only passes to the
DRDGOLD group on completion of the acquisition.

Emperor

On July 27, 2007, DRDGOLD shareholders at a general meeting approved the disposal by Emperor of its 20% interest in
the Porgera Joint Venture to a subsidiary of Barrick for a purchase consideration of $250.0 million and the grant of an option to
Barrick or its nominee to subscribe for 153,325,943 shares in Emperor. Emperor shareholders also approved the disposal and a capital
distribution of A$0.05 per Emperor share to Emperor shareholders by way of a capital return out of the surplus cash realized from the
disposal, at a general meeting held on July 30, 2007. The sale transaction was completed on August 17, 2007, for a final cash
consideration of R1.9 billion ($255.0 million), which included interest, and subsequently Emperor retired all its debt facilities. The
capital distribution was completed on September 3, 2007.

On October 22, 2007, we sold our entire interest in Emperor for R355.8 million (A$55.9 million) to 26 institutional
investors with each acquiring between 0.4% and 21.6% of the shares.

ERPM

On October 6, 2008 we ceased pumping at ERPM’s South West Vertical Shaft for safety reasons following the death of two
employees underground. Post mortems suggest that the two men, who had been conducting routine water level measurements, died of
asphyxiation. The South West Vertical Shaft has been used only for water pumping purposes for several years.

The Department of Minerals and Energy issued a Section 54 notice under the Mine Health and Safety Act, subjecting access
into the area to certain restrictions and conditions relating to ventilation. On October 23, 2008, drilling and blasting operations were
suspended after the cessation of pumping of underground water at South West Vertical shaft on October 6, 2008 for safety reasons.
Although the Far East Vertical shaft where production is taking place is sealed off from water ingress from the South West Vertical
shaft, the pumps at Far East Vertical shaft will no longer be able to cope with rising water, which includes the water resulting from
the ice sent underground every day to cool down the underground working places. Without being able to continue to supply ice
underground for this purpose, the underground temperature will become unacceptably high and it will not be safe for employees to
continue work underground at the Far East Vertical shaft.

On November 19, 2008 we announced our intention to place on care and maintenance the underground operations of the
ERPM, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to determine the future
of the mine’s 1,700 employees.

Other

We concluded an agreement with M5 Developments (Pty) Limited, or M5, on July 21, 2005, in terms of which M5, against
payment of a non-refundable fee of R1.5 million, was granted an option to acquire Durban Deep’s mine village for R15.0 million. On
the exercise of the option, the option fee would be deemed part payment of the purchase consideration.

On November 18, 2005, M5 exercised the option and provided a guarantee for payment. Prior to the registration of thetransfer
occurring, we were notified by Rand Leases Properties Limited (formerly JCI Properties Limited) of an alleged pre-
emptive right in respect of the property in terms of an agreement dated December 1996, pursuant to which the property should be
first offered to be sold to them on similar terms. We subsequently repudiated our agreement with M5 and notified Rand Leases
Properties Limited that we did not intend offering the property to them. Both parties indicated to us their intentions to institute
legal proceedings for the sale and transfer of the property. On December 12, 2006, Rand Leases Properties Limited issued a
summons against us and we filed an appearance to defend. A trial date was allocated by the High Court of South Africa for April 25,
2008 but was postponed. A new date has not yet been set.

On September 17, 2008, our wholly-owned subsidiary, DRD (Offshore) Limited, sold all of its shares in G.M. Network
Limited, or GoldMoney, to other GoldMoney shareholders. The cash consideration in respect of the disposal amounted to
R23.8 million ($2.9 million). GoldMoney is a company that holds the rights, patents and other intellectual property of
GoldMoney.com, which is a product specializing in digital gold currency. We previously held a 50.25% shareholding in Net-Gold
Services Limited, which was converted on March 10, 2008 into a 12.3% shareholding in GoldMoney,

For further information on other capital investments, divestures, capital expenditure and capital commitments, see Item 4D.:

“Property, Plant and Equipment,” and Item 5B.: “Liquidity and Capital Resources.”

4B. BUSINESS OVERVIEW

Description of Our Mining Business

Exploration

Exploration activities are focused on the extension of existing ore bodies and identification of new ore bodies both at

existing sites and at undeveloped sites. Once a potential ore body has been discovered, exploration is extended and intensified in

order to enable clearer definition of the ore body and the portions with the potential to be mined. Geological techniques are constantly

refined to improve the economic viability of exploration and exploitation.

Mining

Our operations comprise relatively mature assets and the principal mining method used is the extraction of previously

abandoned Ore Reserves, which require a high degree of opening up of these previously abandoned Ore Reserves.

Our Metallurgical Plants and Processes

A detailed review of the metallurgical plants and processes for each of the mining operations is provided under Item 4D:

“Property, Plant and Equipment.”

Market

The gold market is relatively liquid compared to other commodity markets, with the price of gold generally quoted in

Dollars. Physical demand for gold is primarily for manufacturing purposes, and gold is traded on a world-wide basis. Refined gold

has a variety of uses, including jewelry, electronics, dentistry, decorations, medals and official coins. In addition, central banks,

financial institutions and private individuals buy, sell and hold gold bullion as an investment and as a store of value (due to the

tendency of gold to retain its value in relative terms against basic goods and in times of inflation and monetary crises).

The use of gold as a store of value and the large quantities of gold held for this purpose in relation to annual mine production

have meant that historically the potential total supply of gold has been far greater than demand. Thus, while current supply and

demand play some part in determining the price of gold, this does not occur to the same extent as in the case of other commodities.

Instead, the gold price has from time to time been significantly affected by macro-economic factors such as expectations of inflation,

interest rates, exchange rates, changes in reserve policy by central banks, and global or regional political and economic crises. In

times of inflation and currency devaluation, gold is often seen as a safe haven, leading to increased purchases of gold and support for

its price.

The gold market was strong but exceptionally volatile in fiscal 2008, reaching an all-time high of $1,030 per ounce. The

average spot price was 31% higher than in the previous fiscal year, at $821 per ounce. Amid continuing global economic uncertainty,

investors turned once more to gold (notably to safe-haven products such as Exchange Traded Funds) and this, together with more de-

hedging activity and a slowdown in new mine supply, particularly from South Africa, saw demand exceed supply. The average gold

price received by us for the year was R193,373 per kilogram which was 30% higher than the previous year at R148,912 per kilogram.

Looking ahead, we believe that the global economic environment, including economic uncertainty and other factors, will
continue to make gold attractive to investors. The supply side shortfall is likely to continue because of circumstances including
operational challenges and delays in opening new mines and the challenge, particularly to South African producers such as ourselves,
of maintaining profitable production in the face of increasing mining depths and rising costs.

Our total revenue by geographic market was as follows:

Year ended June 30,

2008

2007

2006

R’000

South Africa.........................................................................................................................

1,843,912

1,534,777

970,605

Australasia ...........................................................................................................................

89,235

674,928

629,389

1,933,147

2,209,705

1,599,994

All gold produced by our South African Operations is sold on our behalf by the Rand Refinery Limited, or RRL, in

accordance with a refining agreement entered into in October 2001. At our various operations the gold bars which are produced

consist of approximately 85% gold, 7-8% silver and the balance comprises copper and other common elements. The gold bars are

sent to the RRL for assaying and final refining where the gold is purified to 99.9% and cast into troy ounce bars of varying weights.

RRL then sells the gold on the same day as delivery, for the London afternoon fixed Dollar price, with the proceeds remitted to us in

Rand within two days. In exchange for this service, we pay RRL a variable refining fee plus fixed marketing, loan and administration

fees. We currently own 4.1% (Fiscal 2007: 4.1%) of RRL (which is jointly owned by South African mining companies).

Mr. D.J. Pretorius, our Chief Executive Officer Designate, is a director of RRL.

Ore Reserves

The tables below set out the Proven and Probable Ore Reserves that are the Group’s Ore Reserves as of June 30, 2008,

and 2007, in both imperial and metric units. Our Ore Reserves are comprised of our attributable Ore Reserves.

Ore Reserve estimates in this Annual Report are reported in accordance with the requirements of the SEC’s Industry

Guide 7. Accordingly, as of the date of reporting, all reserves are planned to be mined out under the life of mine business plans

within the period of our existing rights to mine, or within the time period of assured renewal periods of our rights to mine. In

addition, as of the date of reporting, all reserves are covered by required permits and governmental approvals. See Item 4D:

“Property, Plant and Equipment” for a description of the rights in relation to each mine.

In South Africa, we are legally required to publicly report Ore Reserves and Mineral Resources in compliance with the

South African Code for the Reporting of Mineral Resources and Ore Reserves, or SAMREC Code. The SEC’s Industry Guide 7

does not recognize Mineral Resources. Accordingly, we do not include estimates of Mineral Resources in this Annual Report.

Ore Reserve calculations are subject to a review conducted in accordance with SEC Industry Guide 7. Components of the

calculations included in the geological models and input parameters of the reserve estimation procedures, were checked. In

addition, visual inspection of the planning to deliver an individual block to the metallurgical plant, and the recovery, and

deposition of the tails, took place. A check is also made of the financial input into the costs and revenue to affirm that they are

within reasonable limits.

The Ore Reserves are inclusive of diluting materials and allow for losses that may occur when the material is mined. Ore

Reserve tons, grade and content are quoted as delivered to the gold plant. There are two types of methods available to select ore for

mining. The first is pay-limit, which includes cash costs, including overhead costs, to calculate the pay-limit grade. The second is the

cut-off grade which includes cash costs, excluding fixed overhead costs, to calculate the cut-off grade, resulting in a lower figure than

the full pay-limit grade. The cut-off grade is based upon direct costs from the mining plan, taking into consideration production

levels, production efficiencies and the expected costs. We use the pay-limit to determine which areas to mine, as an overhead

inclusive amount that is indicative of the break-even position, especially for marginal mining operations.

The pay-limit approach is based on the minimum in-situ grade of ore blocks, for which the production costs, which includes
all overhead costs, including head office charges, are equal to a three-year historical average gold price per ounce for that year. This
calculation also considers the previous three years’ mining and milling efficiencies, which includes metallurgical and other mining
factors and the production plan for the next twelve months. Only blocks above the pay-limit grade are considered for mining. The
pay-limit grade is higher than the cut-off grade, because this includes overhead costs, which indicates the break-even position of the
operation, especially significant for marginal mines.

When delineating the economic limits to the ore bodies we adhere to the following guidelines:

• The potential ore to be mined is well defined by an externally verified and approved geological model created using our

mining software;

• The potential ore, which is legally allowed to be mined, is also confined by the mine's lease boundaries; and

• A full life of mine business plan (physical 5 year plan) is constructed to mine the ore from existing infrastructure.

Our Ore Reserves figures are estimates, which may not reflect actual reserves or future production. We have prepared these

figures in accordance with industry practice, converting mineral deposits to an Ore Reserve through the preparation of a mining plan.

The Ore Reserve estimates contained herein inherently include a degree of uncertainty and depend to some extent on statistical

inferences which may ultimately prove to have been unreliable.

Reserve estimates require revisions based on actual production experience or new information. Should we encounter

mineralization or formations different from those predicted by past drilling, sampling and similar examinations, reserve estimates

may have to be adjusted and mining plans may have to be altered in a way that might adversely affect our operations. Moreover, if

the price of gold declines, or stabilizes at a price that is lower than recent levels, or if our production costs increase or recovery rates

decrease, it may become uneconomical to recover Ore Reserves containing relatively lower grades of mineralization.

Our Ore Reserves are prepared using three year average gold prices at the time of reserve determination. In light of the

significant increase in gold prices, since fiscal 2006 the Company prepares its life of mine business plans using the prevailing gold

price at the time of the reserve determination, which is at the end of the fiscal year. In fiscal years 2007 and 2006, the Company

presented Ore Reserves based upon the prevailing gold price at fiscal year end to determine Ore Reserves, instead of a three year

average price.

Gold prices and exchange rates used for Ore Reserves and for our business plan are outlined in the following table.

2008

2007

Three-year average

Business Plan

Three-year average

Business Plan

Reserve gold price –$/oz

664

853

553

660

Reserve gold price –R/kg

150,622

208,287

115,314

154,437

Exchange rate –R/$

7.06

7.59

6.49

7.28

In fiscal 2008, our attributable Ore Reserves decreased by 7% from 4.8 million ounces at June 30, 2007, to 4.5 million

ounces at June 30, 2008, primarily as a consequence of depletion and the discontinued operations in Australasia.

Based on the life of mine business plans, the life of mine for each of our operations at June 30, 2008, were as follows:

Underground

Surface

Mine

2008

2007

2008

2007

South Africa

Blyvoor

.....................................................

20 years

9 years

5 years

Crown

.......................................................

N/A

9 years

7 years

ERPM

......................................................

8 years

7 years

Ergo Joint Venture

....................................

N/A

2 years

N/A

Australasia

Tolukuma

..................................................

N/A

2 years

N/A

Our Ore Reserves as of June 30, 2008 and 2007 are set forth in the table below.

We have a 74% interest in DRDGOLD SA which in turn has a 100% interest in Blyvoor, Crown and ERPM.

We have a 37% attributable interest in the Ergo Joint Venture.

On October 22, 2007, we sold our entire shareholding in Emperor.

Ore Reserves: Imperial

At June 30, 2008

At June 30, 2007

Proven Ore Reserves

Probable Ore Reserves

Proven Ore Reserves

Probable Ore Reserves

Tons

Grade

Gold

Content

Tons Grade

Gold

Content

Tons

Grade

Gold

Content

Tons

Grade

Gold

Content

(mill)

(oz/ton)

('000 ozs) (mill) (oz/ton) ('000 ozs) (mill) (oz/ton) ('000 ozs)

(mill)

(oz/ton) ('000 ozs)

South African Operations:

Blyvoor

Underground ....................................................

11.36

0.21

2,439

3.04

0.22

665

13.40

0.20

2,744

4.40

0.20

899

Surface .............................................................

10.70

0.02

228

14.19

0.02

243

Total Blyvoor .................................................

22.06

0.12

2,667

3.04

0.22

665

27.59

0.11

2,987

4.40

0.20

899

ERPM

Underground ....................................................

0.22

129

2.24

0.20

453

0.51

0.29

147

0.58

0.23

135

Surface .............................................................

10.19

0.02

185

10.74

0.02

200

Total ERPM......................................................

10.77

0.03

314

2.24

0.20

453

11.25

0.03

347

0.58

0.23

135

Crown

Surface ..............................................................

9.22

0.01

123 15.98

0.01

227

11.25

0.02

205

8.91

0.02

166

Total Crown.....................................................

0.01

123 15.98

0.01

227

11.25

0.02

205

8.91

0.02

166

Ergo Joint Venture

Surface ..............................................................

5.83

0.01

Total Ergo Joint Venture

................................

5.83

0.01

Australasian Operations:

Tolukuma

Underground ......................................................

0.18

0.60

108

Surface ...............................................................

Total Tolukuma.................................................

0.18

0.60

108

Total Group

Underground ......................................................

11.94

0.22

2,568

5.28

0.21

1,118

13.91

0.21

2,891

5.16

0.22

1,142

Surface ...............................................................

35.94

0.02

597 15.98

0.01

227

36.18

0.02

648

8.91

0.02

166

Total

..............................................................

47.88

0.07

3,165 21.26

0.06

1,345

50.09

0.07

3,539

14.07

0.09

1,308

Proven and Probable Ore reserves for fiscal 2008 reflect our attributable 74% interest in Blyvoor, ERPM and Crown.

Proven and Probable Ore reserves for fiscal 2008 reflect our attributable 37% interest in the Ergo Joint Venture.

Proven and Probable Ore reserves for fiscal 2007 reflect our attributable 79% interest in Tolukuma. On October 22, 2007, we sold our entire shareholding in Emperor.

The Ore reserves listed in the above table are estimates of what can be legally and economically recovered from operations, and, as stated, are estimates of mill delivered in tons.

Ore Reserves: Metric

At June 30, 2008

At June 30, 2007

Proven Ore Reserves

Probable Ore Reserves

Proven Ore Reserves

Probable Ore Reserves

Tonnes

Grade

Gold

Content

Tonnes

Grade

Gold

Content

Tonnes

Grade

Gold

Content Tonnes

Grade

Gold

Content

(mill)

(g/tonne)

(tonnes)

(mill)

(g/tonne)

(tones)

(mill)

(g/tonne) (tonnes)

(mill)

(g/tonne) (tonnes)

South African Operations:

Blyvoor

Underground ..................................................... 10.30

7.36

75.87

2.76

7.51

20.70

12.16

7.02

85.35

3.99

7.01

27.97

Surface ..............................................................

9.71

0.73

7.08

12.87

0.59

7.56

Total Blyvoor................................................. 20.01

4.15

82.95

2.76

7.51

20.70

25.03

3.71

92.91

3.99

7.01

27.97

ERPM

Underground ......................................................

0.53

7.61

4.02

2.03

6.93

14.08

0.46

9.97

4.56

0.52

8.03

4.20

Surface ................................................................

9.24

0.62

5.76

9.74

0.64

6.23

Total ERPM....................................................... 9.77

1.00

9.78

2.03

6.93

14.08

10.20

1.06

10.79

0.52

8.03

4.20

Crown

Surface ................................................................

8.37

0.46

3.81

14.49

0.49

7.07

10.21

0.63

6.39

8.08

0.64

5.18

Total Crown...................................................... 8.37

0.46

3.81

14.49

0.49

7.07

10.21

0.63

6.39

8.08

0.64

5.18

Ergo Joint Venture

Surface ...............................................................

5.29

0.36

1.91

Total Ergo Joint Venture

................................

5.29

0.36

1.91

Australasian Operations:

Tolukuma

Underground .....................................................

0.16

20.58

3.35

Surface ..............................................................

Total Tolukuma...............................................

0.16

20.58

3.35

Total Group

Underground ...................................................... 10.83

7.38

79.89

4.79

7.27

34.78

12.62

7.13

89.91

4.67

7.60

35.52

Surface ............................................................... 32.61

0.57

18.56

14.49

0.49

7.07

32.82

0.61

20.18

8.08

0.64

5.18

Total

...............................................................

43.44

2.27

98.45

19.28

2.17

41.85

45.44

2.42

110.09

12.75

3.19

40.70

Proven and Probable Ore reserves for fiscal 2008 reflect our attributable 74% interest in Blyvoor, ERPM and Crown.

Proven and Probable Ore reserves for fiscal 2008 reflect our attributable 37% interest in the Ergo Joint Venture.

Proven and Probable Ore reserves for fiscal 2007 reflect our attributable 79% interest in Tolukuma. On October 22, 2007, we sold our entire shareholding in Emperor.

The Ore reserves listed in the above table are estimates of what can be legally and economically recovered from operations, and, as stated, are estimates of mill delivered in tons.

The measurement and classification of our Proven and Probable Ore Reserves are sensitive to the fluctuation of the gold

price. If we had used different gold prices than the three-year average prices at the time of reserve determination as of June 30, 2008,

2007 and 2006 respectively, we would have had significantly different reserves as of those dates. Using the same methodology and

assumptions as were used to estimate Ore Reserves but with different gold prices, our attributable ore reserves as of June 30, 2008,

2007 and 2006 would be as follows:

Year ending June 30, 2008

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

Rand gold price per kilogram.....................................................

150,622

208,287

187,458

229,115

Dollar gold price per ounce........................................................

664

853

768

938

Attributable ore reserves (million ounces) ................................

4.5

7.9

7.4

8.4

Year ending June 30, 2007

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

Rand gold price per kilogram....................................................

115,314

154,437

138,994

169,881

Dollar gold price per ounce.......................................................

553

660

594

726

Attributable ore reserves (million ounces) ................................

4.8

6.3

5.9

6.8

Year ending June 30, 2006

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

Rand gold price per kilogram.....................................................

93,800

117,055

105,300

127,700

Dollar gold price per ounce........................................................

453

582

524

640

Attributable ore reserves (million ounces) ................................

7.5

8.8

8.2

9.5

The approximate mining recovery factors for the 2008 ore reserves shown in the above table are as follows:

Underground

Surface

Mine

Dilution

(Sundries,

Shortfall and

Development)

(%)

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

Blyvoor .........................

22.8

86.8

94.7

100.0

50.3

Crown ............................ Not applicable

Not applicable

100.0

64.0

ERPM ............................

21.0

85.0

94.0

100.0

66.0

Ergo Joint Venture .........

Not applicable

100.0

49.3

The approximate mining recovery factors for the 2007 ore reserves shown in the above table are as follows:

Underground

Surface

Mine

Dilution

(Sundries,

Shortfall and

Development)

(%)

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

Blyvoor ............................

22.0

83.8

95.8

100.0

48.0

Crown ............................... Not applicable

Not applicable

100.0

64.0

ERPM ..............................

21.0

87.0

94.0

100.0

66.0

Tolukuma .........................

29.5

79.7

92.0

95.0

91.0

The following table shows the average drill/sample spacing (rounded to the nearest foot), as at June 30, 2008, for each

category of Ore Reserves at our mines calculated based on a three year average Dollar price of gold.

Mine

Proven

Reserves

Probable

Reserves

Blyvoor...................................................................................................................

16 ft. by 24 ft.

Nil

Crown.....................................................................................................................

328 ft. by 328 ft.

ERPM.....................................................................................................................

16 ft. by 19 ft.

Nil

Ergo Joint Venture ................................................................................................

328 ft. by 328 ft.

The pay-limit grades based on the three year average Dollar price for gold and costs used to determine reserves as of June

30, 2008 are as follows:

Underground

Surface

Mine

Pay-limit grade

(g/t)

Costs used to

determine pay-

limit grade

(R/t)

Pay-limit grade

(g/t)

Costs used to

determine pay-

limit grade (R/t)

Blyvoor ................................................................................

11.13

1,059.72

0.27

20.13

Crown ..................................................................................

0.47

45.47

ERPM ..................................................................................

10.33

999.45

0.54

53.99

Ergo Joint Venture ................................................................

0.23

23.10

The pay-limit grades and costs used to determine reserves as of June 30, 2007 are as follows:

Underground

Surface

Mine

Pay-limit grade

(g/t)

Costs used to

determine pay-

limit grade

(R/t)

Pay-limit grade

(g/t)

Costs used to

determine pay-

limit grade (R/t)

Blyvoor .................................................................

10.99

800.81

0.27

15.08

Crown ...................................................................

0.59

43.44

ERPM ...................................................................

13.04

988.64

0.63

53.99

Tolukuma................................................................

11.0

1,617.01

We apply the pay-limit approach to the mineralized material database of our various shafts or business units in order to

determine the tonnage and grade available for mining.

Governmental regulations and their effects on our business

South Africa

Common Law Mineral Rights and Statutory Mining Rights

Prior to the introduction of the MPRD Act in 2002, private ownership in mineral rights and statutory mining rights in South
Africa could be acquired through the common law or by statute. Under the old regime, the term freehold title refers to a right of
ownership of land and the surface thereof and the term “mining title” refers to a right of ownership of the minerals below the surface
or the right to mine such minerals. With effect from May 1, 2004, all minerals have been placed under the custodianship of the South
African government under the provisions of the MPRD Act, and old order proprietary rights, need to be converted to new order rights
of use within certain prescribed periods, as dealt with in more detail below.

Old Order Rights - Mining Authorizations

Mining authorizations issued under the previous regime remain valid until May 1, 2009. No person or mining entity may

prospect or mine for minerals without being granted a prospecting or mining authorization. Prior to granting a prospecting or mining

authorization, two requirements had to be fulfilled. First, the mining entity must either be the registered holder of the mineral rights or

have obtained the written consent of the registered holder of the mineral rights to mine the minerals concerned for its own account.

Second, the Department of Minerals and Energy, or the DME, must be satisfied with the scale, manner and duration of the intended

prospecting or mining operations and must approve an Environmental Management Program, or EMP. A prospecting permit was

issued for a limited period but could be renewed on application. A mining license was generally issued until such time that the

minerals could no longer be mined in an economically viable manner. The rights enjoyed under these authorities will endure until

they are converted within the period of time prescribed in the MPRD Act. Thereafter, such rights will lapse.

Conversion of Rights under the Mineral and Petroleum Resources Development Act, 2002

Existing common law prospecting, mining and mineral rights, or old order rights, need to be converted into new order rights
in order to ensure exclusive access to the mineral for which rights existed at the time of the enactment of the MPRD Act.

In respect of used old order mining rights, the DME is obliged to convert the rights if the applicant complies with certain
statutory criteria. These include the submission of a mining works program, demonstrable technical and financial capability to give
effect to the program, provision for environmental management and rehabilitation, and compliance with certain black economic
empowerment and the social and labor plan. These applications had to be submitted within five years after the promulgation of the
MPRD Act on May 1, 2004. Similar procedures apply where we hold prospecting rights and a prospecting permit and conduct
prospecting operations. Where we hold unused old order rights however, the application for conversion to mining or prospecting
rights had to be submitted within one year from May 1, 2004. The requirements for unused old order rights are more stringent than
for used old order rights, particularly insofar as the percentage of ownership from historically disadvantaged groups is concerned.
Under the MRPD Act, mining rights are not perpetual, but endure for a maximum of thirty years, after which they may be renewed
for a further thirty years. Prospecting rights are limited to five years, with one renewal of three years. Applications for conversion of
our mining rights have been submitted to the DME.

If any of our applications for conversion are refused, a claim for compensation, based on expropriation may be lodged
against the State. The DME may attach specific conditions and limitations to the exercise of new order rights. It may, for example,
reduce the area over which the new order right applies, if it is of the view that the prospecting or mining works programs submitted
by an applicant do not justify the extent of the area covered by the old order right. They may also be suspended or cancelled by the
Minister of Minerals and Energy in the event of a breach or, in the case of mining rights, of non-optimal mining in accordance with
the mining works program.

Mining royalties

Royalties from mining activities will become payable to the state, as from May 1, 2009, under provisions contained in the

Mineral and Petroleum Resources Royalty Bill, or the Royalty Bill. The Royalty Bill was promulgated by government on

August 14, 2008. The most significant feature of the Royalty Bill is that the royalty is to be determined in accordance with a

formula based system and no longer to be a predetermined specific rate for the different types of minerals. The royalty will be

deductible for normal income tax purposes.

The Royalty Bill defines the tax base as gross sales excluding the transportation and handling costs of the final product.

The final product can be either the “refined” or “unrefined” mineral depending on the nature of the mineral in question. There has

been general consensus that a formula derived mineral royalty rate regime is more equitable and provides the necessary relief for

mines during times of difficulties, e.g. low commodity prices and mines that become marginal due to low grades. The formula-

based mineral royalty rate regime also ensures that the State shares in the benefits of higher commodity prices. The State will thus

share in the downside risks, when mines become marginal, and in the upside benefits during times of high commodity prices.

Based on the comments received the formulae were adjusted to take into account the capital intensive nature of certain mining

operations, especially Gold mining and Oil and Gas. The final formulae will thus use earnings before income tax, or EBIT, with

100 percent capital expensing. Given that a distinction will be drawn between refined and unrefined minerals, it is expected that

two royalty percentage rate formulae will be required.

The mineral royalty percentage rates (Y%) will be based on the following formulae:

or refined minerals: Y (%) = 0.5 + [(EBIT divided by (Gross Sales multiplied by 12.5)) multiplied by 100]. This rate

will be capped at a maximum of 5.0%.

For unrefined minerals: Y (%) = 0.5 + [(EBIT divided by (Gross Sales multiplied by 9.0)) multiplied by 100]. This rate

will be capped at a maximum of 7.0%.

For the purpose of calculating the royalty percentage rates a negative EBIT will be set equal to zero.

For illustrative purposes, based on the latest available financial statistics for the mining sector published by Statistics

South Africa the average estimated royalty percentage rate for refined minerals would have been only 1.56% in 2006. Due to

higher commodity prices this rate would have increased to 2.55% in 2007. For unrefined minerals, the average estimated royalty

rates would have been 1.97% and 3.4% for 2006 ad 2007 respectively.

The Broad Based Socio-Economic Empowerment Charter

In order to promote broader based participation in mining revenue, the MPRD Act provides for a Mining Charter to be

developed by the Minister within six months of commencement of the MPRD Act, beginning May 1, 2004. The Mining Charter

came into effect in August 2004. In its current format its objectives include:

• increased direct and indirect ownership of mining entities;

• expansion of opportunities for persons disadvantaged by unfair discrimination under the previous political dispensation;

• expansion of the skills base of such persons, the promotion of employment and advancement of the social and economic

welfare of mining communities; and

• promotion of beneficiation.

The Mining Charter sets certain numerical and timeframe goals on equity participation by historically disadvantaged South

Africans of South African mining assets. It recommends that these are achieved by, among other methods, disposal of assets by

mining companies to historically disadvantaged persons on a willing seller, willing buyer basis at fair market value. The goals set by

the Mining Charter require each mining company to achieve 15 percent ownership by historically disadvantaged South Africans of its

South African mining assets within five years and 26 percent ownership within ten years from May 1, 2004. It also sets out guidelines

and goals in respect of employment equity at management level with a view to achieving 40 percent participation by historically

disadvantaged persons in management and ten percent participation by women in the mining industry, each within five years from

May 1, 2004. Compliance with these objectives is measured on the weighted average “scorecard” approach in accordance with a

scorecard which was first published by the government in February 2003.

We are unable to identify any permits, rights or investments which we may lose as a result of any non-compliance. The
provisions of the Mining Charter apply to each mining company individually. As transactions, to comply with the Mining Charter,
are to be at fair market value, we do not anticipate incurring any loss in fulfilling our obligations provided that we are able to identify
suitable partners that are able to obtain adequate funding.

We have achieved our commitment to compliance with the MPRD Act by extending our existing black economic

empowerment structure with Khumo Gold. The new structure resulted in Khumo Gold acquiring, as a first step, a 15% interest in a

newly created vehicle, DRDGOLD SA, which holds 100% of ERPM, Crown and Blyvoor. Khumo Gold acquired an additional 5%

interest in DRDGOLD SA with the employee trust acquiring 6% in fiscal 2007. (See Item 4A.: “History and Development of the

Company”).

ine Health and Safety Regulation

The South African Mine Health and Safety Act, 1996 (as amended), or the Mine Health and Safety Act, came into effect in

January 1997. The principal object of the Mine Health and Safety Act is to improve health and safety at South African mines and to

this end, imposes various duties on us at our mines, and grants the authorities broad powers to, among other things, close unsafe

mines and order corrective action relating to health and safety matters. In the event of any future accidents at any of our mines,

regulatory authorities could take steps which could increase our costs and/or reduce our production capacity. There are amendments

to the act currently before parliament to ratify the stopping of production and increase punitive measures including increased financial

fines and legal liability of mine management. Four of the more important new provisions in the bill as approved by the Portfolio

Committee are a new section 50(7A) that obliges an inspector to impose a prohibition on the further functioning of a site where a

person’s death, serious injury or illness to a person, or a health threatening occurrence has occurred; a new section 86A(1) creating

a new offence for any person who contravenes or fails to comply with the provisions of the Mine Health and Safety Act thereby

causing a person’s death or serious injury or illness to a person. Subsection (3) further provides that (a) the “fact that the person

issued instructions prohibiting the performance or an omission is not in itself sufficient proof that all reasonable steps were taken

to prevent the performance or omission”; and that (b) “the defense of ignorance or mistake by any person accused cannot be

permitted”; or that (c) “the defense that the death of a person, injury, illness or endangerment was caused by the performance or an

omission of any individual within the employ of the employer may not be admitted”; a new section 86A(2) creating an offence of

vicarious liability for the employer where a Chief Executive Officer, manager, agent or employee of the employer committed an

offence and the employer either connived at or permitted the performance or an omission by the Chief Executive Officer,

manager, agent or employee concerned; or did not take all reasonable steps to prevent the performance or an omission. The

maximum fines have also been increased. Any owner convicted in terms of section 86 or 86A may be sentenced to “withdrawal or

suspension of the permit” or to a fine of R3 million or a period of imprisonment not exceeding five years or to both such fine and

imprisonment, while the maximum fine for other offences and for administrative fines have all been increased, with the highest

being R1 million.

Under the South African Compensation for Occupational Injuries and Diseases Act, 1993 (as amended), or COID Act,

employers are required to contribute to a fund specifically created for the purpose of compensating employees or their dependants for

disability or death arising in the course of their work. Employees who are incapacitated in the course of their work have no claim for

compensation directly from the employer and must claim compensation from the COID Act fund. Employees are entitled to

compensation without having to prove that the injury or disease was caused by negligence on the part of the employer, although if

negligence is involved, increased compensation may be payable by this fund. The COID Act relieves employers from the prospect of

costly damages, but does not relieve employers from liability for negligent acts caused to third parties outside the scope of

employment. In fiscal 2008, we contributed approximately R9.8 million under the COID Act to a multi-employer industry fund

administered by Rand Mutual Assurance Limited.

Under the Occupational Diseases in Mines and Works Act, 1973 (as amended), or the Occupational Diseases Act, the multi-

employer fund pays compensation to employees of mines performing “risk work,” usually in circumstances where the employee is

exposed to dust, gases, vapors, chemical substances or other working conditions which are potentially harmful, or if the employee

contracts a “compensatable disease,” which includes pneumoconiosis, tuberculosis, or a permanent obstruction of the airways. No

employee is entitled to benefits under the Occupational Diseases Act for any disease for which compensation has been received or is

still to be received under the COID Act. Currently the Group is compliant with these payment requirements, which are based on a

combination of the employee costs and claims made during the fiscal year.

Uranium and radon are often encountered during the ordinary course of gold mining operations in South Africa, and present

potential risks for radiation exposure of workers at those operations and the public to radiation in the nearby vicinity. We monitor our

uranium and radon emissions and believe that we are currently in compliance with all local laws and regulations pertaining to

uranium and radon management and that we are within the current legislative exposure limits prescribed for workers and the public,

under the Nuclear Energy Act, 1999 (as amended) and Regulations from the National Nuclear Regulator.

nvironmental Regulation

Managing the impact of mining on the environment is extensively regulated by statute in South Africa. Recent statutory

enactments set compliance standards both generally, in the case of the National Environmental Management Act, and in respect of

specific areas of environment impact, as in the case of the Air Quality Act 2004, the National Water Act (managing effluent), and the

Nuclear Regulator Act 1999. Liability for environmental damage is also extended beyond the corporate veil to impose personal

liability on managers and directors of mining corporations that are found to have violated applicable laws.

The impact on the environment by mining operations is extensively regulated by in the MPRD Act. The MPRD Act has

onerous provisions for personal liability of directors of companies whose mining operations have an unacceptable impact on the

environment.

Under the MPRD Act, new order mining rights are not issued unless a complete environmental impact assessment is
conducted and all potentially affected parties have been given an opportunity to comment on the proposed mining. Mining companies
are also required to demonstrate both the technical and financial ability to sustain an ongoing environmental management program, or
EMP, and achieve ultimate rehabilitation, the particulars of which are to be incorporated in an EMP. This program is required to be
submitted and approved by the DME as a prerequisite for the issue of a new order mining right. Various funding mechanisms are in
place, including trust funds and concurrent rehabilitation budgets, to fund the rehabilitation liability.

The MPRD Act imposes specific, ongoing environmental monitoring and financial reporting obligations on the holders of
mining rights.

Because of the diverse nature of our operations, ranging from underground mining to surface reclamation activities,
environmental risks vary from site to site. These risks have been addressed in EMPs which have been submitted to the DME for
approval. In November 2006, amended EMPs to conform to the required format of the MPRD Act were submitted for all operations
in South Africa for approval. Additionally, the key environmental issues have been prioritized and are being addressed through active
management input and support as well as progress measured in terms of activity schedules and timescales determined for each
activity. Two environmental compliance assessments have been conducted at Blyvoor and Crown, which both show that these mines
are in substantial compliance with the conditions of their EMPs.

Our existing reporting and controls framework is consistent with the additional reporting and assessment requirements of the
MPRD Act.

Financial Provision for Rehabilitation

We are required to make financial provision for the cost of mine closure and post-closure rehabilitation, including
monitoring once the mining operations cease. We have funded these environmental rehabilitation costs by making contributions over
the life of the mine to environmental trust funds established for each operation. Funds are irrevocably contributed to trusts that
function under the authority of trustees that have been appointed by, and who owe a statutory duty of trust, to the Master of the High
Court of South Africa. The funds held in these trusts are invested primarily in interest bearing debt securities. As of June 30, 2008, we
held a total of R110.8 million (2007: R75.8 million) in trust, the balance held in each fund being R15.7 million (2007: R14.2 million)
for West Wits, R26.9 million (2007: R24.3 million) for Blyvoor, R18.2 million (2007: R16.4 million) for Durban Deep,
R37.2 million (2007: R11.9 million) for Crown and R12.8 million (2007: R9.0 million) for ERPM. Trustee meetings are held as
required, and quarterly reports on the financial status of the funds, are submitted to our board of directors.

The financial provisions for West Wits and Durban Deep have been consolidated into a single fund. We address shortfalls in
the funds by accruing trust investment income for the benefit of the funds and by replenishing it with the proceeds from the sale of
redundant mining equipment at the end of the life of the mine. If any of the operations are prematurely closed, the rehabilitation funds
may be insufficient to meet all the rehabilitation obligations of those operations.

Whereas the old Minerals Act allowed for the establishment of a fully funded rehabilitation fund over the life of mine, the
MPRD Act assumes a fully compliant fund at any given time in the production life of a mine. The DME appears to have taken a
practical approach in dealing with this change, and has indicated that the traditional ring fencing of funds may, for investment
purposes be relaxed, and that insurance instruments may also be received subject to the DME’s consent, to make up the shortfall in
available cash funds.

The aggregate group rehabilitation, reclamation and closure cost provision was R381.3 million at June 30, 2008, compared
to R282.6 million at June 30, 2007.

4C. ORGANIZATIONAL STRUCTURE

The following chart shows our principal subsidiaries and joint venture as of October 31, 2008. All of our subsidiaries are

incorporated in South Africa unless otherwise indicated. We hold the majority of the investments directly or indirectly as indicated

below. Refer to Exhibit 8.1 for a list of our directly held subsidiaries.

100%

50%

74%

100%

65%

100%

All shafts at Durban Deep have been closed.

West Wits will be used going forward to extract and dispose of underground water.

DRDGOLD South African

Operations (Pty) Limited

DRDGOLD Limited

West Witswatersrand Gold

Holdings Limited

Durban Deep

Crown Gold Recoveried (Pty)

Limited

East Rand Proprietary Mines

Limited

Blyvooruitzicht Gold Mining

Company Limited

West Witwatersrand Gold Mines

Limited

Elsburg Gold Mining Joint

Venture

ERGO Mining (Pty) Limited

4D. PROPERTY, PLANTS AND EQUIPMENT

DRDGOLD OPERATIONS
OCTOBER 31, 2008

Description of Significant Subsidiaries, Properties and Mining Operations

Witwatersrand Basin Geology

Blyvoor is predominantly an underground operating mine located within a geographical region known as the Witwatersrand
Basin, exploiting gold bearing reefs in addition to certain surface sources. Crown and ERPM are also located within the
Witwatersrand Basin. Crown exploits various surface sources, including sand and slime tailings deposited as part of historical mining
operations. ERPM is predominantly an underground mining operation with a surface operation for the processing of sand from the
Cason Dump. Our underground operations are typical of the many gold mining operations in the area which together have produced
approximately 1.5 billion ounces of gold over a period of more than 100 years.

The Witwatersrand Basin comprises a 4 mile (6 kilometers) vertical thickness of sedimentary rocks situated within the
Kaapvaal Craton, extending laterally for approximately 186 miles (299 kilometers) east-northeast and 62 miles (100 kilometers)
south-southeast. The sedimentary rocks generally dip at shallow angles towards the center of the basin though locally this may vary.

The Witwatersrand Basin is Achaean in age and the sedimentary rocks are considered to be approximately 2.7 to 2.8 billion years old.

Gold mineralization in the Witwatersrand Basin occurs within horizons termed reefs. These occur within seven separate
goldfields located along the eastern, northern and western margins of the basin. These goldfields are known as the Evander Goldfield,
the East Rand Goldfield, the West Rand Goldfield, the Far West Rand Goldfield, the Central Rand Goldfield, the Klerksdorp
Goldfield and the Free State Goldfield. As a result of faulting and other primary controls of mineralization, the goldfields are not
continuous and are characterized by the presence or dominance of different reef units. The reefs are generally less than 6 feet (2
meters) thick but, in certain instances, these deposits form stacked elastic wedges which are hundreds of feet thick.

The gold generally occurs in native form within the various reefs, often associated with pyrite and carbon.

Blyvoor

Overview

We own 74% of the Blyvooruitzicht Gold Mining Company Limited, (through our 74% holding in DRDGOLD SA), which

in turn owns 100% of the Doornfontein Gold Mining Company Limited. The consolidated mining operation, referred to as Blyvoor,

consists of the adjacent mines of Blyvooruitzicht and Doornfontein which are located within the Far West Rand Goldfields on the

northwestern edge of the Witwatersrand Basin. Blyvoor was the first mine in the “West Wits” line. Together, these two operations

have produced over 37 million ounces of gold since inception.

At June 30, 2008, Blyvoor had 4,511 employees, including contractors.

Property

Blyvoor is located on the West Wits line within the Far West Rand Goldfields on the northwestern rim of the Witwatersrand
Basin, near the town of Carletonville, Gauteng Province, about 50.0 miles (80.5 kilometers) south-west of Johannesburg and is
reached via the R528 road to Carletonville on the N12 Johannesburg-Potchefstroom-Kimberly highway.

The climate of the Highveld area (at an elevation of 5,249 feet (1,600 meters) above mean sea level), where the mine is
situated, is humid continental with warm summers and cold winters. Temperatures range from a minimum of 23 degrees
Fahrenheit (-5 degrees Celsius) in June and July to a maximum of 93 degrees Fahrenheit (34 degrees Celsius) in December and
January.

The operating facilities are all situated on property belonging to Blyvoor, and include the shaft complexes, administrative
offices for the managerial, administrative, financial and technical disciplines, extensive workshops and consumable stores, the
metallurgical plants, tailings dams and waste rock dumps. Blyvoor also houses the majority of its employees in Blyvoor-owned
houses on the property and in the town of Carletonville. The normal support structures, including training, security, sport and
recreational facilities, schools and churches are situated on the property. Blyvoor has mining title to 16,242 acres (6,573 hectares) and
owns 5,138 acres (2,079 hectares) of freehold property.

Blyvoor consists of one mining license, ML46/99, in respect of statutory mining rights and mineral rights held by Blyvoor.
We are in the process of converting these old order property rights to new order rights under the MPRD Act. The net book value of
the mining assets at Blyvoor is R432.7 million at June 30, 2008, with 3.3 million attributable ounces of Ore Reserves.

History

937

Blyvooruitzicht Gold Mining Company Limited was incorporated and registered as a public company in South Africa

on June 10, 1937.

1942

Gold production commenced.

1995

Blyvoor acquired the Doornfontein Gold Mining Company Limited in November 1995.

1996

Blyvoor acquired the mineral rights representing the Western Deep Levels tribute area.

1997

We acquired the entire share capital of Blyvoor on September 15, 1997.

2001

Implementation of the Blyvoor expansion project.

2003

Commissioning of No. 4 and 5 Slimes Dam retreatment facility at a cost of R48.0 million.

2004

On June 28, 2004, we entered into a 60-day review period on Blyvoor. The 60-day review was extended to September 13,

2004. By October 5, 2004, 1,619 employees had been retrenched at a cost of approximately R19.0 million.

2005

In August 2005, our Board of Directors approved No. 2 Sub-Shaft Project (now called the WAP Project) and the Slimes

Dam Project to establish mining operations from the No. 2 Shaft and expansion to further improve plant efficiency,

respectively.
On July 6, 2005, we signed a Memorandum of Understanding with KBH regarding the acquisition by Khumo Gold of a

15% stake in our South African Operations.
On October 27, 2005, our Board of Directors approved the transaction with Khumo Gold. The new structure resulted in

Khumo Gold acquiring a 15% interest in a newly created vehicle, DRDGOLD SA, which owns ERPM, Crown and

Blyvoor. We owned an 85% interest in DRDGOLD SA.

2006

On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us

pursuant to the option agreement concluded between us and Khumo Gold in October 2005 to acquire a further 11% in

DRDGOLD SA.

2007

After completion of a drilling program to define the uranium resource in Blyvoor’s slimes dam material, a 17.5 million

pound uranium and 0.8 million ton sulphur resource was declared in November 2007.

2008

In January 2008, electricity supply to the mine was interrupted by Eskom which is government owned and production

suspended for a week due to safety concerns.

Geology and Mineralization

Blyvoor exploits the two gold-bearing pebble horizons in the Central Rand Goldfields, the Carbon Leader, which is one
of the principal ore bodies in the goldfield, and the Middelvlei Reef horizons which occur in discrete channels over parts of the
lease area approximately 246 feet (75 meters) vertically above the Carbon Leader Reef horizon. The Carbon Leader Reef is the
principal economic horizon across the lease area and is a planar single sheet conglomerate. The Carbon Leader Reef typically
comprises basal carbon seam, overlain by a thin, small pebble conglomerate, enriched in carbon in the lower portion. The grade of
the Carbon Leader Reef is more variable than the Middelvlei Reef. The Middelvlei Reef consists of a variable number of
polymictic quartz conglomerate bands, interbedded with coarse grain quartzite. The grade of the Middelvlei Reef is more erratic,
with distinctive pay shoots forming as southward-orientated linear zones.

Blyvoor was established in 1937 to exploit the rich Carbon Leader Reef but by the late 1980s had reached a position where
continued existence of mining operations was dependent upon the mining of scattered Carbon Leader Reef remnants and limited
sections of the lower grade Middelvlei Reef.

Mining and Processing

Access from the surface to the current underground workings of the mines is through a system of vertical and incline shafts
situated at the Blyvoor and Doornfontein mines. Doornfontein was previously a separate mine adjacent to the Blyvoor mine but has
since been merged to form Blyvoor. The shaft system consists of four vertical shafts from the surface, thirteen sub-incline shafts and
two sub-vertical shafts underground. Of these thirteen sub-incline shafts, only nine are in operation and are used for the conveyance
of personnel, pumping and hoisting of mined ore and waste.

Two levels have been holed between the previous Doornfontein mine and workings within the Blyvoor lease extension
(purchased in 1996 from Western Deep Levels Limited) to allow ore from the bottom of the Blyvoor workings to be trammed across
and hoisted up via the Blyvoor No. 5 Shaft, from where it is trucked to the gold plant. The average mining depth at Blyvoor is 10,541
feet (3,213 meters), 5,292 feet (1,613 meters) below mean sea level.

Mining of the reef takes place in stope panels. Holes are drilled into the solid rock and are charged with explosives and
blasted. The loosened rock is removed from the stope panels and is conveyed to the shaft, tipped into the ore-pass systems, hoisted to
the surface and transported to the metallurgical plant for gold extraction.

Metallurgical processing facilities at Blyvoor are comprised of a single metallurgical plant. The process route is based on a
conventional flow sheet comprising multi-stage crushing, open circuit primary and closed circuit secondary milling with hydro
cyclones, thickening and cyanide leaching in a Carbon-in-Pulp, or CIP, carousel arrangement. The gold is recovered through
electrowinning followed by smelting to doré. The circuit was recently modified by the closure of the filtration system and the
commissioning of a modern carbon Kemix pumpcell plant. As at June 30, 2008, the overall plant utilization was 95%.

In fiscal 2005, mining of the lower grade Main Reef at No. 6 Shaft was cut by 50% in favor of increased mining of the

higher grade Carbon Leader Reef at No. 5 Shaft. Accelerated development, however, has ensured that the mine was well positioned

to restore Main Reef mining to appropriate levels at No. 5 and No. 6 Shafts in response to gold price fluctuations.

In fiscal 2006, increasing levels of seismicity were experienced in the high-grade No. 5 Shaft area in the first half of the

year. Consequently concerns for employee safety prompted the development of a volume-driven mine plan involving less mining

from the affected high-grade No. 5 Shaft and more from the lower-grade No. 6 Shaft areas. By the end of fiscal 2006, implementation

of the new plan was under way with ore milled of 70,000 tons per month targeted. In August 2005, our board of directors approved a

project to re-establish mining operations from the No. 2 Sub-Shaft in three phases at a total capital cost of R80.5 million. In total, the

No. 2 Sub-Shaft Project was expected to yield some 770,491 ounces of gold from 2.4 million tons of ore with an average delivered

grade of 8.18 g/t, over a 20 year period. This project has been re-designed in two phases now called the Way-Ahead Project, or WAP

Project.

In fiscal 2007, good progress was made on Blyvoor’s WAP Project, which replaced the No. 2 Sub-Shaft Project. The WAP

Project involves accessing the No. 2 sub-shaft reserves from levels 27 to 35 of No. 5 shaft. The cost of the project is estimated at

R36.7 million of which R24.9 million has already been spend as at June 30, 2008 and started production in October 2008.

Electricity for South Africa is provided by Eskom, which is government owned. Eskom is the largest producer of electricity

in Africa. In South Africa, Eskom operates a national power supply grid consisting of 24 power stations across the country.

Electricity to Blyvoor is provided from the West Wits substation outside Carletonville at 44,000 volts. Further substations, located on

mine site, transform the power to 6,600 volts or 22,000 volts for direct supply to the shaft winder and air compressors. The power

supply is further reduced to 525 volts for smaller devices and equipment used on the mine. The average annual power consumption is

about 432 GWHr and the maximum demand is about 66 MW.

In fiscal 2008, electricity supply to the mine was interrupted by Eskom and production suspended for a week due to safety

concerns. The situation did improve during March 2008, however the operation is still on a six hour standby notice in the event that

power supply becomes unstable in the area. Eskom has requested all of its “Key Customers” to reduce power consumption by 10%.

Blyvoor has managed to adhere to this request and will continue to save the maximum amount of energy possible.

Several capital expansion projects were conducted over the period fiscal 2007 to fiscal 2008, including the WAP project

(R14.3 million) and a residue pipeline project (R1.0 million). During fiscal 2008 an additional amount was spent on risk prevention to

specifically address the following areas: a surface compressed air ring feed (R4.5 million) and an improved ore transfer system (R5.7

million) In addition, approximately R31.1 million was spent on opening-up and development at Blyvoor.

Exploration and Development

At the beginning of fiscal 2003, Blyvoor began a feasibility study looking at the opportunity to re-mine and treat the slimes

dam material from the No. 4 and 5 Slimes Dam Project. The project was commissioned during November 2003 and completed at a

cost of R48.0 million including the conversion of leaching tanks, linear screens, pipes and site construction. The No. 6 Slimes Dam

has been extended to provide additional capacity for the tailings from this project at a cost of R2.0 million. The project involves the

reclamation of approximately 24 million tonnes of slime material at a rate of 240,000 tpm by high water monitoring and processed

through a CIP circuit. The project has an estimated life until 2016 and an average recovery grade of 0.02 ounces per ton. The project

costs were funded from the R65.0 million loan facility from the IDC. This facility is described in more detail in note 20 to the

consolidated financial statements. Refer Item 18: “Financial Statements.”

In November 2007 encouraging results had been obtained from a drilling program to define the uranium resource in
Blyvoor’s slimes dam material and a 17.5 million pound uranium and 0.8 million ton sulphur resource was declared. For fiscal 2009,
an exploration drilling program linked to opening up and development has been scheduled to evaluate the south-west down-dip
extension of the Blyvoor ore body south of the Boulder Dyke. If encouraging results are obtained, various mining options will be
investigated to exploit the ore body, including the possibility of a trackless decline.

Environmental and Closure Aspects

The predominantly dolomitic geology of the area in and around Blyvoor, and the resultant occasional occurrence of
sinkholes and subsidences, exposes Blyvoor to relatively unique environmental risks and costs associated with the remediation and
filling of these sinkholes.

Blyvoor has to maintain a rate of pumping of fissure water sufficient to keep the rate of rise of underground water below the
level of underground workings. The required rate is in the order of 2 million gallons (8 million liters) per day. Water not used in the
operations is discharged into the Wonderfonteinspruit (a stream adjacent to the Blyvoor mine). In order to address the risk of
contamination of ground water, streams and wetlands, water is sampled and the level of contaminants monitored in accordance with
Blyvoor’s water management plan. Fissure water at Blyvoor is generally of a good quality, therefore we believe that the contribution
of this water to pollution of water in the area is minimal.

Blyvoor is a member of the Mining Interest Group consisting of all mines operating in the Wonderfonteinspruitcatchment area.
This group was formed to coordinate efforts and studies in the Wonderfonteinspruit and to liaise with government
departments to determine what action if any is required in cleaning the stream. The government has also established a specialist
task team to determine what needs to be done. At this stage there is no clear solution. The Mining Interest Group is also
represented on the various catchment forums where NGO’s and other interested and affected parties are present. Blyvoor
continues to meet with the Pothchefstroom municipality on a monthly basis where the quality of Blyvoor’s discharge water is
assessed. Blyvoor remains in compliance with the Potchefstroom agreement.

Sinkholes are caused by ground water seeping into the underground dolomitic structures, which dissolve and weaken
causing a collapse in the rock structure. Dolomitic rock could be dissolved, resulting in an increased risk of sinkholes and possible
pollution of fresh water resources stored in the dolomitic formations. The occurrence of sinkholes is limited to a particular area of
Blyvoor, which requires an active program in water management and control. Water from leaking pipes is reported to a monitoring
committee and the necessary repairs are undertaken promptly. Ground subsidence surveys are undertaken to timely identify any
possible sinkholes. Sinkholes that do occur are filled to prevent further inflow of surface water and potential enlargement of the hole.
Sinkholes which form outside of our property are repaired by the Far West Rand Dolomitic Water Association.

Pollution from slime dams is controlled by dust suppression and water management programs. Short-term dust control is
accomplished through ridge ploughing the top surface of dormant tailings dams. Environmentally friendly dust suppressants, such as
molasses, are also applied when deemed necessary. In the long-term, dust suppression and water pollution is managed through a
program of progressive vegetation of the tailings complexes followed by the application of lime, to neutralize the natural acidic
conditions, and fertilizer as the organic growth medium.

During 2004, Blyvoor implemented a tailings reclamation project and as a result of this new project being implemented
amendments to Blyvoor's EMP have had to be made by the relevant regulator. The EMP identified the impacts associated with the
reclamation of the dams and the extension of the No. 6 return water dam and identified remedial measures to minimize the risk.
The DWAF visited the site in August 2004 and was satisfied with our environmental performance.

Blyvoor has updated its EMP to meet the new requirements of the MPRD Act. The EMP has been submitted to the DME for
approval. Blyvoor is currently demolishing and rehabilitating redundant surface infrastructures, including the defunct uranium plant.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we have estimated that the total

cost for Blyvoor, in current monetary terms as at June 30, 2008, is R35.3 million. This has been included in the provision for

environmental rehabilitation, restoration and closure costs on our balance sheet. A total of R26.9 million has been contributed to a

Rehabilitation Trust Fund. This is an irrevocable trust, managed by specific responsible people who we nominated and who are

appointed as trustees by the Master of the High Court of South Africa.

Ore Reserves and Life of Mine

As at June 30, 2008, the attributable Proven and Probable Ore Reserves of Blyvoor were 3.3 million ounces. At

June 30, 2007, the attributable Proven and Probable Ore Reserves of Blyvoor were 3.9 million ounces. A Mineral Resource

competent person is appointed at each operation to review our Ore Reserve calculations for accuracy. For Blyvoor, Mr. David Edwin

James Whittaker (SACNASP) is the appointed Mineral Resource competent person.

As a result of the implementation of the WAP Project and the higher gold price, Blyvoor’s life-of-mine business plan

remains at 20 years, as at June 30, 2008.

Current Production

Blyvoor produced a total of 141,172 ounces of gold in fiscal 2008, with 103,813 ounces from underground areas and

37,359 ounces from surface areas. This represents 46% of our total production from continuing operations of 308,005 ounces.

Underground gold production has decreased from 110,471 ounces in fiscal 2007 to 103,813 ounces in fiscal 2008. Reduced

underground production reflects the implementation during fiscal 2007 of a new, “lower grade, higher volume” mine plan to address

safety concerns arising from increased levels of seismicity in the high-grade No. 5 Shaft area. Surface gold production decreased

from 40,798 ounces in fiscal 2007 to 37,359 ounces in fiscal 2008.

Cash costs of $675 per ounce in fiscal 2008 increased from $552 per ounce in fiscal 2007. Total costs for fiscal 2008 of

$761 per ounce also show an increase compared to $590 per ounce in fiscal 2007. The increase in both cash costs and total costs per

ounce of gold produced was primarily attributable to the lower production at Blyvoor in fiscal 2008.

The following table details the operating and production results from Blyvoor for the past three fiscal years.

Year ended June 30,

2008

2007

2006

Production

Surface Operations

Ore mined ('000 tons).................................................................................................................................

4,099

4,072

4,005

Recovered grade (oz/ton) ...........................................................................................................................

0.009

0.010

Gold produced (ounces) ............................................................................................................................. 37,359 40,798 39,515

Underground Operations

Ore mined ('000 tons).................................................................................................................................

757

761

742

Recovered grade (oz/ton) ...........................................................................................................................

0.137

0.145

0.162

Gold produced (ounces) ............................................................................................................................103,813 110,471 120,178

Total ounces produced ..............................................................................................................................141,172 151,269 159,693

Results of Operations (R)

Revenues ('000) ......................................................................................................................................... 848,229 694,611 538,842

Operating cost ('000) ................................................................................................................................. 697,281 602,871 495,779

Cash cost per ounce of gold ($)

................................................................................................................

675

552

483

Total cost per ounce of gold ($)

................................................................................................................

761

590

532

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating

capacities of the mines and to monitor performance of our mining operations.

Crown

Overview

We own 74% of DRDGOLD SA, which in turn owns 100% of Crown. Crown has a surface retreatment operation

consisting of the Crown Central, City Deep and Knights business units, collectively referred to as Crown. ERPM’s Cason Dump

surface re-treatment operation is expected to continue to operate until 2013 under the management of Crown based on the current

rate of production of approximately 178,000 tpm. Crown undertakes the retreatment of surface sources deposited as tailing from

non-operating mining sites across central Johannesburg.

At June 30, 2008, Crown had 1,179 employees, including contractors.

Property

Crown is situated on the outskirts of Johannesburg, South Africa and consists of three separate locations. It has mining
rights to 5,787 acres (2,342 hectares) and has the right to occupy 1,490 acres (603 hectares) of freehold property. Crown is in the
process of converting these old order rights to new order rights under the MPRD Act.

The Crown Central operation is located on the West Wits line within the Central Goldfields of the Witwatersrand Basin,

approximately 6 miles (10 kilometers) west of the Johannesburg central business district in the province of Gauteng. Access is via

Xavier Road on the M1 Johannesburg-Kimberley-Bloemfontein highway. The City Deep operation is located on the West Wits line

within the Central Goldfields of the Witwatersrand Basin, approximately 3 miles (5 kilometers) south-east of the Johannesburg

central business district in the province of Gauteng. Access is via the Heidelberg Road on the M2 Johannesburg-Germiston

motorway. The Knights operation is located at Stanley and Knights Road Germiston off the R29 Main Reef Road.

As of June 30, 2008, the net book value of Crown’s mining assets was R103.0 million with 0.4 million attributable ounces

of Ore Reserves.

History

979

Rand Mines Limited directors approved the formation of the company Rand Mines Milling and Mining Limited (RM3)

to treat the surface gold tailings created from the underground section of the original Crown Mines, which had been in

operation since the start of gold mining on the Witwatersrand in the late 1800's.

1982

First plant commissioned at Crown Mines to process surface material.

1986

Second plant commissioned at City Deep to process surface material.

1997

Randgold Exploration Limited and Continental Goldfields of Australia entered into a joint venture with the intention to

establish a company that would acquire dump retreatment operations on the Witwatersrand. This resulted in the

formation of Crown Consolidated Gold Recoveries Limited, or CCGR, which was incorporated as a public company in

South Africa in May 1997. Crown was a wholly owned subsidiary of CCGR and consists of the surface retreatment

operations of Crown Central, City Deep and Knights.

1998

We purchased 100% of CCGR.

2002

KBH purchased 60% of Crown. We were appointed as joint manager of the operation with KBH.

2005

On July 6, 2005 we signed a Memorandum of Understanding with KBH regarding the acquisition by Khumo Gold of a

15% stake in our South African Operations.
On October 27, 2005, our board of directors approved the transaction with Khumo Gold. The new structure resulted in

Khumo Gold acquiring a 15% interest in a newly created vehicle, DRDGOLD SA, which includes 100% of ERPM,

Crown and Blyvoor. We owned an 85% interest in DRDGOLD SA.

2006

On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us

pursuant to the option agreement concluded between us and Khumo Gold

in October 2005 to acquire a further 11% in

DRDGOLD SA.
On August 28, 2006, we concluded an agreement with Anglo Gold Ashanti to purchase the Top Star Dump.

2008

The Department of Minerals and Energy issued in favour of Crown a mining right for gold recovery over the Top Star

Dump.

Mining and Processing

Crown undertakes the re-treatment of surface sources deposited as tailings from non-operational mining sites across

central Johannesburg.

Material processed by Crown is sourced from numerous secondary surface sources namely, sand and slime. The surface

sources have generally undergone a complex depositional history resulting in grade variations associated with improvements in

plant recovery over the period of time the material was deposited. Archive material is a secondary source of gold bearing material.

This material is generally made up of old gold metallurgical plant sites as well as “river bed” material.

The three metallurgical plants, known as Crown Mines, City Deep and Knights, have an installed capacity to treat

approximately 11.0 million tons of material per year. Up to fiscal 2003, Crown also operated the West Wits gold plant for the

processing of sand and slime. Crown also operates the ERPM surface operations with ore being treated at the Knights plant. All of

the plants have undergone various modifications during recent years resulting in significant changes to the processing circuits.

Electricity to Crown is supplied to the Crown Central and City Deep business units from separate substations referred to

as Jupiter and No. 15 Shaft Crown Mines, and for the Knights by the Ekhurhuleni Town Council. Electricity is supplied directly

from the national power grid to the substation and town council at 44,000 volts. Substations, located on mine sites, transform the

power to 6,600 volts for direct supply to the plants. The power supply is further reduced to 525 volts for smaller devices and

equipment.

For Crown Central and City Deep, the average annual power consumption is about 72 GWHr and the maximum demand

is about 3.7 MW. For Knights the average annual power consumption is about 36 GWHr and the maximum demand is about

1.8 MW.

Crown operates three plants with slight variations in design in each plant, with a processing capacity of approximately

1 million tpm, yielding approximately 0.01 oz/t (0.4 g/t). The feed stock is made up of sand and slime which are reclaimed

separately. Sand is reclaimed using mechanical front-end loaders, re-pulped with water and pumped to the plant. Slime is

reclaimed using high pressure water monitoring guns. The re-pulped slime is pumped to the plant and the reclaimed material is

treated using screens, cyclones, ball mills and CIL technology to extract the gold. As at June 30, 2008, the overall plant utilization

was 95%.

City Deep Plant: Commissioned in 1987, this surface/underground plant is comprised of a circuit including screening,

primary, secondary and tertiary cycloning in closed circuit milling, thickening, oxygen preconditioning, CIL, elution and zinc

precipitation followed by calcining and smelting to doré. In 1998, the plant was converted to a slimes only operation. However, due

to operational difficulties caused by the particulate nature of the slimes, the milling circuit has subsequently been recommissioned to

facilitate the treatment of sand.

Crown Mines Plant: Commissioned in 1982, this surface/underground plant has already been modified and is comprised

of a circuit including screening, primary cycloning, open circuit milling, thickening, oxygen preconditioning, CIP and CIL, elution,

zinc precipitation followed by calcining and smelting to doré.

Knights Plant: Commissioned in 1988, this surface/underground plant is comprised of a circuit including screening,

primary cycloning, spiral pre-concentration, milling in closed circuit with hydrocyclones, thickening, oxygen preconditioning, CIL,

elution, electrowinning and smelting to doré.

Exploration and Development

Exploration and development activity at Crown involves the drilling of existing surface dumps and evaluating the potential

gold bearing surface material owned by third parties that could be processed on a full treatment basis or purchased outright by Crown.

On August 28, 2006, we concluded an agreement with Anglo Gold Ashanti to purchase the Top Star Dump. The Top Star

Dump has been evaluated geostatistically and has a probable reserve of 5.2Mt, at a grade of 0.775g/t. The Top Star Dump mining

right has been granted with effect from August 21, 2008 until August 20, 2013. We expect that Top Star will contribute

approximately 45,000 ounces of gold per annum for a period of 20 months.

Additional exploration drilling is being planned for the current fiscal year to define the uranium and sulphur potential of all
Crown’s current deposition sites.

Environmental and Closure Aspects

Crown operates at sites located in close proximity to significant municipal infrastructure, commercial and residential

development. The major environmental risks are associated with dust from various recovery sites, and effective management of

relocated process material on certain tailings dams. The impact of windblown dust on the surrounding environment and community is

addressed through a scientific monitoring and evaluation process, with active input from the University of Witwatersrand and

appropriate community involvement. Environmental management programs, addressing a wide range of environmental issues, have

been prepared by specialist environmental consultants and applied specifically to each dust sample recovery monitoring site and

integrated into Crown’s internal environmental assessment process. Although Crown completed a project for thickening re-processed

tailings, there also remains a risk of localized sloughing which can result in that section of the tailings dam being closed temporarily,

with repair work being done to the dam wall. Water pollution is controlled by means of a comprehensive system of return water dams

which allow for used water to be recycled for use in Crown’s metallurgical plant. Overflows of return water dams may, depending on

their location, pollute surrounding streams and wetlands. Crown has an ongoing monitoring program to ensure that its water balances

(in its reticulation system, on its tailings and its return water dams) are maintained at levels that are sensitive to that capacity of return

water dams.

Dust pollution is controlled through an active environmental management program for the residue disposal sites and

chemical and organic dust suppression on recovery sites. Short-term dust control is accomplished through ridge ploughing the top

surface of dormant tailings dams. Additionally, environmentally friendly dust suppressants, such as molasses, are applied. Dust fall-

out is also monitored. In the long-term, dust suppression and water pollution is managed through a program of progressive vegetation

of the tailings followed by the application of lime, to reduce the natural acidic conditions, and fertilizer to assist in the growth of

vegetation planted on the tailings dam.

A program of environmental restoration that provides for the rehabilitation of areas affected by mining operations during the

life of the mine is in place. The surface reclamation process at Crown has several environmental merits as it has removed a potential

pollution source and opens up land for development. Crown has conducted its environmental management program performance

assessment, which was submitted to and approved by the DME during fiscal 2005. Crown has updated its EMP in compliance with

the MPRD Act and submitted it to the DME for approval.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we estimate that the total cost for

Crown, in current monetary terms as at June 30, 2008, is approximately R154.4 million. A total of R37.2 million has been contributed

to the Crown Rehabilitation Trust Fund. This is an irrevocable trust, managed by specific responsible people who we nominated and

who are appointed as trustees by the Master of the High Court of South Africa.

Ore Reserves and Life of Mine

As at June 30, 2008, our 74% share of the Proven and Probable Ore Reserves of Crown was 0.4 million ounces. In fiscal

2007, our 74% share of Proven and Probable Ore Reserves of Crown was 0.4 million ounces. Crown’s Ore Reserves have not

changed from the previous year. A Mineral Resource competent person is appointed at each operation to review our Ore Reserve

calculations for accuracy. For Crown Surface, Mr. William John Laing (PLATO) is the appointed Mineral Resource competent

person. The current life-of-mine business plan is estimated to be nine years.

Current Production

Gold production for Crown was 87,354 ounces in fiscal 2008 compared to gold production of 103,011 ounces in fiscal 2007.

The decrease in gold production in fiscal 2008 was the result of a lower yields reflected in the ever-diminishing reserves of higher

yielding material available.

In fiscal 2008, cash costs increased to $567 per ounce of gold from $462 per ounce of gold in fiscal 2007, as a result of

lower gold production. Total cost per ounce of gold increased to $672 per ounce from $558 per ounce in fiscal 2007.

The following table details our attributable share of the production results from Crown for the past three fiscal years:

Year ended June 30,

2008

2007

2006

Production

Surface operations

Ore mined ('000 tons)............................................................................................................... 9,077

9,265

6,795

Recovered grade (oz/ton) ......................................................................................................... 0.010

0.011

0.012

Gold produced (ounces) ..........................................................................................................

87,354

103,011

75,959

Results of Operations (R)

Revenues (‘000) ....................................................................................................................... 528,625

472,842

206,546

Operating cost (‘000) ..............................................................................................................

362,237

343,476

176,894

Cash cost per ounce of gold ($)

..............................................................................................

567

462

491

Total cost per ounce of gold ($)................................................................................................

672

558

644

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating

capacities of the mines and to monitor performance of our mining operations.

ERPM

Overview

We own 74% of ERPM, which is consolidated as a subsidiary, through our 74% holding in DRDGOLD SA. ERPM consists

of an underground section and the Cason Dump surface retreatment operation. The Cason Dump surface re-treatment operation will

continue to operate until 2014 under the management of Crown based on the current rate of production of approximately 178,000tpm.

At June 30, 2008, ERPM had 1,900 employees, including contractors. On November 19, 2008, the Company advised unions
of its intention to place on care and maintenance the underground operations of ERPM and to proceed with a consultation process
under Section 189A of the Labour Relations Act to determine the future of the mine's employees.

Property

ERPM is situated on the Central Rand Goldfield located within and near the northern margin of the Witwatersrand Basin

in the town of Boksburg, 20 miles (32 kilometers) east of Johannesburg. Access is via Jet Park Road on the N12 Boksburg-

Benoni highway. Underground mining and recovery operations comprise relatively shallow remnant pillar mining in the central

area and conventional longwall mining in the south-eastern area. Surface reclamation operations including the treatment of sand

from the Cason Dump, is conducted through the metallurgical plant, tailings deposition facilities and associated facilities. The

mine exploits the conglomeratic South Reef, Main Reef Leader and Main Reef in the central area and the Composite Reef in the

south-eastern area. ERPM operates under mining license ML5/1995 in respect of statutory mining and mineral rights.

During fiscal 2005, all mining activity was moved to the Far East Vertical, or FEV, Shaft lease area. The South East

Vertical Shaft was maintained for hoisting and pumping, the Central Shaft was placed on care and maintenance and the Hercules

Shaft was decommissioned resulting in the retrenchment of 806 employees in August 2004. At FEV, there has been a drive on

development and a focus on improving recovered grade.

At June 30, 2008, the net book value of ERPM’s mining assets was R73.9 million (of which R28.1 million is attributable

to the Cason Dump) with 0.8 million attributable ounces of Ore Reserves.

History

1895

Formation of East Rand Proprietary Mines Limited.

1991

The FEV shaft was commissioned.

1999

East Rand Proprietary Mines Limited was liquidated in August 1999. The mine was run by a small number of

employees during liquidation. Underground flooding continued during liquidation.

2000

KBH took over control of the mine in January 2000. Operating as Enderbrooke Investments (Pty) Limited, or

Enderbrooke, and employing an outside contractor, the mine re-commenced mining operations in February 2000.

2002

Crown purchased 100% of ERPM, from Enderbrooke.

2003

An underground fire occurred at FEV Shaft, in February 2003. There was also the loss of Hercules Shaft in June 2003

and the loss of a secondary outlet at the FEV shaft in November 2003.

2004

In July 2004 it was determined that the underground section would undergo a controlled closure program ending March

2005. The closure program was prevented by a reduction in costs and improved productivity at the mine.

2005

Central Shaft placed on care and maintenance.
On July 6, 2005, we signed a Memorandum of Understanding with KBH regarding the acquisition by Khumo Gold of a

15% stake in our South African Operations.
On October 27, 2005, our board of directors approved the transaction with Khumo Gold. The new structure resulted in

Khumo Gold acquiring a 15% interest in a newly created vehicle, DRDGOLD SA, which includes 100% of ERPM,

Crown and Blyvoor. We owned an 85% interest in DRDGOLD SA.

2006

On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us

pursuant to the option agreement concluded between us and Khumo Gold in October 2005 to acquire a further 11% in

DRDGOLD SA.
A prospecting right covering an area of 1,252 hectares (3,093 acres) of the neighboring Sallies lease area, referred to as

ERPM Extension 1 was granted by the DME.

2007

A prospecting right, incorporating the southern section of the old Van Dyk mining lease area and a small portion of

Sallies, was granted by the DME. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres).

2008

On April 25, 2008, ERPM gave notice of intention to restructure the work force due to operational requirements and 239

employees were retrenched during June 2008.

On October 23, 2008, ERPM announced the suspension of drilling and blasting operations underground following the

cessation of pumping of underground water at the South West Vertical shaft on October 6, 2008 for safety reasons

following the deaths of two employees.

On November 19, 2008, we announced our intention to place on care and maintenance the underground operations of

the ERPM, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to

determine the future of the mine’s 1,700 employees

Mining and Processing

Underground mining operations at ERPM are comprised of two vertical shafts known as FEV Shaft and the Central Shaft.

There are also three additional shafts namely the South East Vertical Shaft, or SEV Shaft, used for the transport of employees and

materials and the hoisting of rock, the South West Vertical, or SWV, Shaft and the Hercules Shaft that are used for water pumping

only. The Cason Dump Project is used for the retreatment of surface material mined from the defunct Cason shaft.

Early in the second quarter of fiscal 2006, a 16 meter up-throw fault in the 70 level east area of the mine was encountered

and work to traverse this continued for the remainder of the year. Refurbishment of the Far East Vertical, or FEV, Shaft decline and

decline conveyor was another key focus of attention during the year. Production build-up from newly opened-up, lower grade areas

above 70 level – both to relieve pressure on the decline conveyor and as a safety response to increasing seismicity in higher grade

areas below 70 level began during the last quarter of fiscal 2006.

In fiscal 2007, a planned shift from lower volume, higher grade scattered mining in the west of the lease area to higher

volume, lower grade longwall mining in the east below 70 level proved problematic. Delays in the supply of services to the newly

developed longwalls reduced volumes mined and navigation of faulting encountered had a negative impact on both volumes and

yield. By the end of fiscal 2007 a catch-up in the delivery of services saw a recovery in volumes and a higher level of throughput for

the year. The average grade recovered was lower, however. To limit the negative impacts of this, more focus will be directed towards

improving recovered grade. A three-year, R35.0 million plugging program to isolate ERPM’s FEV Shaft from water rising in the

Central Witwatersrand Basin was completed in fiscal 2008. Increased throughput from ERPM’s Cason Dump made possible through

upgrades to pumps and piping and an increased milling capacity at the Knights plant, offset the impact of a slight drop in grade,

resulting in higher surface gold production.

In fiscal 2008, the ERPM underground operations were restructured in an attempt to return the mine to profitability. A

retrenchment agreement was reached with representative unions and associations without recourse to industrial action, and successful

application of various avoidance measures contained the number of employees retrenched to 239.

On October 23, 2008, drilling and blasting operations were suspended after the cessation of pumping of underground water

at SWV Shaft on October 6, 2008 for safety reasons following the deaths of two employees at the shaft on September 19, 2008.

Although the FEV Shaft where production is taking place is sealed off from water ingress from the SWV Shaft, the pumps at FEV

Shaft will no longer be able to cope with rising water, which includes the water resulting from the ice sent underground every day to

cool down the underground working places. Without being able to continue to supply ice underground for this purpose, the

underground temperature will become unacceptably high and it will not be safe for employees to continue work underground at the

FEV shaft.

On November 19, 2008, we announced our intention to place on care and maintenance the underground operations of the

ERPM, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to determine the future

of the mine’s 1,700 employees

Electricity to ERPM is provided to the Cason Dump, SEV and FEV Shafts from the Bremmer substation, located in close

proximity to the mine in Boksburg. Transmission is at the rate of 88,000 volts. The Simmer Pan substation, located approximately

10 miles (16 kilometers) away from the mine site in Germiston, supplies the SWV and Hercules Shafts. Transmission is at the rate

of 44,000 volts. The two substations, located on mine site, transform the power to 6,600 volts for direct supply to the shaft winder

and air compressors. The power supply is further reduced to 525 volts for smaller devices and equipment used on the mine. The

average annual power consumption is about 240 GWHr and the maximum demand is about 52 MW. The on-mine substations are

older in nature and undergo annual infrared testing to identify hot connections which are potential fire hazards and are subject to

regular maintenance which includes the inspection of the settings, blades and changing the transformer oil in the circuit breakers.

In fiscal 2008, electricity supply to the mine was interrupted by Eskom. The operation is on a six hour standby notice, in the

event that power supply becomes unstable in the area. Eskom has requested all of its “Key Customers” to reduce power consumption

by 10%. ERPM has managed to adhere to this request and will continue to save the maximum amount of energy possible.

Exploration and Development

The necessity to extend the FEV decline from 75 to 78 levels to replace face length has been postponed due to the cessation

of drilling and blasting operations in October 2008.

An additional application to extend ERPM’s existing prospecting right eastwards into the Rooikraal/Withok area,

incorporating the southern section of the old Van Dyk mining lease area and a small portion of Sallies, was granted by the DME in

fiscal 2007. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres).

Environmental and Closure Aspects

There is a regular ingress of water into the underground workings of ERPM, which was contained by continuous pumping

from the underground section. On May 31, 2004, ERPM stopped continuous pumping of water from the underground section for

financial reasons due to the withdrawal of the State pumping subsidy and the low Rand gold price making the cost of full time

pumping unaffordable, with occasional pumping to surface conducted on weekends. In December 2004, the mine received the

pumping subsidy funds and continuous pumping was reinstated. Studies on the estimates of the probable rate of rise of water have

been inconsistent, with certain theories suggesting that the underground water might reach a natural subterranean equilibrium, whilst

other theories maintain that the water could decant on surface. A program is in place to routinely monitor the rise in water level in the

various underground compartments and there has been a substantial increase in the subsurface water levels. ERPM’s SWV Shaft has

been used for some time to manage the rising water level on the Central Witwatersrand Basin. Some 60 megalitres of water were

pumped daily from a depth of approximately 1,000 meters.

In fiscal 2007, ERPM updated its EMP to meet MPRDA requirements and submitted it to the DME for approval. The

concurrent rehabilitation of redundant structures and holdings continued throughout fiscal 2007. The pumping infrastructure has been

upgraded at the South West Vertical Shaft in anticipation of the additional water from the Hercules basin expected at the end of

October 2007. Pumping continued during fiscal 2007 at the South West Vertical Shaft.

On October 6, 2008, pumping of underground water at the South West Vertical Shaft was stopped for safety reasons

following the death of two employees at the shaft on September 19, 2008. Management has concluded that the project to upgrade the

total pumping capacity at South West Vertical Shaft with a more efficient system as part of an Eskom-funded demand-side

management project is not economically viable and on November 19, 2008, we announced our intention to put the underground

operations at ERPM on care and maintenance.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, ERPM have estimated that the

total cost for ERPM, in current monetary terms as at June 30, 2008, is R52.4 million. A total of R12.8 million has been contributed to

the ERPM Rehabilitation Trust Fund. This is an irrevocable trust, managed by specific responsible people who we nominated and

who are appointed as trustees by the Master of the High Court of South Africa.

Ore Reserves and Life of Mine

As at June 30, 2008, our 74% share of Proven and Probable Ore Reserves of ERPM was 0.8 million ounces, of which 0.6

million ounces relate to the underground section. The remaining 0.2 million ounces relate to the surface material from the Cason

Dump which, based on the estimated rate of production, will be processed over a remaining seven year period ending in fiscal 2015.

As at June 30, 2007, our 74% share of Proven and Probable Ore Reserves of ERPM were 0.5 million ounces. The year on year

increase is mostly attributable to a rise in underground reserves. A Mineral Resource competent person is appointed at each operation

to review our Ore Reserve calculations for accuracy. For ERPM, Mr. Johan Smit (PLATO) is the appointed Mineral Resource

competent person. The current underground life-of-mine business plan is seven years.

Current Production

Gold production for ERPM was 79,479 ounces in fiscal 2008 compared to gold production of 80,216 ounces in fiscal 2007.

The following table details our attributable share of the production results from ERPM for the past three fiscal years:

Year ended June 30,

2008

2007

2006

Production

Surface Operations

Ore mined ('000 tons)................................................................................................................. 2,049

1,932

1,761

Recovered grade (oz/ton) ........................................................................................................... 0.011

0.011

0.012

Gold produced (ounces) ............................................................................................................ 22,667

22,153

20,325

Underground Operations

Ore mined ('000 tons)................................................................................................................. 334

297

248

Recovered grade (oz/ton) ........................................................................................................... 0.170

0.196

0.242

Gold produced (ounces) ............................................................................................................ 56,812

58,063

59,999

Total ounces produced ............................................................................................................... 79,479

80,216

80,324

Results of Operations (R)

Revenues ('000) ......................................................................................................................... 467,057

367,323

225,217

Operating cost ('000) .................................................................................................................

428,255

358,716

191,803

Cash cost per ounce of gold ($)

................................................................................................

737

619

487

Total cost per ounce of gold ($)

................................................................................................

963

692

577

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating

capacities of the mines and to monitor performance of our mining operations.

Ergo and Elsburg Joint Ventures

Overview

The Ergo and Elsburg Joint Ventures consist of one carbon-in-leach, or CIL, circuit at the Brakpan plant, the Withok
deposition complex purchased from Anglo Gold Ashanti and the Elsburg tailings complex, comprising approximately 180 Mt of
tailings. Since 1987, Anglo Gold Ashanti treated surface material at Ergo until the operation was closed during March 2005.

DRDGOLD SA, through its subsidiaries, initially owned 50% of the Ergo and Elsburg Joint Ventures. On September 29,
2008, DRDGOLD SA acquired a further 15% interest in the Elsburg Joint Venture, or Ergo Phase 1, from Mintails SA resulting in
DRDGOLD SA, which holds its interest through its subsidiary, ERPM, holding a 65% interest and Mintails SA a 35% interest in
the joint venture. The Ergo Joint Venture will operate for its own account, under the Anglo Gold Ashanti authorizations, until new
order mining rights have been obtained. These assets comprise servitudes, or access agreements, infrastructure, piping, equipment
and old order mining rights.

On December 8, 2008, DRDGOLD acquired the remaining 35% of the Elsburg Joint Venture for a purchase consideration
of R177.0 million

Property

The Ergo and Elsburg operations are located approximately 43 miles (70 kilometers) east of the Johannesburg central
business district in the province of Gauteng. Access to the Brakpan plant is via the Ergo Road on the N17 Johannesburg-Springs
motorway.

The acquisition of the Withok deposition site provides the expanded Ergo Joint Venture with extensive additional deposition
capacity commensurate with the substantial increases in tailings material and processing capacity.

The refurbishment of one CIL circuit at the Brakpan plant will have the capacity to treat an estimated 15Mt of tailings a
year. Phase 2, now under investigation, envisages the expansion of the gold plant by refurbishing the second CIL circuit and
developing uranium and acid plants. A feasibility study for Phase 2 is currently underway and will be completed in the final quarter
of calendar 2009.

As of June 30, 2008, the net book value of the Ergo and Elsburg Joint Ventures’ mining assets was R359 million.

Environmental and Closure Aspects

             The Ergo and Elsburg Joint Ventures will be operating sites located in close proximity to significant municipal
infrastructure, commercial and residential development. Environmental management programs, addressing a wide range of
environmental issues, have been prepared by specialist environmental consultants and integrated into the internal environmental
assessment process.

              While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we estimate that the total cost for
the Ergo and Elsburg Joint Ventures, in current monetary terms as at June 30, 2008, is approximately R150.0 million.

Ore Reserves and Life of Mine

               As at June 30, 2008, our 37% share of the Proven and Probable Ore Reserves of the Ergo Joint Venture was 0.06 million
ounces. For the Ergo Joint Venture, Mr. William John Laing (PLATO) is the appointed Mineral Resource competent person. The
current life-of-mine business plan is estimated to be two years.

Exploration Projects

Our exploration and project development activities during fiscal 2008 continued to enhance our growth strategy by

extending and replacing existing production ounces. In addition, escalations in the Uranium Oxide price prompted us to embark on

an exploration program to determine the uranium potential of our extensive surface dumps. The main area of exploration during fiscal

2008 was focused on ERPM’s surface resources which will be mined by the Ergo and Elsburg Joint Ventures. Core from the drilling

program is in the process of being analyzed following which the competent persons report will be finalized in December 2008.

Blyvoor

In November 2007, encouraging results had been obtained from a drilling program to define the uranium resource in

Blyvoor’s slimes dam material and a 17.5 million pound uranium and 0.8 million ton sulphur resource was declared. During fiscal

2008, Murray and Roberts, a construction company, was awarded the tender to do all underground drilling at Blyvoor. Cover drilling

together with exploration drilling was done in current mining operational areas. All Middelvlei and Carbon Leader reef information

gets analyzed and incorporated into the current geological structure models. Development in the South West Block is ongoing and

drilling will continue as development ends advance. The mining of the South West Block will be further evaluated once more

information becomes available.

Drilling of 12 additional holes on No. 7 Slimes Dam was done during fiscal 2008. Test work on the recoveries has also been

completed on three of the holes and indicates recoveries in excess of 40%. Test work on the recoveries for the Doornfontein slimes

dam is currently being done and once completed the strategy regarding the surface operations at Blyvoor will be done.

RPM Extension 1

ERPM has a prospecting right covering an area of 1,252 hectares (3,093 acres) of the neighboring Sallies lease area,

referred to as ERPM Extension 1. The regional geology of the area indicates that there will be a strike change due to faulting

associated with an east-west trending sinistral tear fault.

On fiscal 2007, four exploration boreholes were drilled from current mining areas into ERPM Extension 1.

An application to convert the prospecting right for ERPM Extension 1 to a mining right has been submitted during

October 2007. In accordance with a revised prospecting works program granted in November 2007, ERPM had penetrated the

Sallies Boundary with two panels in the 71E upper long wall.

revised structure plan for Extension 1 has been produced, utilizing geophysical information and historical Sallies’ data.

An unconformity between the Jeppestown Shales and the Composite reef has been identified which results in a narrowing of their

middling towards the east and north.

ERPM Extension 2

An application to extend ERPM’s existing prospecting right eastwards into the Rooikraal/Withok area, incorporating the

southern section of the old Van Dyk mining lease area and a small portion of Sallies, was granted by the DME in fiscal 2007.

Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres).

The resource for ERPM Extension 2 was estimated by independent consultants and audited by Coffey Mining. An

Inferred Resource of 28.6 Mt at 9.06 g/t (8.3 Moz), at a stope width of 125 cm was declared. The payshoot area equates to 17% of

the prospecting right, after applying 4% geological losses. The evaluation methodology applied was a global Sichel ‘t’ estimate

based on five historical surface boreholes with grades ranging from 1.13 g/t (0.033 oz/ton) over 94.6 cm to 216 g/t (6.307 oz/ton)

over 15.5 cm. A sixth hole drilled from under ground and reportedly assaying at 84.9 g/t (2.479 oz/ton) over 29.2 cm was

excluded from the estimate, as it could not be verified.

Argonaut Project

The Argonaut project represents the southern down-dip extension of the Central Rand Goldfields. It relates to the

possible exploitation of part of the potential resource at 3,000 to 4,500 meters below surface, situated south of the Robinson Deep

mine and extending eastwards to the Simmer and Jack mine.

On February 6, 2006, a prospecting right covering an area of 2,394 acres (969 hectares) over part of the project was

obtained. As the area covered by the current prospecting right is not large enough to sustain an ultra-deep mining operation, an

application for an extension to the current prospecting right by an additional 9,889 acres (4,002 hectares) was submitted to the

DME. The application was rejected on the grounds that prospecting would take place within a residential township. A request for

ministerial approval in terms of Section 48 of the MPRDA to apply for a permit over the residential area is being pursued.

Uranium Exploration

In November 2007, encouraging results had been obtained from a drilling program to define the uranium resource in

Blyvoor’s slimes dam material and a 17.5 million pound uranium and 0.8 million ton sulphur resource was declared.

Exploration drilling is currently under way to define the uranium potential of all Crown and ERPM current deposition sites.

Independent Competent Person Reports on Uranium, sulphur and gold for resources and reserves have been, and are in the process

of being compiled pursuant to the drilling of various tailings dams in the Central and East Rand. Beneficiation will be effected at

the Ergo Joint Venture plant.

Additional drilling for uranium and sulphur potential of the current Crown reserves and resources are being planned, also

for future beneficiation at the Ergo Joint Venture plant. An independent Competent Person Report for this work will be done.

Competent Person Reports for gold on these resources already exist.

Discontinued Operations

Tolukuma

Overview

Dome Resources (Pty) Limited, or Dome, was incorporated on May 17, 1984, under the name Dome Resources NL. Dome

owned and operated the Tolukuma gold and silver mine in PNG. During September 1999, we purchased 28,693,002 (19.93%) of

Dome’s ordinary shares for A$0.30 ($0.19) per share. In June 2001, we increased our shareholding to 100%.

On September 10, 2007, Emperor which held 100% interest in Tolukuma announced its intention to divest the Tolukuma

gold mine. On October 22, 2007, we sold our entire interest in Emperor.

The Tolukuma gold mine is located approximately 6 kilometers east of Fane Mission, 12 kilometers west of Woitape and

100 kilometers north of Port Moresby in Central Province, Papua New Guinea. The mine is in an area of steep mountainous

terrain in the headwaters of Iwu Creek, which drains into the Auga River. Elevations in the mine lease area range from 1,100

meters above sea level (asl) at the Auga River to 1,750 meters asl at the top of Tolukuma hill.

Property

Tolukuma consists of one mining lease, ML104, covering 1,898 acres (768 hectares) and five current exploration licenses

covering an area of approximately 513,962 acres (208,000 hectares), two licenses under renewal covering 125,525 acres (50,800

hectares) and four licenses under application totaling 1,073,884 acres (434,600 hectares). The total exploration area amounts to

approximately 2,456,144 acres (994,000 hectares).

The mine is located about 62 miles (100 kilometers) north of Port Moresby in the Central Province of Papua New Guinea at

an elevation of 5,115 feet (1,560 meters) above mean sea level. The mine is situated in very steep mountainous terrain that is not

accessible by road. All transport of employees, materials and equipment to and from the mine is by helicopter. Tolukuma is worked

on a “fly-in-fly-out basis,” with all staff being accommodated in quarters when at the mine.

The climate of the Central Province area is temperate with year round rainfall. Temperatures range from 50 to 77 degrees

Fahrenheit (10 to 25 degrees Celsius) and rainfall averages 144 inches (3,650 millimeters) per year. The vegetation is largely

rainforest and thick vegetation associated with high rainfall and mountainous regions.

At Tolukuma, the traditional landowners are the Yulai people who belong to the Auga tribes – Auga being the main river

in the area. There are three clans and at the head of each clan is a chief. The population around the mine is approximately 2,700,

with 700 being landowners and the rest made up of outsiders coming into the area to seek employment. There is a Memorandum

of Agreement, or MOA, between National Government, Provincial Government, the landowners and Tolukuma. The MOA is a

working document which indicates the responsibilities of each party and their role in the sustainable development of the

community. The MOA is reviewed every two years, with an MOA to be mutually agreed by the parties if revised. Currently, there

is an agreed MOA in place.

Production from Tolukuma is subject to a 2% net smelter royalty. This royalty is distributed to the Yulai future

generation fund, a landowners’ association, the landowners, and to a Central Provincial Government fund for projects outside the

mine area.

History

1984

Dome Resource (Pty) Limited was incorporated on May 17, 1984, under the name Dome Resources NL, or Dome.

1987

Tolukuma mine was discovered by Newmont Proprietary Limited.

1993

Tolukuma Gold Mines Limited was acquired by Dome from Newmont Second Capital Corporation.

1999

In September, we purchased an initial stake of 19.93% of Dome.

2001

In June, we acquired all outstanding shares of Dome we did not already own, bringing our shareholding to 100%.

2006

We concluded a sale and purchase agreement with Emperor, where initially we held 88.3% of Emperor which in turn

holds the 100% interest in Tolukuma.

2007

On September 10, 2007, Emperor announced its intention to divest the Tolukuma gold mine situated in PNG.

Accordingly, the Company initiated a divestment process for the mine and a portfolio of associated exploration

tenements.
On October 22, 2007, we sold our entire interest in Emperor for R355.8 million (A$55.9 million).

Mining and Processing

The Tolukuma plant was built in 1995. Historically ore has been mined from both underground and open pit areas. No open

pit mining is currently carried out. Ore is sourced primarily from underground mining with mill feed supplemented by ore recovered

from low grade stockpiles. All mining is conducted using mining plant and equipment owned by Tolukuma. The average mining

depth at Tolukuma is 490 feet (150 meters) below surface or approximately 4,760 feet (1,450 meters) above mean sea level. Access

to underground workings is via decline shafts. Mining methods vary according to local ground conditions and are generally

mechanized cut and fill shrinkage methods.

The metallurgical plant is compact and is located on a steep ridge in very mountainous terrain. Ore is trucked to the plant,

then milled and treated through a conventional gravity and CIL circuit. The plant consists of a closed circuit semi-autogenous mill

that was at the time of disposition capable of processing 18,000 tpm. Cyanide in the residue is neutralized in a detoxification plant

prior to riverine discharge.

Tolukuma is situated in a remote area, and as a result is forced to be self sufficient with regard to the generation of

power. Power is generated through a combination of diesel driven generator sets and hydro-turbine driven generator sets. Three

hydro units are installed, capable of generating 1.8 MW of power. These units are dependant on the supply of adequate water.

These generators supply 32,000 volts via overhead lines to the mine, where it is transformed down to either 6,600 volts, 1,000

volts or 525 volts, depending on the requirement. On average the mine consumes 30 MW of power. Any shortfall from the hydro

units is made up by the diesel units (a total of 3.2 MW of diesel generating power is installed).

Environmental and Closure Aspects

Tolukuma has been developed in accordance with an environmental plan approved by the Papua New Guinea authorities in

July 1994. Tolukuma is compliant with the Papua New Guinea Government’s regulatory requirements. To ensure continuing

compliance with the government’s regulatory requirements, Tolukuma has implemented a broad-based Environmental Management

and Monitoring Program, or EMMP. The measures we have taken to implement this program include addressing water quality,

population dietary surveys and aquatic fauna and metals-in-tissue surveys. These surveys were conducted during July and September

of 2003. During March 2003, an environmental audit was concluded at Tolukuma which found the operations to be in substantial

compliance with applicable Papua New Guinea legislation and the EMMP environmental plan. The studies conducted in 2003

confirmed existing trends that had been established over recent years. The water quality meets legal requirements, as per the criteria

set by the water license.

Tailings are routinely discharged into the Auga/Angabanga river system. The discharging of tailings into riverine and

marine systems in Papua New Guinea is an acceptable practice due to the seismic instability of the area and the dangers this poses for

the stability of conventional tailings dams. Due to the fact that ore mined at the Tolukuma Mine, and the surrounding land in general

is high in mercury, the potential does exist that levels of mercury discharged into the river system might expose us to criminal

liability under Papua New Guinea legislation. As a result of an internal study of the Tolukuma Mine in 2000, in order to ensure that

mercury discharges remain within allowable limits, the following program is being followed:

• daily monitoring of mercury levels at the tailings discharge point and approximately 1500 feet downstream (grab sampling);

• monthly monitoring of mercury and other heavy metals at government mandated water quality inspection points; and

• biennial monitoring of stream sediments.

Ore Reserves and Life of Mine

Our attributable Proven and Probable Ore Reserves for Tolukuma, as at June 30, 2007, were 0.108 million ounces,
determined assuming a gold price of K2,024 per ounce ($660 per ounce). Based on a gold price of K1,840 per ounce ($582 per
ounce), at June 30, 2006, the Proven and Probable Ore Reserves of Tolukuma were 0.195 million ounces. The decrease in Ore
Reserves was primarily as a result of depletion.

A Mineral Resource competent person is appointed at each operation to review our Ore Reserves calculations for accuracy.
For Tolukuma, Mr. Roger Cooper (MAusIMM and MAIG) is the appointed Mineral Resource competent person. As at June 30,
2007, Tolukuma has been assessed with a two year life of mine for its underground operations.

Production

Gold production from July 2007 to October 2007 was 13,427 ounces. In fiscal 2007 gold produced was 44,181 ounces.

The following table details the operating and production results from Tolukuma for the past three fiscal years.

Year ended June 30,

2008

2007

2006

Production

Underground Operations

Ore mined ('000 tons)...............................................................................................................................

204

213

Recovered grade (oz/ton) ......................................................................................................................... 0.22

0.22

0.26

Gold produced (ounces) ........................................................................................................................13,427

44,181

54,790

Results of Operations (R)

Revenues ('000) .....................................................................................................................................89,235

224,872 194,430

Operating cost ('000) .............................................................................................................................07,381

277,191 222,476

Cash cost per ounce of gold ($)

..............................................................................................................1,094

869

632

Total cost per ounce of gold ($)

..............................................................................................................1,767

1,338

775

Porgera

Overview

Through our subsidiary, Emperor, we owned a 20% interest in an unincorporated joint venture, the Porgera Joint

Venture, which held certain mining leases, easements and exploration licenses which form part of the Porgera gold mine, or

Porgera, in the highlands of PNG. We purchased this interest in October 2003 for a purchase consideration of $77.1 million.

Barrick was the owner of a 75% interest. The remaining 5% interest was held by Mineral Resources Enga Limited, or MRE (on

behalf of Enga Provincial Government and landowners in PNG). All of the various mineral tenements making up Porgera were

exploited collectively by the joint venture partners.

Barrick is the operator of Porgera and is subject to the control of a management committee made up of representatives of

the joint venture partners. Decisions regarding the assets which comprise Porgera, including any sale thereof, are made

collectively by the parties through the management committee. The parties also have a right of first refusal with regard to certain

assignments of assets which make up Porgera. Each party has the right to own and to take in kind and dispose of its share of all

ores, concentrates and refined products produced by Porgera. Each party also pays for its proportionate share of the costs

associated with the mining activities.

Production from Porgera is subject to a 2% net smelter royalty payable to the National Government Department of

Mining which then distributes it to the Enga Provincial Government, the Porgera District Authority and local landowners.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick for a final cash consideration

of $255.0 million, which included interest on the original purchase price.

Property

The Porgera deposit and the mine are located in the Enga Province in the highlands of PNG, approximately 7,260 feet

(2,213 meters) to 8,910 feet (2,716 meters) above mean sea level, about 82 miles (132 kilometers) west of the established town of

Mount Hagen, 275 miles (443 kilometers) northwest of Port Moresby, and about 425 miles (684 kilometers) by road from the

coastal port of Lae from which all materials are freighted. The road is partly paved and passes through unstable mountainous

terrain with many major river crossings. Personnel are transported to mine site by bus, fixed wing aircraft and helicopter.

Temperatures range from 50 to 77 degrees Fahrenheit (10 to 25 degrees Celsius) and rainfall averages 3,650 mm per

year. The vegetation is largely rainforest below an elevation of 7,920 feet (2,414 meters).

In addition to a Special Mining Lease, the Porgera Joint Venture also holds additional mining tenements for utilities such

as power transmission lines and water supply pipelines and other activities incidental to the main mining activity. Separate from

the mining tenements, there are two Exploration Licenses adjacent to the Porgera Mine, namely EL454 and EL858.

Porgera is operated subject to the requirements of the PNG Mining Safety Act and Regulations as applied by the Mines

Inspectorate.

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating

capacities of the mines and to monitor performance of our mining operations.

History

1938

Alluvial gold was first reported at Porgera.

1975

Placer (PNG) Limited, or Placer (PNG), a wholly owned subsidiary of Placer Dome Inc., became the operator and

owner of a two-third interest in an exploration venture with Mount Isa Mines Limited (now MIM Holdings Limited.),

or MIM.

1979

A Joint Venture Agreement was signed whereby Placer (PNG), MIM and New Guinea Goldfields Limited. (a

subsidiary of Goldfields Limited) each held a one third interest and the Independent State of Papua New Guinea had

the right to acquire at cost up to a 10% interest in the project if developed.

1989

The joint venturers' application for a Special Mining Lease was approved in May and construction began

immediately. The State of Papua New Guinea accepted its full 10% entitlement (inclusive of 5% on behalf of the

Enga Provincial Government), thus diluting each of the other joint ventures down to 30% each. The State of Papua

New Guinea took its interest in the name of a corporate nominee, Mineral Resources Porgera Limited.

1990

Commercial production commenced in August. MIM sold its 30% interest to Highlands Gold Limited., or Highlands

Gold.

1993

Placer (PNG), Goldfields and Highland Gold each sold a further 5% to the State of Papua New Guinea (15%). The

additional 15% was taken by the State of Papua New Guinea in the name of a corporate nominee, Orogen Minerals

(Porgera) Limited.

1997

Placer Dome’s joint venture interest was increased from 25% to 50% as of January 1, 1997, following the completion

of the acquisition of Highlands Gold.

1999

The State of Papua New Guinea reorganized the holding of Mineral Resources Porgera Limited by transferring a 5%

direct interest in the Joint Venture to Mineral Resources Enga Limited owned by the Enga Provincial Government

and project area landowners.

2002

Placer Dome’s joint venture interest in Porgera was increased from 50% to 75% through the acquisition of

AurionGold. The State of Papua New Guinea reorganized its holdings in the Joint Venture such that Oil Search

Limited then held a 20% direct interest in the Joint Venture through two subsidiaries.

2003

We acquired the shares of Oil Search Limited in Orogen Minerals (Porgera) Limited and Mineral Resources Porgera

Limited through the amalgamation of Mineral Resources Porgera Limited with Orogen Minerals (Porgera) Limited

and Dome Resources (PNG) Limited, our wholly-owned subsidiary.

2004

Porgera concentrated on upgrading East Zone and drilling was carried out on the Lower Central Zone.

2005

Expansion of existing exploration projects continues but under a project termed Porgera Deep Minex.

2006

Barrick acquired Placer Dome’s 75% stake in Porgera. We concluded a sale and purchase agreement with Emperor,

where effectively we held 88.3% of Emperor who in turn held the 20% interest in the Porgera Joint Venture.

2007

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick for a final cash

consideration of $255.0 million, which included interest on the original purchase price.

Mining and Processing

The Porgera deposit is being extracted using open pit and underground mining methods. Mill feed, on a tonnage basis,

was sourced 88% from open pit and run of mine stockpiled ore, and 12% from underground. Underground ore accounted for 14%

of the contained gold in mill feed.

Open pit mining is a typical hard rock operation utilizing 33 feet (10 meter) benches. The current mining fleet of DML

blast hole drills, O&K RH200 hydraulic face shovels and Caterpillar 789 haul trucks, gives a nominal capacity in the order of 80

million tonnes per annum. Waste stripping requirements will reduce as the open pit mining operation approaches closure in

calendar 2008, allowing a progressive retirement of the mining fleet.

Underground mining was suspended in 1997, and subsequently recommenced in 2002. Underground production was

expected to continue through to late 2008. Ore is being mined from the 2,210 meter level in Stage 4, and waste is being mined

from the 2,390 meter level in Stage 5. Stage 5 is the final open pit development stage and will be completed in late 2008 at the

2,050 meter level. Stockpiled low grade ore was expected to form the basis of ongoing gold production from mid 2008 until 2015.

Remediation work following the failure of the West Wall during the previous fiscal year continued during fiscal 2007, leading to

reliance on low-grade, long-term stockpile material as the primary feed.

On completion of the open pit operation, the mill was expected to continue to process accumulated lower grade ore

stockpiles through to 2015, supplemented by the underground ore until 2008. Gold production from the open pit and underground

from 2008 onward will fall, as lower grade stockpile ore replaces the open pit ore feed.

The Porgera plant was completed in 1996. The mill has undergone four stages of improvement and expansion, since it was

first commissioned in September 1990. The last expansion was completed in 1996 with the installation of additional milling,

flotation and leaching capacity increasing the nominal throughput from 10,000 tonnes per day to 17,700 tonnes per day. Further

improvements were made in 1999 with the addition of further flotation capacity and the installation of gravity concentrators to

remove free gold and to improve overall recoveries.

The main water supply for the mine is the Waile Creek Dam, located approximately 4 miles (7 kilometers) from the

mine. Water for the grinding circuit is also extracted from Kogai Creek, which is located adjacent to the grinding circuit. The mine

operates four water treatment plants for potable water and five sewage treatment plants.

The principal source of power for Porgera is supplied by a 45 mile (73 kilometer) transmission line from the gas fired

Hides Power Station. The station has a total output of 62 MW. A back up diesel power station is located at the mine and has an

output of 13MW. The average power requirement of the mine is about 60 MW. Average annual power consumption is 518

GWHr.

Environmental and Closure Aspects

Porgera is located in extremely rugged mountainous terrain, subject to seismic activity, high rainfall and landslides. In such

conditions construction of a tailings impoundment would be very difficult and the risk of an engineering failure high. Therefore the

Papua New Guinea Government approved riverine disposal as the most appropriate method for treated tailing and soft incompetent

waste rock. Competent rock is stored in stable waste dumps. The mine follows a government approved Environmental Management

and Monitoring Program.

In 1996, an independent study was undertaken by the Commonwealth Scientific & Industrial Research Organization, or

CSIRO, an Australian based independent research organization, to assess the mine's impact on the downstream river system and local

people. In its report CSIRO made certain recommendations to the Porgera Joint Venture that have either been implemented or are in

the advanced stages of implementation. An advisory group, called the Porgera Environmental Advisory Komiti, or PEAK, was

formed as a result of the CSIRO recommendations. PEAK comprises representatives from the Papua New Guinea Government and

international non-governmental organization groups, Barrick and independent technical experts. The primary function of PEAK is to

enhance understanding and provide transparency of Porgera's environmental (physical and social) issues with external stakeholders

and to assist in reviewing its environmental performance and public accountability. In 2002, PEAK had its terms of reference

expanded to include mine closure.

Production

Attributable production for the nine months ended March 31, 2007 from Porgera amounted to 71,570 ounces at a cash cost

and total cost per ounce of gold of $519 and $606, respectively. Production during the period was impacted by unplanned mill

downtime, suspension of mining in the mini-pit to allow construction of the lower buttress, unseasonably high rainfall and the Hides

power interruptions from lightning strikes in early December 2006, with production returning to normal levels by the end of the

March 2007 quarter. Low grade long term stockpiles and lower grades from the pit resulted in lower than expected gold feed grades;

however this was partly offset by higher grade open pit and underground ore for the period. In April 2007, Emperor announced the

sale of its 20% interest in the Porgera Joint Venture to Barrick. The effective date of the transaction was April 1, 2007.

The following table details the attributable operating and production results from the Porgera Joint Venture for the past three

fiscal years.

Year ended June 30,

2008

2007

2006

Production

Surface and underground operations

Ore mined ('000 tons)................................................................................................................. N/A

787

1,209

Recovered grade (oz/ton) ........................................................................................................... N/A

0.091

0.106

Gold produced (ounces) ............................................................................................................ N/A

71,570

128,238

Results of Operations (R)

Revenues ('000) .........................................................................................................................

N/A

328,094

419,156

Operating cost ('000) ................................................................................................................. N/A

235,525

239,348

Cash cost per ounce of gold ($)

................................................................................................

N/A

456

290

Total cost per ounce of gold ($)

................................................................................................

N/A

521

460

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick. The legal effective date of the

transaction was April 1, 2007.

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating

capacities of the mines and to monitor performance of our mining operations.

Durban Deep

Overview

The Durban Deep mine was the original gold mine of the Group. Durban Deep is situated on the northern edge of the

Witwatersrand Basin immediately to the west of Johannesburg. Mining had been taking place within the lease area since the

discovery of the Witwatersrand Goldfield in 1886 at nearby Langlaagte.

As of August 2000, we ceased all underground and open pit mining operations at Durban Deep. Following the withdrawal

of our underground pumping subsidy, the deeper sections of the mine were flooded. On a combined basis, Durban Deep produced

more than 37 million ounces of gold prior to the cessation of operations.

We concluded an agreement with M5 on July 21, 2005, in terms of which M5, against payment of a non-refundable fee of

R1.5 million, was granted an option to acquire Durban Deep’s mine village for R15.0 million. The option lapsed on November 19,

2005. On the exercising of the option the option fee would be deemed part payment of the purchase consideration. If not, the option

fee would be forfeited to us.

On November 18, 2005, M5 exercised the option and provided a guarantee for payment. Prior to the registration of the

transfer occurring, we were notified by Rand Leases Properties Limited (formerly JCI Properties Limited) of an alleged pre-

emptive right in respect of the property in terms of an agreement dated December 1996, pursuant to which the property should be

sold to them on similar terms. We subsequently repudiated our agreement with M5 and notified Rand Leases Properties Limited

that we did not intend offering the property to them. Both parties indicated to us their intentions to institute legal proceedings for

the sale and transfer of the property. On December 12, 2006, Rand Leases Properties Limited issued a summons against us and we

filed an Appearance to Defend. A trial date has been allocated by the High Court of South Africa for April 25, 2008, but the case was

postponed. A new date has not yet been set.

Property

Durban Deep is located within the Central Witwatersrand Basin which stretches from Durban Deep in the west to ERPM in

the east. Durban Deep is situated 9.3 miles (15 kilometers) west of Johannesburg and contains mining title to 14,262 acres (5,772

hectares) and owns 3,667 acres (1,484 hectares) of freehold property. These include administrative buildings, hospital, recreation

complexes, housing in both hostel and free-standing houses and a security complex. We have title to substantial land tracts on the

outskirts of the City of Roodepoort, which is located in this section. We do not intend to convert our rights under the MPRD Act.

Mining and Processing

Five different ore bodies have been mined at Durban Deep. Ore was mined from outcrops at the surface down to a

maximum depth of 9,200 feet (2,804 meters) and the reefs are known to persist to 13,000 feet (3,962.4 meters) below the surface

within the lease area.

Environmental and Closure Aspects

Underground mining at Durban Deep ceased in August 2000. A detailed closure program was prepared and submitted to the

DME in December 2000. The drafting of the program was preceded by a comprehensive risk assessment process, during which both

residual and latent environmental risks and impacts were identified and prioritized. The risks identified are currently being addressed

in accordance with the closure program.

A revised closure program in the required format of the MPRD Act is in the process of being completed.

In order to mitigate the impact of windblown dust from dormant tailings dams in proximity to surrounding communities,

short-term dust suppression methods are currently being employed. In addition to dust suppression, amelioration and vegetation of

the tailings dams, the closure program is also focused on the sealing of shafts and openings to the surface, the demolition and

rehabilitation of shaft infrastructure and the rehabilitation of open surface areas.

Durban Deep is located in the geographical area known as the Central Basin. There is no hydraulic continuity between the

Western Basin and the Central Basin. Underground water is of poor quality, containing heavy metals, sulphates and other pollutants.

The Central Basin water level is being maintained by pumping operations at ERPM, approximately 900 meters below surface.

We developed a program to progressively seal all potential ingress points at Durban Deep. During fiscal 2008, our

rehabilitation and environmental closure efforts continued in pursuit of the objectives of the mine’s Environmental Management

Program. A total of 41 hectares of additional vegetation was established on 2L24 Dump and, with the exception of Circular Shaft, all

previously operational shafts have now been closed and filled. All plugs used have been approved by the DME which also performs

periodic inspections during the sealing phase to monitor progress. However, despite these sealing programs, naturally occurring water

conduits and other geological features which are not mine-related and may not be located on mine property will allow surface water,

especially storm runoff, to reach underground aquifers. This will eventually cause water levels to rise.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we have estimated that the

remaining cost for Durban Deep, in current monetary terms as at June 30, 2008, is R50.7 million. This has been included in the

provision for environmental rehabilitation, restoration and closure costs on the balance sheet. A total of R18.2 million has been

contributed to the Environmental Trust Fund. This is an irrevocable trust, managed by specific responsible people who we nominated

and who are appointed as trustees by the Master of the High Court of South Africa.

West Wits

Overview

We own 100% of West Witwatersrand Gold Holdings Limited, or WWGH, which holds West Witwatersrand Gold

Mines Limited, or West Wits. We acquired the entire share capital of WWGH, as well as Consolidated Mining Corporation Limited's

loan to WWGH, on April 1, 1996. We also acquired the entire issued share capital and the shareholders' claim and loan account of

East Champ d'Or Gold Mine Limited, a gold mining company with mining title in the West Rand. The mining assets were sold to

Bophelo Trading (Pty) Limited, subsequently renamed, Mogale Gold (Pty) Limited, or Mogale, during fiscal 2004, effectively

leading to the closure of the mining operation.

West Wits is situated on the northern edge of the Witwatersrand Basin near the town of Krugersdorp to the west of

Johannesburg.

Property

West Wits was formed out of the northern section of Randfontein Estates located in the West Rand Goldfields, about 22

miles (35 kilometers) west of Johannesburg, Gauteng Province. The mine was reached via the R28 Johannesburg-Krugersdorp

highway.

West Wits also had rights to mine on three adjacent mining leases, namely, East Champ d'Or, West Rand Consolidated and

Luipaardsvlei. West Wits had mining title to 8,364 acres (3,790 hectares) and owned 72 acres (29 hectares) of freehold property on

which all of its mining operations were situated. These rights were sold to Mogale during fiscal 2004.

The climate of the Highveld area (at an elevation of 5,249 feet (1,600 meters) above mean sea level), where the mine is

situated, is humid continental with warm summers and cold winters. Temperatures range from a minimum of 23 degrees

Fahrenheit (-5 degrees Celsius) in June and July to a maximum of 93 degrees Fahrenheit (34 degrees Celsius) in December and

January.

West Wits has entered into an agreement with Randfontein Estates Gold Mines Limited (represented by Harmony Gold) and

Atomaer (Pty) Limited, for the establishment of a regional underground water management vehicle. The ultimate objective of this

initiative is to collectively collect, process and report environmentally sensitive information relating to the impact of underground

water seepage on to surface to DWAF. It has set itself the objective of putting in place the requisite infrastructure and technology to

establish a commercially self-sustainable entity to extract underground water, treat the same and to dispose of it either for commercial

or agricultural use. Representations to DWAF to allow the treatment and disposal of water on commercial terms were favorably

received.

An integrated water management process for this area is important, both from the perspective of optimizing natural water

resources, considering the predominantly dry climate of South Africa, and also from an environmental perspective – a program that

captures and treats underground water before it decants into the Tweelopiesspruit area and the Krugersdorp Game Reserve (which is

just upstream from the Sterkfontein Caves system) is in place. If the above initiatives fail and the ingress of water and the subsequent

flooding into sensitive areas occur, and to the extent that liability is attributed to us, and not only to West Wits, the amounts involved

could be significant.

History

1967

West Wits was incorporated and registered as a public company in South Africa on December 21, 1967.

1996

We acquired the entire share capital of West Wits on April 1, 1996.

2000

All mining ceased at West Wits in August 2000.

2002

We entered into an agreement with Bophelo Trading (Pty) Limited, subsequently renamed Mogale Gold (Pty) Limited, or

Mogale, for the sale of the West Wits gold plant, freehold areas, surface rights permits and certain related assets.

2003

The agreement with Mogale was subsequently amended by a Memorandum of Agreement on June 6, 2003. The

effective date of this sale was July 21, 2003.

2004

Mogale was placed under judicial management on April 13, 2004. As a result, the remaining balance on the purchase

price was impaired for R8.3 million.

2005

West Wits entered into an agreement with Randfontein Estates Gold Mines Limited and Atomaer (Pty) Limited, for the

establishment of a regional underground water management vehicle.

Mining and Processing

In August 2000, we decided to cease all operations at both the underground and open pit operations at West Wits. This

decision was taken after the South African government withdrew the water pumping subsidy. Without the subsidy, mining at West

Wits became prohibitively expensive. The mining operation is an agglomeration of old mines on the Randfontein Basin separated

from the main part of the Witwatersrand Basin by a geological structure known as the Witpoortjie Horst. Over fifteen different gold-

bearing pebble horizons have been mined. Ore has been mined from outcrops at the surface down to a maximum depth of 5,900 feet

(1,798.3 meters).

West Wits mined the Livingston Reef package, locally known as the East Reef. It comprises a 100-foot thick package of

conglomerates and quartzites dipping at an average of 18 degrees. The combined West Wits produced more than 1.0 million ounces

of gold since inception, before the cessation of underground and open-pit operations at the end of August 2000. Subsequent to the

cessation of mining operations, the metallurgical plant at West Wits was taken over by Crown for the processing of sand dumps only.

Environmental and Closure Aspects

Underground mining at West Wits ceased as of August 2000. We are required to affect environmental closure at West Wits

although certain aspects of this have been assumed by Mogale. Commensurate with the decision to close these operations, a detailed

closure program was prepared and submitted to the DME in December 2000. The drafting of the program was preceded by a

comprehensive risk assessment process, during which both residual and latent environmental risks and impacts were identified and

prioritized. The risks identified are currently being addressed by West Wits, in accordance with the closure program submitted to the

DME. In order to mitigate the impact of windblown dust from dormant tailings dams in proximity to surrounding communities, dust

monitoring and mitigating measures are implemented as required. These surface deposits have been purchased by Mogale, who are

actively prospecting to determine mining potential and are therefore not being vegetated at present.

Shaft rehabilitation is continuing. This will in effect reduce the ingress of surface water to the groundwater system.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we have estimated that the

remaining cost for West Wits, in current monetary terms as at June 30, 2008, is R4.5 million. This has been included in the provision

for environmental rehabilitation, restoration and closure costs on the balance sheet. A total of R15.7 million has been contributed to

the Environmental Trust Fund. This is an irrevocable trust, managed by specific responsible people who we nominated and who are

appointed as trustees by the Master of the High Court of South Africa.

Legal Proceedings

Invalid Issuance of Ordinary Shares in Connection with the Rawas Acquisition and other related legal proceedings

During the months of July and October of 1999, we issued and allotted a total of 8,282,056 ordinary shares to Rothschild

Nominees Pty Limited, Maxidrill Pty Limited, PT Petrosea TBK, Repadre International Corporation, Minproc Engineering

Pty Limited, Rio Tinto Rawas Holdings Limited, Continental Goldfields Limited, Consolidated African Mines Limited, JCI (Isle of

Man) Limited, Weston Inv. Limited and Consolidated African Mines Australia Pty Limited, all of which were creditors of Laverton

or Laverton subsidiaries, below the average stated capital price. At the time, our then executive chairman, Mr. R.A.R. Kebble, was a

director of Laverton Gold NL and JCI Gold Limited. These ordinary shares were ostensibly issued pursuant to the planned

acquisition of Rawas, a gold mine located in Indonesia, in consideration for, or in anticipation of receiving, shares in and claims

against various companies with ownership interests in Rawas and its mining rights. Evidence came to light revealing that the ordinary

shares were issued without our legal authority and suggesting that this occurred as a result of a transaction entered into for the benefit

of certain third parties. However, because of subsequent trades, splits and consolidations, it was no longer possible to distinguish the

affected shares from all our other ordinary shares and therefore it was no longer possible to identify the invalidly issued shares or

their holders. Accordingly, it was not possible to remove these invalidly issued shares from our members' register. Under the South

African Companies Act, 1973 (as amended), the High Court of South Africa is permitted to validate an invalid share issuance. During

a shareholders' meeting in 2002, our shareholders, by special resolution, resolved to ratify the share issuance. We subsequently made

an application to the High Court of South Africa to validate the invalid issuance. This application was successful and the High Court

validated the issuance in July 2002.

We did not institute any actions against the recipients of our shares in this transaction as each of these entities had ceded to

us their claims against the companies in the Rawas group in exchange for those shares. In July 2003, we, DRD Australia Pty Limited

and DRD Australasia Aps instituted action in the High Court of South Africa, against Messrs. R.A.R. Kebble, M. Prinsloo, J. Stratton

and H. C. Buitendag and JCI Limited. Subsequently the claim was withdrawn against M. Prinsloo. The following claims were

pursued:

• R69.6 million for the 7,644,944 ordinary shares issued on July 9, 1999, at a price per share of R9.10; and

• R7.6 million for the 637,062 ordinary shares issued on October 8, 1999, at a price per share of R11.90.

We instituted a separate action in Australia on the December 12, 2003 against Mr. C. Mostert, Mr. J. Stratton, Continental

Gold Fields Limited, CAM Australia, (Pty) Limited, Weston Investments (Pty) Limited, CAM Jersey Limited, and JCI (Isle of Man)

Limited for:

• R67,942 being the costs of issuing our shares;

• R77.0 million being profits made by third parties who were issued our shares at the time; and

• R4.7 million being costs incurred to validate the shares invalidly issued.

The Supreme Court of Western Australia ordered all parties to submit to mediation of their disputes, which was held during

December 2006. The mediation per se did not result in any settlement. The background to these matters is as follows:

• On June 12, 2002, DRD Australasia Aps and DRD Australia Pty Limited instituted proceedings against Mr. J. Stratton in the

Supreme Court of Western Australia for payment of A$3.3 million plus interest in respect of dishonestly assisting

Mr. C. Mostert in making payments referred to below and receiving part of the proceeds of these wrongful actions.

• On May 3, 2003, DRD Australasia Aps instituted proceedings against Mr. C. Mostert, Newshore Nominees (Pty) Limited

and Mr. R. Bryer in the Supreme Court of Western Australia for payment of A$378,000 in respect of undue payments made

to Newshore Nominees (Pty) Limited.

• On June 7, 2002, we instituted action against Mr. C. Mostert, Mr. J. Stratton, Advent Investors (Pty) Limited, Leadenhall

Australia Limited, Noble Investments (Pty) Limited and Mr. T. Lebbon for unauthorized and undue payment of A$5.9

million in connection with the purchase of 11,150,000 shares, of Continental Goldfields Limited, a publicly traded company

in Australia.

Mr. M. Silver and Fairchoice Limited brought an action against us and Dome in the Supreme Court of New South Wales,

Australia seeking to enforce a contract under which Dome agreed to pay, and we agreed to guarantee, a payment of $475,000 to

Mr. M. Silver upon his retirement from the board of directors of Dome. Mr. M. Silver retired from Dome's board of directors in

May 2000. The contract was also entered into in May 2000. However, we believe that this contract is not enforceable as it was not

authorized by our directors or shareholders nor was it authorized by Dome's directors or shareholders. Therefore, we and Dome have

not made any payment to Mr. M. Silver. On June 29, 2007 judgment was delivered by the Supreme Court of New South Wales in

favor of Mr. M. Silver for payment of an amount of A$780,000.

On May 20, 2003, a summons was issued by our former chairman, Mr. R.A.R. Kebble and his son, Mr. B. Kebble, against

us, our then executive chairman, Mr. M.M. Wellesley-Wood and Associated Intelligence Network (Pty) Limited, or AIN. AIN is a

private investigator firm. Their claim was based on allegations that we hired AIN to invade their privacy by obtaining personal

information about them and to cause them embarrassment and commercial harm. They were seeking compensation for damages

suffered as a result of these alleged actions in an amount of R1.0 million each from us, Mr. M.M. Wellesley-Wood and AIN jointly

and severally. In addition, they were seeking punitive damages in a total amount of R10.0 million from us and AIN jointly and

severally. The punitive damages claim is unique under South African law. Initial hearings have taken place to decide a preliminary

point raised by us that no such claim exists in South African law. The court ruled against us on a technicality, making a ruling to the

effect that the trial court should hear and adjudicate this issue.

On May 22, 2003, we issued a summons in the High Court of Johannesburg against Mr. R.A.R. Kebble in which we sought

payment of R3.2 million plus interest. This amount represented a sum paid to Mr. R.A.R. Kebble by us during the period beginning

in September 1999, and ending in April 2000, under a restraint of trade agreement entered into between us and Mr. R.A.R. Kebble.

We believe that Mr. R.A.R. Kebble had repudiated and/or materially breached the provisions of this agreement. We have,

accordingly, cancelled the agreement and we were seeking restitution of the amounts paid. Mr. R.A.R. Kebble had lodged a

counterclaim, claiming cancellation of an agreement providing for the payment of retirement benefits, and challenging the

cancellation of share-options that he held at the time of his resignation from the our board.

On September 16, 2008 a Deed of Settlement was signed by the parties in terms of which the above actions were

compromised, settled and withdrawn on the basis that JCI Limited shall pay us an amount of R25.0 million in respect of capital and

interest and R0.5 million as a contribution towards costs. We received the amount of R25.5 million in September 2008. However, T

Lebbon, R Bryer and their companies were not parties to the Deed of Settlement.

Application to reverse the granting of a mining right

In June 2008, we and Durban Roodepoort Deep (Pty) Limited (DRD) brought an application in the High Court of South

Africa against Main Reef Crushers CC (MRC) and the Minister of Minerals and Energy because inter alia the latter granted MRC a

mining right:

• in respect of an old waste rock dump which is not regulated by the MPRDA and therefore the right was unlawfully granted;

• over an area in which DRD had already been granted a prospecting right which gives DRD the exclusive right to apply for a

mining right in terms of the MPRDA; and

• the Environmental Impact Assessment and the Environmental Management Program submitted by MRC are fatally

defective.

LSawsuit by French Shareholders

In August 2008, the Company received by post a summons issued in the “Tribunal De Grande Instance [District Court] of

Paris” by the Association for the Defense of the Shareholders of East Rand (“the Association”) against DRDGOLD SA.

The claim is based on the following allegations:

that the members of the Association were shareholders of ERPM;

• that the non-audited ERPM results of the six-month period from July to December 1998 were misleading regarding

the ‘healthiness’ of ERPM prior to its winding up in 1999;

• that the 1999 liquidation of ERPM was fraudulently approved by 15% of shareholders who were representatives of

the South African state against the interests of French shareholders;

•

that the subsequent scheme of arrangement to remove ERPM from liquidation in 1999 was approved by 15% of

shareholders without consultation of French shareholders.

On the basis of these allegations, the Association is claiming a payment of 5 million Euros for damages, 10 000 Euros for

costs and costs of suit. We are in the process of preparing a defense against this action.

Competition tribunal case

On September 23, 2002, we and Harmony Gold Mining Company Limited, another South African gold mining company,

filed a complaint with the South African Competition Commission against Mittal Steel (previously Iscor), a South African steel

producer. The complaint alleges that Mittal Steel is abusing its dominant position by charging excessive prices for its local flat steel

products and providing inducements for steel purchasers to refrain from importing competing steel products. The Competition

Commission dismissed our claim, and the matter has since been referred to the Competition Tribunal, who has the authority to

overrule the determination of the commission. On the March 27, 2007 the Competition Tribunal delivered its judgment in terms of

which the Tribunal made the following findings:

• that Mittal Steel has abused its dominant position by engaging in excessive pricing; and

• that Mittal Steel did not induce customers not to deal with its competitors.

On September 6, 2007, the Competition Tribunal imposed an administrative penalty of R691.8 million against Mittal Steel.

Mittal Steel filed its Notice of Appeal with the Competition Appeal Court challenging the decision of the Competition Tribunal. The

hearing of the appeal took place on October 23 and 24, 2008 and judgment has been postponed.

Litigation regarding environmental issues

On August 2, 2006 and September 4, 2006, two virtually identical applications were brought against the Company and its

directors for relief under the MPRDA, by the Legal Resources Centre on behalf of the residents of two communities, Davidsonville

and Kagiso, who reside adjacent to tailings deposition sites of the now dormant Durban Deep mine, and at West Wits mine,

respectively. Whilst no financial compensation is sought, the communities are seeking orders for the revision of the EMPs of both

sites, and for the sites to be rehabilitated and closed in accordance with the standards of the MPRDA. Whilst we are challenging the

sustainability of the legal basis on which the claims have been brought, as well the extent of the relief sought we have:

• in respect of the Davidsonville action, accelerated certain rehabilitation measures which would effectively address dust

issues; and

• in respect of the Kagiso action, engaged the new owners of deposition sites, Mogale. Mogale recognize these tailings as an

inferred resource and in collaboration with us implement interim dust suppression measures pending their receipt of

prospecting and mining permits for these sites.

The settlement negotiations have not been successful. We have filed our answering affidavits and are awaiting the

Applicants’ replying affidavits.

Legal proceedings relating to an agreement to sell Durban Deep’s mine village

We concluded an agreement with M5 on July 21, 2005, pursuant to which M5, against payment of a non-refundable fee of

R1.5 million, was granted an option to acquire Durban Deep’s mine village for R15.0 million. On November 18, 2005, M5 exercised

the option and provided a guarantee for payment. Prior to the registration of the transfer occurring, we were notified by Rand Leases

Properties Limited (formerly JCI Properties Limited) of an alleged pre-emptive right in respect of the property in terms of an

agreement dated December 1996, pursuant to which the property should be sold to them on similar terms. We subsequently

repudiated our agreement with M5 and notified Rand Leases Properties Limited that we did not intend offering the property to them.

Both parties indicated to us their intentions to institute legal proceedings for the sale and transfer of the property. On

December 12, 2006, Rand Leases Properties Limited issued a summons against us and we filed an Appearance to Defend. On April

25, 2008 the case was postponed by the High Court. A new date has not yet been set.

ITEM 4A. UNRESOLVED STAFF COMMENTS

not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following Operating and Financial Review and Prospects section is intended to help the reader understand the factors

that have affected the Company's financial condition and results of operations for the historical period covered by the financial

statements and management's assessment of factors and trends which are anticipated to have a material effect on the Company's

financial condition and results in future periods. This section is provided as a supplement to, and should be read in conjunction

with, our audited financial statements and the other financial information contained elsewhere in this Annual Report. Our financial

statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the

International Accounting Standards Board (IASB). Our discussion contains forward looking information based on current

expectations that involve risks and uncertainties, such as our plans, objectives and intentions. Our actual results may differ from

those indicated in such forward looking statements.

The Operating and Financial Review and Prospects include the following sections:

• Operating results:

Business overview, a general description of our business.

Key drivers of our operating results and principal factors affecting our operating results, a general description of the

principal uncertainties and variables facing our business and the primary factors that have a significant impact on our

operating performance.

Recent acquisitions and dispositions, a description of the recent acquisitions and other transactions that have

impacted, or will impact, our performance.

Key financial and operating indicators, a presentation of the key financial measures we use to track our operating

performance.

Application of critical accounting policies, a discussion of accounting policies that require critical judgments and

estimates.

Operating results, an analysis of our consolidated results of operations during the three fiscal years presented in our

financial statements. The analysis is presented both on a consolidated basis, and by geographic segment.

• Liquidity and capital resources, an analysis of our cash flows, borrowings and our anticipated funding requirements and

sources.

• Outlook and trend information, a review of the outlook for, and trends affecting, our business.

• Off-balance sheet arrangements.

• Tabular disclosure of contractual obligations, being the numerical review of our contractual future cash obligations.

5A. OPERATING RESULTS

Business overview

We are a South African gold mining company engaged in underground and surface gold mining, including exploration,

extraction, processing and smelting. We have operations comprising underground and surface retreatment operations, including

the requisite infrastructure and metallurgical processing plants. Our operations are currently located in South Africa, but during

fiscal 2008 we also had operations in Papua New Guinea, which were sold.

During the fiscal years presented in this Annual Report we divide our worldwide operations into two geographic regions,

based on revenue generated from the location of the seller, as follows:

• South Africa comprising the deep-level Blyvoor and ERPM operations, in addition to the surface retreatment operations

at Crown and the Ergo and Elsburg Joint Ventures (“South African Operations”).

• Australasia comprising Tolukuma and a 20% interest in the unincorporated Porgera Joint Venture, or Porgera

(“Australian Operations”). On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and

on October 22, 2007, we sold our entire shareholding in Emperor, which includes Tolukuma, to several institutional

investors.

In fiscal 2008, the South African Operations accounted for 96% of our total production and a R141.2 million net profit

after tax. The Australasian Operations accounted for 4% of our total production and a net loss after tax of R85.3 million.

Exploration activities are undertaken only in South Africa

From 1895 to 1997, our principal mining operation was the Durban Deep mine. Up to 1999, our general growth strategy

was to acquire existing under-performing mines in South Africa at relatively low acquisition costs, and turn them into profitable

business units by introducing low-cost mining methods and reducing costs through employing our experience in managing

marginal gold mines to more efficiently utilize existing infrastructures. From 1999 to 2006 our focus was to expand our operations

outside of South Africa by acquiring lower cash cost and higher margin mines than those in South Africa, through the acquisition

of Tolukuma, our 20% interest in Porgera and our 78.9% interest in Emperor (Vatukoula). With the recent exit from our

Australasian operations our strategy has now changed to refocus on our operations in South Africa and in particular on the

expansion of our surface retreatment operations. We are currently using the proceeds we received from the disposal of our

Australasian operations to stabilize our mature underground mining operations, to expand our retreatment of surface tailings to

recover gold, and to pursue our program of brownfields exploration in South Africa.

An increase in revenue from our continuing operations, mainly due to a higher gold price, and a profit arising from the

disposal of our discontinued operations has resulted in an improvement of our results for fiscal 2008 in comparison to fiscals 2007

and 2006. We had R846.1 million in cash and cash equivalents as at June 30, 2008, primarily as a result of the disposal of our

Australasian Operations, and we are able to fund our short- and medium term projects from this cash.

As at June 30, 2008, we had Ore Reserves of approximately 4.5 million ounces, compared to 4.8 million ounces as at

June 30, 2007. The decrease in our Ore Reserves was primarily as a consequence of depletion and the discontinued operations in

Australasia.

Key drivers of our operating results and principal factors affecting our operating results

The principal uncertainties and variables facing our business and, therefore, the key drivers of our operating results are:

• The price of gold, which fluctuates widely in Rands;

• The tonnages and gold content thereof, impacting on the amount of gold we produce at our operations;

• The cost of producing that gold as a result of mining efficiencies; and

• General economic factors, such as exchange rate fluctuations and inflation, and factors affecting mining operations

particularly in South Africa.

Gold price

Our revenues are derived primarily from the sale of gold produced at our mines. As a result, our operating results are

directly related to the price of gold which can fluctuate widely and is affected by numerous factors beyond our control, including

industrial and jewellery demand, expectations with respect to the rate of inflation, the strength of the Dollar (the currency in which

the price of gold is generally quoted) and of other currencies, interest rates, actual or expected gold sales by central banks, forward

sales by producers, global or regional political or economic events, and production and cost levels in major gold-producing

regions such as South Africa. In addition, the price of gold sometimes is subject to rapid short-term changes because of

speculative activities. The demand for and supply of gold may affect gold prices, but not necessarily in the same manner that

supply and demand affect the prices of other commodities. The supply of gold consists of a combination of new production from

mining and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial

organizations and private individuals. As a general rule we sell the gold produced at market prices to obtain the maximum benefit

from prevailing gold prices.

The following table indicates the movement in the Dollar gold spot price for the 2008, 2007 and 2006 fiscal years:

2008 fiscal year

2007 fiscal year

% change

Opening gold spot price on July 1, ..................................

$651 per ounce

$599 per ounce

Closing gold spot price on June 30, .................................

$930 per ounce

$651 per ounce

43%

Lowest gold spot price during the fiscal year ..................

$648 per ounce

$561 per ounce

16%

Highest gold spot price during the fiscal year..................

$1,011 per ounce

$691 per ounce

46%

Average gold spot price for the fiscal year ......................

$821 per ounce

$638 per ounce

29%

2007 fiscal year

2006 fiscal year

% change

Opening gold spot price on July 1, ..................................

$599 per ounce

$437 per ounce

37%

Closing gold spot price on June 30, .................................

$651 per ounce

$599 per ounce

Lowest gold spot price during the fiscal year ..................

$561 per ounce

$418 per ounce

34%

Highest gold spot price during the fiscal year..................

$691 per ounce

$726 per ounce

-5%

Average gold spot price for the fiscal year ......................

$638 per ounce

$526 per ounce

21%

2006 fiscal year

2005 fiscal year

% change

Opening gold spot price on July 1, ..................................

$437 per ounce

$396 per ounce

10%

Closing gold spot price on June 30, .................................

$599 per ounce

$437 per ounce

37%

Lowest gold spot price during the fiscal year ..................

$418 per ounce

$387 per ounce

Highest gold spot price during the fiscal year..................

$726 per ounce

$454 per ounce

60%

Average gold spot price for the fiscal year ......................

$526 per ounce

$421 per ounce

25%

A significant upward trend in the Dollar gold price has been noted over the past four fiscal years. Our production has

been sourced from our South African Operations and Australasian Operations, therefore during those four fiscal years the impact

of the relevant exchange rates has been significant on our operating results. The average gold price in Rand and Australian Dollars

has shown the following movements:

Rand gold price (based on average prices for the year) increased from R3,377 per ounce, in fiscal 2006, to R4,605

per ounce in fiscal 2007 (a 36% increase from fiscal 2006) and R6,003 per ounce in fiscal 2008 (a 30% increase

from fiscal 2007).

• Australian gold price (based on average prices for the year) increased from A$705 per ounce, in fiscal 2006, to

A$812 per ounce in fiscal 2007 (a 15% increase from fiscal 2006) and A$914 per ounce in fiscal 2008 (13%

increase from fiscal 2007).

Based on our latest forecast gold price of R246,326 for fiscal 2009, a 10% increase in the Rand gold price received will

increase our forecast profit after taxation by R184.2 million and a 10% decrease in the Rand gold price received will decrease our

profit after taxation by R153.6 million.

Gold production and operating costs

Attributable gold production from our continuing operations totaled 308,005 ounces during fiscal 2008, in comparison to

334,496 ounces in fiscal 2007, and 315,976 ounces in fiscal 2006. Our discontinued operations (comprising Tolukuma, Porgera,

Vatukoula and the North West Operations) recorded production of 13,427 ounces in fiscal 2008, 142,661 ounces in fiscal 2007

and 211,425 ounces in fiscal 2006.

Our costs and expenses consist primarily of operating costs, royalties and depreciation. Operating costs include labor,

contractor services, stores, electricity and other related costs, incurred in the production of gold. Labor is the largest component of

operating costs, constituting 41% of operating costs for fiscal 2008, as the majority of our mining operations are deep level

underground mines which are more labor intensive.

At our continuing South African Operations, production decreased from 334,496 ounces in fiscal 2007, produced from

14.8 million tonnes milled at an average yield of 0.70g/, to 308,005 ounces in fiscal 2008, produced from 14.8 million tonnes

milled at an average yield of 0.65g/t. Production increased from 315,976 ounces in fiscal 2006, produced from 12.3 million tonnes

milled at an average yield of 0.80g/t, to 334,496 ounces in fiscal 2007. During fiscal 2008, the average Rand gold price

strengthened by 30%, creating an opportunity to mine ore grades that were previously seen to be unprofitable

Blyvoor produced 141,172 ounces from 4.4 million tonnes milled at an average yield of 1.00g/t in fiscal 2008, in

comparison with 151,269 ounces from 4.4 million tonnes milled at an average yield of 1.07g/t in fiscal 2007 and 159,693 ounces,

produced from 4.3 million tonnes milled at an average yield of 1.15g/t in fiscal 2006. The decrease in production at Blyvoor

resulted from lower grades being mined due to a decision taken to move out of seismically active areas.

Crown produced 87,354 ounces from 8.2 million tonnes milled at an average yield of 0.33g/t in fiscal 2008, in

comparison with 103,011 ounces from 8.4 million tonnes milled at an average yield of 0.38g/t in fiscal 2007 and 75,959 ounces,

produced from 6.2 million tonnes milled at an average yield of 0.38g/t in fiscal 2006. The lower grade at Crown reflects

diminishing reserves of higher grade material available, which resulted in lower production.

ERPM produced 79,479 ounces from 2.2 million tonnes milled at an average yield of 1.14g/t in fiscal 2008, in

comparison with 80,216 ounces from 2.0 million tonnes milled at an average yield of 1.23g/t in fiscal 2007 and 80,324 ounces,

produced from 1.8 million tonnes milled at an average yield of 1.37g/t in fiscal 2006. The decrease in production at ERPM also

resulted from lower grades being mined.

General economic factors

As at October 31, 2008, all our operations are in South Africa and we are exposed to a number of factors, which could

affect our profitability, such as exchange rate fluctuations, inflation and other risks relating to South Africa. In conducting mining

operations, we recognize the inherent risks and uncertainties of the industry, and the wasting nature of the assets.

Effect of exchange rate fluctuations

For the year ended June 30, 2008, approximately 95% of our total revenues were generated from South African

Operations, and approximately 5% of our total revenues were generated from our Australasian Operations. In fiscal 2008, most of

our operating costs were denominated in Rand and we derived all of our revenues in Dollars. Fiscal 2008 was marked by volatility

in the Dollar and an overall weakening in the Rand-Dollar exchange rate. As the price of gold is denominated in Dollars and we

realize our revenues in Dollars, the depreciation of the Dollar against the Rand reduces our profitability, whereas the appreciation

of the Dollar against the Rand increases our profitability. Based upon average rates during the respective years, the Rand

weakened by 1% against the Dollar in fiscal 2008, compared to fiscal 2007 and weakened by 12% in fiscal 2007 compared to

fiscal 2006. This has led to an increase of 30% in the average Rand gold price in fiscal 2008 and an increase of 36% in fiscal

2007.

As an unhedged gold producer we do not enter into forward gold sales contracts to reduce our exposure to market

fluctuations in the Dollar gold price or the exchange rate movements. If revenue from gold sales falls for a substantial period

below our cost of production at our operations, we could determine that it is not economically feasible to continue commercial

production at any or all of our operations or to continue the development of some or all of our projects. Our weighted average cash

costs per kilogram for our continuing operations was R156,891 per kilogram of gold produced in fiscal 2008, R126,406 per

kilogram of gold produced in fiscal 2007 and R101,362 per kilogram of gold produced in fiscal 2006. The average gold price

received, from continuing operations, was R192,472 per kilogram of gold produced in fiscal 2008, R147,516 per kilogram of gold

produced in fiscal 2007 and R112,665 per kilogram of gold produced in fiscal 2006.

Effect of inflation

In the past, our operations have been materially adversely affected by inflation. As we are unable to control the prices at

which our gold is sold, if there is a significant increase in inflation in South Africa, without a concurrent devaluation of the local

currency or an increase in the price of gold, our costs will increase, negatively affecting our operating results.

The local annual inflation rate for the periods presented, as measured by the South African Consumer Price Index, or

CPIX, are set out in the table below:

ear ended June 30,

2008

(%)

2007

(%)

2006

(%)

CPIX (inflation rate) ......................................................................................................................

11.6

6.4

4.3

The South African CPIX inflation rate increased significantly in fiscal 2008 and as at October 31, 2008, it was at 13%.

South African political, economic and other factors

We are a South African company and subsequent to the sale of our stake in Emperor all our operations are based in South

Africa. As a result, we are subject to various economic, fiscal, monetary and political factors that affect South African companies

generally. South African companies are subject to exchange control regulations. Governmental officials have from time to time

stated their intentions to lift South Africa’s exchange control regulations when economic conditions permit such action. Over the

last few years, certain aspects of exchange controls for companies and individuals have been incrementally relaxed. It is, however,

impossible to predict when the South African Government will remove exchange controls in their entirety. South African

companies remain subject to restrictions on their ability to export and deploy capital outside of the Southern African Common

Monetary Area, unless dispensation has been granted by the South African Reserve Bank. For a detailed discussion of exchange

controls, see Item 10D.: “Exchange controls.”

On May 1, 2004, the MPRD Act became effective. Prior to the introduction of the MPRD Act, private ownership in

mineral rights and statutory mining rights in South Africa could be acquired through the common law or by statute. Now, all

mineral rights have been placed under the custodianship of the South African government under the provisions of the MPRD Act,

and old order proprietary rights need to be converted to new order rights of use within certain prescribed periods. We have

submitted certain applications in this regard. This process is described more fully under Item 4B.: “Business Overview –

Governmental regulations and their effects on our business - South Africa – Common Law Mineral Rights and Statutory Mining

Rights.”

The MPRD Act makes reference to royalties being payable to the South African government in terms of the Royalty Bill.

The fourth draft of the Royalty Bill was promulgated in Parliament on August 14, 2008 and provides for the payment of a royalty

according to a formula based on earnings before interest, tax and after the deduction of capital expenditure. This rate is then

applied to revenue to calculate the royalty amount due, with a minimum of 0.5% and a maximum of 5% for gold. It is estimated

that the formula could translate to a royalty rate of more than 2% of revenue in terms of current pricing assumptions. The latest

proposal results in a large increase from the 1.5% rate proposed in the second draft in 2006. The royalty is to become effective on

May 1, 2009, if the Royalty Bill is passed by Parliament in its current form.

Recent acquisitions and dispositions

The global gold mining industry has experienced active consolidation and rationalization activities in recent years.

Accordingly, we have been, and may continue to be, involved in acquisitions and dispositions as part of this global trend and to

identify value-adding business combinations and acquisition opportunities. To ensure that our Ore Reserve base is maintained, or

increased, we are currently focusing on organic growth from our existing operations and brownfields exploration in South Africa.

The following is a description of acquisitions and dispositions completed by us since July 1, 2005:

DRDGOLD SA

On July 6, 2005, we signed a Memorandum of Understanding with Khumo Bathong Holdings (Pty) Limited, or KBH,

regarding the acquisition by Khumo Gold of a 15% stake in our South African Operations. The purpose of the transaction was to

bring us into full compliance with the 10-year, 26% black economic empowerment equity requirement as stipulated in the Mining

Charter of South Africa.

On July 20, 2005, we acquired from the IDC, all the debt which it held against Crown and ERPM for a consideration which

was settled through the issue of 4,451,219 of our ordinary shares, which at the date of issue, represented approximately

R28.9 million.

On October 27, 2005, our board of directors approved the extension of our existing black economic empowerment structure

with Khumo Gold to cover all of our South African assets. The transaction was facilitated by the Industrial Development Corporation

of South Africa, or IDC, which agreed to a debt restructuring in Crown. The new structure resulted in Khumo Gold acquiring,

initially, a 15% interest in a newly created vehicle, DRDGOLD SA, which holds a 100% interest in ERPM, Crown and Blyvoor. We

initially retained an 85% interest.

On November 18, 2005, we subscribed for R31.8 million new Khumo Gold preference shares. The proceeds from these

preference shares were used by Khumo Gold to settle an existing loan to KBH of R7.9 million, subscribe for R4.1 million new

preference shares in ERPM, subscribe for R2.7 million new preference shares in Crown, subscribe for R3.9 million new preference

shares in Blyvoor and subscribe for an initial 15% of the issued ordinary shares in DRDGOLD SA for R13.2 million. Khumo Gold

was granted an option, exercisable over three years, to acquire a further 11% interest in DRDGOLD SA for a cash consideration of

R9.3 million. This further equity tranche included a 6% stake to be placed in a new employee trust.

On December 11, 2006, Khumo Gold exercised the option and acquired from us a further 50,000 ordinary shares in

DRDGOLD SA for a total cash consideration of R4.3 million. After exercising the option, Khumo Gold's shareholding in

DRDGOLD SA increased to 20%. In addition, Khumo Gold, as promoter for an employee trust, exercised the option for an

employee trust to acquire from us 60,000 ordinary shares in DRDGOLD SA for a consideration of R5.1 million. After exercising

the option, the trust's shareholding in DRDGOLD SA is 6%. Furthermore, Khumo Gold and the employee trust subscribed for

R11.2 million new preference shares in ERPM, subscribed for R1.7 million new preference shares in Crown and subscribed for

R2.7 million new preference shares in Blyvoor. We financed the transaction through the subscription of a further R11.4 million

preference shares in Khumo Gold and by extending a loan to the employee trust of R13.6 million.

Emperor

On November 16, 2005, we concluded a sale and purchase agreement with Emperor pursuant to which, on April 6, 2006,

Emperor acquired our wholly owned subsidiary, DRD (Isle of Man) Limited, or DRD (Isle of Man), which in turn held our PNG

assets, comprising the 20% interest in the Porgera Joint Venture, the 100% interest in Tolukuma Gold Mines Limited and all of our

exploration tenements in PNG. The purchase consideration of $237.3 million was subject to certain completion adjustments to reflect

the change in the capital position of both Emperor and DRD Isle of Man between October 1, 2005, which was the effective date, and

April 6, 2006, the date that the transaction was completed. The purchase consideration included 751,879,699 new Emperor shares

issued to DRD (Offshore) Limited, or DRD (Offshore), and a cash consideration of $37.3 million payable to DRD (Offshore). After

the issue of the new Emperor shares, we held 88.3% of Emperor. Subsequently, our shareholding was diluted to 78.7%, following a

number of share issues in which we did not participate.

In April 2006 Vatukoula implemented the new Accelerate Development and Training Program, or ACDTP, which

involved a temporary shutdown of the mine on April 20, 2006 and a gradual start-up early in June 2006. The ACDTP was

designed to introduce flexibility to production areas, improve infrastructure and increase the productivity of the workforce. The

plan included development of higher grade areas at Philip Shaft and upgrading of associated shaft infrastructure. In addition, the

entire workforce was to undergo comprehensive assessment, reskilling and retraining.

On October 14, 2006, a serious incident involving a mine shaft conveyance occurred in the Philip Shaft at the Vatukoula

mine when, during testing of the shaft conveyance following maintenance, a skip-cage fell down the shaft, causing damage to the

surface winder mechanism. The Philip Shaft was closed following the incident, while investigations and repairs were undertaken.

Production at Philip Shaft recommenced on November 14, 2006.

On December 5, 2006, after an extensive three-month review of Vatukoula, we determined that continued mining

operations at Vatukoula were no longer economically viable and that the mine would therefore cease production. Pending

completion of a strategic review to optimize the value of Vatukoula and other Fijian land holdings, the mine was placed on a care

and maintenance program. On March 28, 2007, Emperor sold all its Fijian assets, including the Vatukoula Mine to Westech Gold

(Pty) Limited, a private company incorporated in Australia, for A$1.00. Under the agreement, Emperor sold 100% of its shares in

its Australasian subsidiaries (Emperor Finance Limited and Emperor Australia Limited) which in turn owned the Fijian assets.

On July 27, 2007, DRDGOLD shareholders at a general meeting approved the disposal by Emperor of its 20% interest in

the Porgera Joint Venture to a subsidiary of Barrick for a purchase consideration of $250.0 million and the grant of an option to

Barrick or its nominee to subscribe for 153,325,943 shares in Emperor. Emperor shareholders also approved the disposal and a capital

distribution of A$0.05 per Emperor share to Emperor shareholders by way of a capital return out of the surplus cash realized from the

disposal, at a general meeting held on July 30, 2007. The sale transaction was completed on August 17, 2007, for a final cash

consideration of R1.9 billion ($255.0 million), which included interest, and subsequently Emperor retired all its debt facilities. The

capital distribution was completed on September 3, 2007.

On October 22, 2007, we sold our entire interest in Emperor for R355.8 million (A$55.9 million) to 26 institutional investors
with each acquired between 0.4% and 21.6% of the shares.

Top Star Dump

On August 28, 2006, we concluded an agreement with Anglo Gold Ashanti to purchase the remaining extent of Erf 1 Park

Central Township, better known as The Top Star Dump in central Johannesburg for an amount of R8.0 million. In addition, a further

R28.4 million was spent on the infrastructure required to process the dump. The Top Star Dump has been evaluated geostatistically

by us and reviewed independently by Coffey Mining and has a probable reserve of 5.2 Mt, at a grade of 0.775 g/t.

On August 30, 2006, the Provincial Heritage Resources Authority of Gauteng, or PHRAG, published a notice in the

Gauteng Provincial Gazette in terms of which the dump was provisionally protected for a period of two years. We lodged an appeal

against the decision to issue the protection order, and on October 30, 2007 the PHRAG withdrew the protection order.

On August 21, 2008 a Mining Right was granted for gold recovery over the Top Star Dump, in favor of Crown by the

Department of Minerals and Energy with effect from August 21, 2008. The mining right for the Top Star Dump has been granted

until August 20, 2013.

Ergo and Elsburg Joint Ventures

On June 7, 2007, we and Mintails announced the formation of the Ergo Joint Venture between Mintails SA and DRDGOLD

SA. Following discussions initiated in the first quarter of 2007, the Ergo Joint Venture parties agreed to pursue a strategy to

consolidate certain of their assets on the East Rand. Mintails SA contributed one fully refurbished carbon-in-leach, or CIL, circuit at

the Brakpan plant and DRDGOLD SA contributed the Elsburg tailings complex, comprising approximately 180 Mt of tailings. This

part of the project, previously referred to as Phase 1 of the Ergo Joint Venture, was subsequently established under the Elsburg Gold

Mining Joint Venture, or Elsburg Joint Venture. Mintails SA and DRDGOLD SA, through their subsidiaries, initially owned 50% of

the Elsburg Joint Venture and the Ergo Joint Venture.

On August 6, 2007, the parties to the Ergo Joint Venture entered into a sale of assets agreement with Anglo Gold Ashanti

pursuant to which it acquired the remaining moveable and immovable assets of Ergo for a consideration of R42.8 million. These

assets will be operated by the Ergo Joint Venture for its own account, under the Anglo Gold Ashanti authorizations, until new order

mining rights have been obtained. These assets, comprising servitudes (access agreements), infrastructure, piping, equipment, old

order mining rights and the right to an additional 15 Mt of tailings material, provide a platform to consolidate these tailings assets

with the Elsburg tailings.

On November 26, 2007, we announced that DRDGOLD SA signed a binding term sheet with Mintails SA, which provided

for significant expansion of the joint venture through:

• the planned refurbishment of all infrastructure at the Brakpan plant, to increase capacity from one CIL gold recovery circuit

to a plant capable of processing tailings for the recovery of gold, uranium and sulphuric acid; and

• substantially increasing available tailings material from 180 Mt to up to 1,700 Mt, by securing rights over tailings dumps

and slimes dams in the region.

Additional agreements were concluded on November 14, 2007 for:

• the acquisition by the Ergo Joint Venture of additional tailings properties and the Withok deposition complex from Anglo

Gold Ashanti for a payment of R45.0 million and assumption of rehabilitation obligations; and

• the acquisition by Mintails SA of an option to acquire tailings properties (the Grootvlei Properties), comprising some

105 Mt, from Pamodzi Gold Limited. The Grootvlei properties form part of the Mintails SA contribution to the expanded

Ergo Joint Venture.

The acquisition of the Withok deposition site provides the expanded Ergo Joint Venture with considerable additional

deposition capacity commensurate with the substantial increases in capacity for tailings material and processing. The expanded Ergo

Joint Venture is conducting a feasibility study, which is expected to be completed in the final quarter of calendar 2009, to refurbish

and reopen the full Brakpan plant, which historically produced gold, uranium and sulphuric acid

Phase 1 of the expanded Ergo Joint Venture involves the refurbishment of one CIL circuit at the Brakpan plant with the

capacity to treat an estimated 15Mt of tailings a year, for the recovery of some 75,000 ounces of gold a year. Phase 2, for which we

are currently completing a feasibility study, envisages the expansion of the gold plant by refurbishing the second CIL circuit and

developing uranium and acid plants. The expanded Ergo Joint Venture is managed by Crown, which has treated more than 200Mt of

sand and slime and produced approximately 2.8 million ounces of gold through its plants.

On September 29, 2008, DRDGOLD SA acquired a further 15% interest in the Elsburg Joint Venture from Mintails SA

resulting in DRDGOLD SA, which holds its interest through its subsidiary, ERPM, holding a 65% interest and Mintails SA a 35%

interest in the joint venture. In addition, Mintails has granted DRDGOLD SA a conditional option to acquire a further 11.4%

interest in the Elsburg Joint Venture. The 50:50 interests of DRDGOLD SA and Mintails in the Ergo Joint Venture were not

affected by the acquisition and remained unchanged. The purchase consideration in respect of the acquisition was R100 million,

which is to be re-invested by Mintails in the Elsburg Joint Venture and the Ergo Joint Venture. The effective date of the acquisition

will be the date upon which it becomes unconditional. The option is exercisable between January 1, 2009 and January 15, 2009 at

an exercise price of R75.9 million.

In terms of a binding heads of agreement dated December 8, 2008, DRDGOLD has agreed to acquire:

• the remaining 35% interest (or 23.6% if the Elsburg option is exercised prior to implementation of the acquisition) held

by Mintails, through its subsidiary Mogale Gold (Pty) Limited, in the Elsburg Joint Venture; and

• all of the shareholder’s loans from the Mintails group to the Elsburg Joint Venture

The implementation of the acquisition will result in the DRDGOLD group holding 100% of the Elsburg Joint Venture.

The 50:50 interests of DRDGOLD SA and Mintails in the Ergo Joint Venture are not affected by the acquisition. The purchase

consideration in respect of the acquisition is R177.0 million, which is to be settled in cash. In the event that the Elsburg option is

exercised prior to the implementation of the acquisition, the parties have agreed that the purchase price will be reduced by

approximately R23.8 million in recognition of amounts that will have been paid by the DRDGOLD group on exercise of the

Elsburg option. The effective date of the acquisition is December 8, 2008, although the risk and title in respect of the acquisition

only passes to the DRDGOLD group on completion of the acquisition.

Other

We concluded an agreement with M5 Developments (Pty) Limited, or M5, on July 21, 2005, in terms of which M5, against

payment of a non-refundable fee of R1.5 million, was granted an option to acquire Durban Deep’s mine village for R15.0 million. On

the exercise of the option, the option fee would be deemed part payment of the purchase consideration.

On November 18, 2005, M5 exercised the option and provided a guarantee for payment. Prior to the registration of the

transfer occurring, we were notified by Rand Leases Properties Limited (formerly JCI Properties Limited) of an alleged pre-

emptive right in respect of the property in terms of an agreement dated December 1996, pursuant to which the property should be

first offered to be sold to them on similar terms. We subsequently repudiated our agreement with M5 and notified Rand Leases

Properties Limited that we did not intend offering the property to them. Both parties indicated to us their intentions to institute

legal proceedings for the sale and transfer of the property. On December 12, 2006, Rand Leases Properties Limited issued a

summons against us and we filed an appearance to defend. A trial date was allocated by the High Court of South Africa for April 25,

2008 but was postponed. A new date has not yet been set.

Key financial and operating indicators

The financial results for the years ended June 30, 2008, 2007 and 2006 below are stated in accordance with IFRS as

issued by the IASB.

We consider the key performance measures for the growth of our business and its profitability to be gold revenue,

production, operating costs, cash costs per kilogram and total costs per kilogram, capital expenditure and Ore Reserves. The

following table presents the key performance measurement data for the past three fiscal years:

Operating data

Continuing operations

Year ended June 30,

2008

2007

2006

Revenues (R'000).........................................................................................................................

1,843,912 1,534,777

970,604

Gold production (ounces) ...........................................................................................................

308,005

334,496

276,971

Gold production (kilograms).......................................................................................................

9,580

10,404

8,615

Revenue (R/kilogram)..................................................................................................................

192,472

147,516

112,665

Operating costs (R'000) .............................................................................................................

1,503,015 1,315,126

873,235

Cash costs (R/kilogram)

............................................................................................................

156,891

126,406

101,362

Total costs (R/kilogram)

............................................................................................................

183,488

146,921

121,333

Capital expenditure (R'000) .......................................................................................................

251,180

139,428

90,351

Ore Reserves (ounces) ...............................................................................................................

4,510,000 4,739,000 5,351,000

Discontinued operations

For part of fiscal 2006 the operating data excludes our 40% share of our equity accounted associate Crown, which owned

ERPM, and our 39.52% investment in Emperor, prior to these entities becoming subsidiaries. The operating data includes our 20%

attributable interest in the proportionately consolidated Porgera Joint Venture.

Cash costs per kilogram is a non-IFRS financial measure of performance that we use to determine cash generating capacities of

the mines and to monitor performance of our mining operations. For a reconciliation to operating costs see Item 5A.: “Operating

Results.”

Total costs per kilogram is a non-IFRS financial measure of performance that we use to determine cash generating capacities of

the mines and to monitor performance of our mining operations. For a reconciliation to operating costs see Item 5A.: “Operating

Results.”

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on October 22, 2007 we sold

Emperor. As a result we report the Porgera, Tolukuma and Emperor information as discontinued operations and all other

operations as continuing operations. We have adjusted the results for prior reporting periods accordingly.

Year ended June 30,

2008

2007

2006

Revenues (R'000)........................................................................................................................

674,928

629,390

Gold production (ounces) ..........................................................................................................

13,427

142,661

185,087

Gold production (kilograms)......................................................................................................

417

4,435

5,757

Revenue (R/kilogram).................................................................................................................

213,992

152,182

109,327

Operating costs (R'000) ............................................................................................................

124,437

719,996

509,853

Cash costs (R/kilogram)

.........................................................................................................

298,410

162,344

88,562

Total costs (R/kilogram)

..........................................................................................................

631,149

435,485

88,785

Capital expenditure (R'000) ......................................................................................................

47,572

173,606

172,935

Ore Reserves (ounces) .............................................................................................................. -

108,000 2,151,000

Revenue

Revenue is derived from the sale of gold. The following table analyzes the revenue per operation:

Year ended June 30,

2008

R'000

2007

R'000

2006

R'000

Continuing operations

Blyvoor ....................................................................................................................... 848,230

694,612

538,841

Crown

........................................................................................................................ 528,625

472,842

206,546

ERPM

........................................................................................................................ 467,057

367,323

225,217

Total .......................................................................................................................... 1,843,912

1,534,777

970,604

Discontinued operations

Porgera Joint Venture .................................................................................................

328,094

419,156

Vatukoula....................................................................................................................

121,962

15,804

Tolukuma.................................................................................................................... 89,235

224,872

194,430

Total ......................................................................................................................... 89,235

674,928

629,390

Revenue from continuing operations increased from R1,534.8 million in fiscal 2007 to R1,843.9 million in fiscal 2008.

This increase was a consequence of the higher average gold price received by us of R192,472 per kilogram of gold produced,

compared to R147,516 per kilogram of gold produced in fiscal 2007. The increase in revenue was marginally offset by production

problems experienced at Blyvoor and ERPM, which resulted in production decreasing from 334,496 ounces in fiscal 2007 to

308,005 ounces in fiscal 2008.

For fiscal 2007, revenue from continuing operations increased from R970.6 million in fiscal 2006 to R 1,534.8 million,

with the average gold price received by us increasing to R147,516 per kilogram of gold produced in fiscal 2007, compared to

R112,665 per kilogram of gold produced in fiscal 2006 and production increasing from 276,971 ounces in fiscal 2006 to 334,496

ounces in fiscal 2007. The increase in revenue was as a result of the higher gold price and increased production from our South

African Operations.

With effect from December 1, 2005, we acquired 60% of Crown and ERPM. From that date these operations have been

consolidated as subsidiaries. Previously we owned 40% of Crown and ERPM, which were treated as associates.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on October 22, 2007 we sold

Emperor. As a result we report the Porgera, Tolukuma and Emperor information as discontinued operations and all other

operations as continuing operations. We have adjusted the results for prior reporting periods accordingly.

Gold production

The following table analyzes the attributable production per operation:

Production in Year ended June 30

2008

2007

2006

Ounces

Kilograms

Ounces

Kilograms

Ounces

Kilograms

Continuing operations

Blyvoor ...................................................... 141,172

4,391

151,269

4,705

159,693

4,967

Surface operations........................................

37,359

1,162

40,798

1,269

39,515

1,229

Underground operations..............................

103,813

3,229

110,471

3,436

120,178

3,738

Crown

........................................................ 87,354

2,717

103,011

3,204

75,959

2,363

ERPM

........................................................ 79,479

2,472

80,216

2,495

80,324

2,498

Surface operations........................................

22,667

705

22,153

689

20,325

632

Underground operations...............................

56,812

1,767

58,063

1,806

59,999

1,866

Total attributable production ..................

308,005

9,580

334,496

10,404

315,976

9,828

Attributable production of associates.......... -

(39,005)

(1,213)

Total South African Operations .............

308,005

9,580

334,496

10,404

276,971

8,615

Discontinued operations

Porgera Joint Venture ..................................

71,570

2,226

128,238

3,989

Vatukoula.....................................................

26,910

837

28,397

883

Tolukuma.................................................... 13,427

417

44,181

1,372

54,790

1,704

Total Australasian Operations

13,427

417

142,661

4,435

211,425

6,576

For fiscal 2008, our total attributable gold production from continuing operations decreased by 26,491 ounces, or 8%, to

308,005 ounces from 334,496 ounces produced in fiscal 2007.

At Blyvoor, total production declined by 7% to 141,172 ounces from 151,269 ounces in fiscal 2007, reflecting a 6%

decrease in gold from the underground operations to 103,813 ounces from 110,471 ounces in fiscal 2007 and an 8% drop in gold

from surface sources to 37,359 ounces from 40,798 ounces in fiscal 2007. The loss of seven production shifts underground

because of a stoppage imposed by the DME’s Safety Inspectorate in October following two fatalities; the impact of power cuts by

Eskom in January when five production days were lost; and a one-day illegal strike during May all contributed toward the lower

production recorded.

At Crown, there was a 15% reduction in gold production to 87,354 ounces from 103,011 ounces in fiscal 2007 mainly

because of a decline in yield, from 0.38g/t in fiscal 2007 to 0.33 g/t in fiscal 2008. This is a reflection of the ever-diminishing

reserves of higher grade material available. There was also a 2% decrease in throughput to 8,235,000 tonnes from 8,405,000

tonnes in fiscal 2007.

At ERPM, although there was a slight increase in throughput to 2,162,000 tonnes from 2,022,000 tonnes in fiscal 2007,

there was a marginal decrease of 1% in total gold production to 79,479 ounces from 80,216 ounces in fiscal 2007. Production was

affected by Eskom’s power cuts and the breakdown of a compressor at the No. 5 ice plant during the third quarter of fiscal 2008,

the negative impact on the operations of four days of violence believed to be directed at foreign workers in communities close to

the mine and to the cessation of mining of the unprofitable 73 and 74 long walls during the last quarter of the year.

or fiscal 2007, our total attributable gold production from continuing operations increased by 18,520 ounces, or 6%, to

334,496

ounces from 315,976 ounces produced in fiscal 2006.

For part of fiscal 2006 the operating data excludes our 40% share of our equity accounted associate Crown, which owned ERPM

prior to these entities becoming subsidiaries. The operating data includes our 20% attributable interest in the proportionately

consolidated Porgera Joint Venture

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on October 22, 2007 we sold

Emperor to 26 institutional investors drawing a close to our mining investments in Australasia. As a result we report the 2008,

2007 and 2006 information relating to Porgera, Tolukuma, and Vatukoula information as discontinued operations and all other

operations as continuing operations. We have adjusted the results for prior reporting periods accordingly.

At Blyvoor, reduced underground gold production was impacted by the new, “lower grade, higher volume” mine plan to

address safety concerns arising from increasing levels of seismicity in the high-grade area of the mine’s No. 5 Shaft. ERPM’s

planned shift from low volume, high grade scattered mining in the west of the lease area to high volume, lower grade longwall

mining in the east below 70 level proved problematic. Delays in the supply of services to the newly developed longwalls reduced

volumes mined and navigation of faulting encountered had a negative impact on both volumes and yield. Gold production at

Crown for the year was significantly higher, reflecting an improvement in throughput tons made possible through improvements

to pipelines and other infrastructure.

A more detailed review of gold production at each of our operations is provided under Item 4D.: “Property, Plant and

Equipment.”

Cash costs

and total costs

per kilogram

Our operational focus is to increase production, improve productivity and reduce costs. For fiscal 2008, cash costs from our

continuing operations increased to R156,891 per kilogram of gold from R126,406 per kilogram of gold in fiscal 2007. Total costs

from our continuing operations increased to R183,488 per kilogram of gold from R146,921 per kilogram of gold in fiscal 2007. The

increase in cash costs per kilogram of gold produced in fiscal 2008 was due to price increases in key consumables (labor,

consumables and electricity) and lower production.

In fiscal 2007, the cash costs per kilogram from our continuing operations increased by 25%, from R101,362 per kilogram

to R126,406 per kilogram, compared to fiscal 2006. The increase in cash costs per kilogram of gold produced in fiscal 2007 was

due to price increases in key consumables (labor, consumables and electricity).

econciliation of cash costs per kilogram, total costs and total costs per kilogram

Cash costs of production include costs for all mining, processing, administration, royalties and production taxes, but

exclude depreciation, depletion and amortization, rehabilitation, retrenchment costs, corporate administration costs and

exploration costs. Cash costs per kilogram are calculated by dividing operating costs by kilograms of gold produced. Cash costs

per kilogram have been calculated on a consistent basis for all periods presented.

Total operating costs include cash costs of production, depreciation, depletion and amortization and the accretion of

rehabilitation, reclamation and closure costs.

Total costs, as calculated and reported by us, include total operating costs, plus other operating and non-operating

income, finance expenses and other operating and non-operating costs, but exclude taxation, minority interest, equity in loss from

associates and the cumulative effect of accounting changes. These costs are excluded as the mines do not have control over these

costs and they have little or no impact on the day-to-day operating performance of the mines. Total costs per kilogram are

calculated by dividing total costs by kilograms of gold produced. Total costs and total costs per kilogram have been calculated on

a consistent basis for all periods presented.

Cash costs per kilogram, total costs and total costs per kilogram are non - IFRS financial measures that should not be

considered by investors in isolation or as alternatives to operating costs, net profit/(loss) attributable to ordinary shareholders,

profit/(loss) before tax and other items or any other measure of financial performance presented in accordance with IFRS or as an

indicator of our performance. While the Gold Institute has provided definitions for the calculation of cash costs, the calculation of

cash costs per kilogram, total costs and total costs per kilogram may vary significantly among gold mining companies, and these

definitions by themselves do not necessarily provide a basis for comparison with other gold mining companies. However, we

believe that cash costs per kilogram, total costs and total costs per kilogram are useful indicators to investors and management of

an individual mine's performance and of the performance of our operations as a whole as they provide:

• an indication of a mine’s profitability and efficiency;

• the trend in costs;

• a measure of a mine's margin per kilogram, by comparison of the cash costs per kilogram by mine to the price of gold;

and

• a benchmark of performance to allow for comparison against other mines and mining companies.

reconciliation of operating costs to total costs, cash costs per kilogram and total costs per kilogram, for each of the

three years in the period ending June 30, 2008, is presented below. In addition, we have also provided below details of the amount

of gold produced by each mine for each of those periods.

Cash costs per ounce is a non - IFRS financial measure of performance that we use to determine cash generating capacities of the

mines and to monitor performance of our mining operations. For a reconciliation to operating costs see Item 5A.: “Operating

Results.”

Total costs per ounce is a non - IFRS financial measure of performance that we use to determine cash generating capacities of

the mines and to monitor performance of our mining operations. For a reconciliation to operating costs see Item 5A.: “Operating

Results.”

For the year ended June 30, 2008

(in R'000, except as otherwise noted)

Continuing Operations

Discontinued Operations

Blyvoor

Crown

ERPM

Other

Total South

African

Operations

Other-

Offshore

Operations

Total

Continuing

Operations

Porgera

Tolukuma

Other

1 2

Total

discontinued

operations

Operating costs

...............................................

697,281

362,237

428,255

15,242 1,503,015

1,503,015

107,381

17,056

124,437

Plus:

Depreciation.....................................................

22,671

20,548

25,269

589

69,077

348

506

854

Retrenchment costs..........................................

5,528

5,816

11,344

Movement in provision for environmental

rehabilitation....................................................

959

20,334

10,976

(2,098)

30,171

3,868

151

4,019

Movement in gold in progress .........................

(14,374)

(1,354)

485

(15,243)

9,675

384

10,059

Total operating costs........................................

706,537

401,765

470,513

19,549 1,598,364

- 1,598,364

121,272

18,097

139,369

Plus:

Loss on derivative instruments ........................

433

433

Impairments.....................................................

69,804

(5,889)

63,915

46,718

46,718

Administration expenses and general costs .....

17,333

12,294

17,622

30,083

77,332

2,107

79,439

1,985

9,898

8,201

20,084

Finance income................................................

(5,960)

(10,796)

(2,716)

(64,754)

(84,226)

(7,749)

(91,975) (195,970)

375

192,555

(3,040)

Finance expenses ............................................

67,232

25,926

4,360

18,118

115,636

(7,568)

108,068

(7,144)

(4,745)

71,514

59,625

Total costs .........................................................

785,142

429,189

559,583

(2,893) 1,771,021 (13,210) 1,757,811 (201,129)

173,518

290,800

263,189

Gold produced (ounces).....................................

141,172

87,354

79,479

308,005

13,427

13,427

Gold produced (kilograms) ................................

4,391

2,717

2,472

9,580

417

417

Cash costs per kilogram (R per kilogram) .........

158,798

133,322

173,242

156,891

257,508

298,410

Total costs per kilogram (R per kilogram).........

178,807

157,964

226,369

184,866

183,488

416,110

631,149

Relates to other non-core operating entities within the Group.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on October 22, 2007 we sold Emperor. On March 30, 2008 we disposed of our 50.25%

shareholding in NetGold Services Limited (Netgold). As a result we report the Porgera, Tolukuma, Emperor and Netgold information as discontinued operations and all other operations as

continuing operations. We have adjusted the results for prior reporting periods accordingly.

Operating costs equate to cash costs of production.

For the year ended June 30, 2007

(in R'000, except as otherwise noted)

Continuing Operations

Discontinued Operations

Blyvoor

Crown

ERPM

Other

Total

South

African

Operations

Other-

Offshore

Operatio

Total

Continuing

Operations Porgera

Vatukoula

Tolukuma

Other

1 2

Total

discontinued

operations

Operating costs

...............................................

602,871 343,476 358,716

10,063 1,315,126

1,315,126 235,525 175,815

277,191

31,465

719,996

Plus:

Depreciation.....................................................

21,451

28,080

13,766

608

63,905

63,905 28,510

45,410

32,110

8,997

115,027

Retrenchment costs..........................................

865

938

19,934

138

6,435

26,507

Movement in provision for environmental

rehabilitation....................................................

5,350

9,198

1,516

3,888

19,952

Movement in gold in progress .........................

296

589

(3,760)

(2,875)

(2,875) (31,146)

21,382

(4,616)

(14,380)

Total operating costs........................................

629,968 381,343 370,311

15,424

1,397,046

- 1,397,046 232,889 262,541

304,823 46,897

847,150

Plus:

Loss on derivative instruments ........................

36,898

- 13,954

50,852

Impairments.....................................................

15,588

3,829 (13,529)

5,888

5,913

807,160

64,968

872,133

Administration expenses and general costs .....

15,747

17,181

17,761

25,519

76,208 33,069

109,277 27,401

9,440

33,750 30,118

100,709

Finance income................................................

(6,069)

(1,665)

(670)

5,060

(3,344) (4,564)

(7,908) (13,380)

6,935

(6,180) (8,590)

(21,215)

Finance expenses .............................................

4,830

2,356

9,458

2,825

19,469

4,767

24,236 22,008

(8,637)

29,452 38,924

81,747

Total costs .........................................................

644,476 414,803 400,689

35,299 1,495,267 33,297 1,528,564 268,918 1,114,337

426,813 121,308 1,931,376

Gold produced (ounces).....................................

151,269 103,011

80,216

- 334,496

334,496 71,570

26,910

44,181

142,661

Gold produced (kilograms) ................................

4,705

3,204

2,495

10,404

2,226

837

1,372

4,435

Cash costs per kilogram (R per kilogram) .........

128,134 107,202 143,774

126,406

126,406 105,806 210,054

202,034

162,344

Total costs per kilogram (R per kilogram).........

136,977 129,464 160,597

- 143,720

146,921 120,808 1,331,347

311,088

435,485

Relates to other non-core operating entities within the Group.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on October 22, 2007 we sold Emperor. On March 30, 2008 we disposed of our 50.25%

shareholding in NetGold Services Limited (Netgold). As a result we report the Porgera, Tolukuma, Emperor and Netgold information as discontinued operations and all other operations as

continuing operations. We have adjusted the results for prior reporting periods accordingly.

Operating costs equate to cash costs of production.

For the year ended June 30, 2006

(in R'000, except as otherwise noted

Continuing Operations

Discontinued Operations

Blyvoor

Crown

ERPM Other

Total South

African

Operations

Other-

Offshore

Operations

Total

Continuing

Operations Porgera

Vatukoula

Tolukuma

Other

1 2

Total

discontinued

operations

Operating costs

...............................................

495,779 176,894 191,803 8,760

873,236

873,235 239,348

59,084 222,476 (11,055)

509,853

Plus:

Depreciation and amortization.........................

21,763

15,031

17,635

320

54,749

64,376

6,075

25,262

170

95,883

Retrenchment costs..........................................

984

984

4,642

4,642

Movement in provision for environmental

rehabilitation....................................................

(5,245)

30,189

(6,082) 9,439

28,301

11,196

144

2,288

(2,860)

10,768

Movement in gold in progress .........................

2,023

(434)

1,642

12,076

(7,288)

(9,936)

(5,148)

Total operating costs

514,320 221,680 203,409 19,503

958,912

- 958,912 326,996

62,657 240,090 (13,745)

615,998

Plus:

Loss on derivative instruments ........................

(37)

(37)

(28,365)

(6,212)

(34,577)

Impairment of assets........................................

- (44,073)

(44,073)

- (74,465)

(74,465)

Administration expenses and general costs .....

16,000

7,849

10,308 21,134

55,291

(7,130)

48,161

50,618

8,523

28,823

(4,742)

83,222

Finance income................................................

4,522

(394)

(192) (9,610)

(5,674)

(4,892)

(10,566)

(562)

6,657

(324) (98,503)

(92,732)

Finance expenses .............................................

9,484

1,881

12,855 69,421

93,641

(752)

92,889

5,607

(1,416)

4,893

4,603

13,687

Total costs .........................................................

544,326 231,016 226,380 56,338 1,058,060 (12,774) 1,045,286 382,659

48,056 273,482 (193,064)

511,133

Gold produced (ounces).....................................

159,693

56,000

61,278

276,971

276,971 128,238

2,059

54,790

185,087

Gold produced (Kg) ...........................................

4,967

1,742

1,906

8,615

3,989

1,704

5,757

Cash costs per kilogram (R per Kg)...................

99,815 101,546 100,631

101,362

60,002

923,188 130,561

88,562

Total costs per kilogram (R per Kg) ..................

109,587 132,615 118,772

122,816

121,333

95,929

750,875 160,494

88,785

Relates to other non-core operating entities within the Group.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on October 22, 2007 we sold Emperor. On March 30, 2008 we disposed of our 50.25%

shareholding in NetGold Services Limited (Netgold). As a result we report the Porgera, Tolukuma, Emperor and Netgold information as discontinued operations and all other operations as

continuing operations. We have adjusted the results for prior reporting periods accordingly.

Operating costs equate to cash costs of production.

Capital expenditure

During fiscal 2008, total capital expenditure relating to continuing operations was R251.1 million, compared to

R139.4 million in fiscal 2007, an increase of 80%. Capital expenditure increased, mainly due to R74.8 million spent specifically

on the WAP project at Blyvoor, infrastructural improvements of R30.1 million at ERPM, R42.1 million towards the installation of

new pipelines, reclamation of the 3L2 Dump, and Top Star at Crown, and installation and development of infrastructure at the Ergo

Joint Venture at a cost of R104.1 million. For a detailed discussion on capital expenditure see item 4D: “Property, Plant and

Equipment”

During fiscal 2007, total capital expenditure relating to continuing operations was R139.4 million, compared to

R90.4 million in fiscal 2006, an increase of 54%. Capital expenditure increased, mainly due to R68.5 million spent on opening up

and development related to implementation of the new mine plan at Blyvoor, infrastructural improvements of R40.6 million at

ERPM and R30.0 million towards the installation of new pipelines and reclamation of the 3L2 Dump at Crown.

ubsequent to June 30, 2008 and up to October 31, 2008 we spent R168.3 million on capital expenditure.

Ore Reserves

As at June 30, 2008, our Ore Reserves from continuing operations were estimated at 4.5 million ounces, as compared to

approximately 4.7 million ounces at June 30, 2007, representing a 5% decrease. Excluding the effect of depletion, our Ore Reserves

increased by 0.1 million ounces, or 2%. As at June 30, 2007, our Ore Reserves from continuing operations were estimated at

4.7 million ounces, as compared to approximately 5.4 million ounces at June 30, 2006, representing a 13% decrease for fiscal 2007.

Excluding the effect of depletion, our Ore Reserves decreased by 0.3 million ounces, or 6%.

We seek to increase our Ore Reserves through development and to acquire additional new Ore Reserves through

acquisitions.

Year ended June 30,

2008

2007

2006

Ounces

Kilogram

Ounces

Kilograms

Ounces Kilograms

‘000

Continuing operations

Blyvoor .....................................................................

3,332

103,650

3,886

120,877

4,300

133,749

Crown

......................................................................

350

10,883

371

11,561

225

6,988

ERPM

......................................................................

767

23,866

482

14,986

826

25,704

Ergo Joint Venture ................................................... 61

1,906

Total Ore Reserves from continuing operations

4,510

140,305

4,739

147,424

5,351

166,441

Discontinued operations

Porgera Joint Venture

.............................................. -

1,278

39,726

Tolukuma..................................................................

108

3,354

195

6,061

Vatukoula

...............................................................

678

21,102

Total Ore Reserves from discontinued

operations ..............................................................

108

3,354

2,151

66,889

Our Ore Reserves presented in Item 4B.: “Business Overview” and above are prepared using three year average gold prices

at the time of reserve determination. In fiscal years 2007 and 2006 the Company presented Ore Reserves based upon the prevailing

gold price at fiscal year end, instead of a three year average price. For purposes of our financial statements, depreciation and

impairment of property, plant and equipment is determined based upon our "recoverable minerals", which means proven and

probable ore reserves, which are calculated using our life of mine business plans and a gold price at the end of each financial year.

Accordingly, the change in gold price used to determine our Ore Reserves presented in Item 4B.: “Business Overview”, did not

have any impact on our financial statements.

With effect from December 1, 2005, we acquired 60% of Crown and ERPM. From this date these operations have been

consolidated as subsidiaries. Previously we owned 40% of Crown and ERPM, which were treated as associates.

Our attributable 20% share of the Proven and Probable Ore Reserves in the Porgera Joint Venture is based on the information

disclosed by Placer Dome. The Porgera Ore Reserves are estimated as at December 31, 2006.

With effect from April 6, 2006, Emperor, which owns 100% of the Vatukoula mine, became a subsidiary of the Group.

Previously we owned 39.52% (2005: 45.33%) of Emperor, which was treated as an associate. On December 5, 2006, Vatukoula

was placed on a care and maintenance program.

Application of critical accounting policies

Some of our significant accounting policies require the application of significant judgment by management in selecting the

appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of

uncertainty and are based on our historical experience, terms of existing contracts, management's view on trends in the gold mining

industry and information from outside sources.

Management believes the following critical accounting policies involve the more significant judgments and estimates used

in the preparation of our consolidated financial statements and could potentially impact our financial results and future financial

performance:

• Property, plant and equipment

• Impairment of property, plant and equipment

• Deferred income and mining taxes

• Reclamation and environmental costs

• Post-retirement medical benefits

• Financial instruments

Management has discussed the development and selection of each of these critical accounting policies with the Board of

Directors and the Audit Committee, both of which have approved and reviewed the disclosure of these policies. Our significant

accounting policies are described in more detail in note 27 to the consolidated financial statements. Refer to Item 18.: ‘‘Financial

statements’’. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes

included in Item 18.: ‘‘Financial statements’’.

Property, plant and equipment

Actual expenditures incurred for mineral property interests, mine development costs, mine plant facilities and equipment are

capitalized to the specific mine to which the cost relates. Depreciation is calculated on a mine-by-mine basis using the units of

production method. Under the units of production method, we estimate the depreciation rate based on actual production over total

Proven and Probable Ore Reserves of the particular mine, which are calculated using our life of mine business plans and a gold

price at the end of each financial year. This rate is then applied to actual costs capitalized to date to arrive at the depreciation expense

for the period. Proven and Probable Ore Reserves of the particular mine reflect estimated quantities of economically and legally

recoverable reserves. Changes in management’s estimates of the quantities of economically recoverable reserves impact

depreciation on a prospective basis. The estimate of the total reserves of our mines could be materially different from the actual gold

mined due to changes in the factors used in determining our Ore Reserves, such as the gold price, foreign currency exchange rates,

labor costs, engineering evaluations of assay values derived from sampling of drill holes and other openings. Any change in

management’s estimate of the total Proven and Probable Ore Reserves would impact the depreciation charges recorded in our

consolidated financial statements. The prevailing market price of gold at the end of the financial year was R117,055, R154,437 and

R208,287 per kilogram for the fiscal years ended June 30, 2006, 2007 and 2008, respectively.

Impairment of property, plant and equipment

The carrying amounts of assets, other than inventories and deferred tax assets are reviewed at each balance sheet date to

determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In

assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects

current market assessments of the time value of money and the risks specific to the asset. Future cash flows are estimated based on

quantities of recoverable minerals, expected gold prices, production levels and cash costs of production, all based on life of mine

business plans. The term “recoverable minerals” means proved and probable ore reserves, which are calculated using our life of

mine business plans and a gold price at the end of each financial year. The prevailing market price of gold at the end of the

financial year was R117,055, R154,437 and R208,287 per kilogram for the fiscal years ended June 30, 2006, 2007 and 2008,

respectively. For the purpose of impairment testing, assets are grouped together into the smallest group of assets which generates

cash inflows from continuing use that is largely independent of the cash inflows of other assets or groups of assets, or the cash-

generating unit. An impairment loss is recognized directly against the carrying amount of the asset whenever the carrying amount of

an asset, or its cash generating unit, exceeds its recoverable amount. Impairment losses are recognized in the income statement.

The recoverable amount of property, plant and equipment is generally determined utilizing discounted future cash flows. We

also consider such factors as our market capitalization, the quality of the individual orebody and country risk in determining the

recoverable amount. During fiscal 2008, R116.5 million was recorded as an impairment and during fiscal 2007 and 2006,

R872.1 million and Rnil, respectively, were recorded as an impairment by applying these principles. In fiscal 2008, we calculated the

recoverable amount based on updated life-of-mine business plans, a gold price of R235,000 per kilogram in year one escalating at

11% per annum, and a discount rate of 20%. At a 10% lower gold price received of R211,500 per kilogram, a further impairment of

R45.7 million would have been raised against ERPM’s consolidated underground assets.

Deferred income and mining taxes

Deferred taxation is recognized using the balance sheet liability method, providing for temporary differences between the

carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is

not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a

business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and

jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is

not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax

rates that are expected to be applied to the temporary differences, based on the expected manner of realization or settlement of the

carrying amount of assets and liabilities, and based on the laws that have been enacted or substantively enacted by the reporting date.

The amount recognized as a deferred tax asset is generally determined utilizing discounted future cash flows. We consider

all factors that could possibly affect the probability that future taxable profit will be available against which unused tax credits can be

utilized. These factors included proven profitability of Crown and Blyvoor, cost restructuring at ERPM and a higher gold price.

Where necessary, we apply an uncertainty factor to adjust the amount recognized. The amount recognized as a deferred tax asset is

sensitive to the current gold spot price. As at June 30, 2008 we recognized a deferred tax asset of R81.6 million, (June 30, 2007: Rnil,

and June 30, 2006: Rnil). The amount recognized at June, 30 2008 is based on a future gold price received of R235,000 per kilogram

in year one, escalating at an average of 11% per annum. At a 10% lower gold price received of R211 500 per kilogram, the deferred

tax asset will reduce by R32.5 million.

eclamation and environmental costs

The provision for environmental rehabilitation represents the cost that will arise from rectifying damage caused before

production commenced. Accordingly an asset is recognized and included within mining properties. Provisions for environmental

rehabilitation are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based

on current prices. The unwinding of the obligation is included in the income statement. Estimated future costs of environmental

rehabilitation are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes in

estimates are capitalized or reversed against the relevant asset. Gains or losses from the expected disposal of assets are not taken into

account when determining the provision.

Estimated provisions for environmental rehabilitation, comprising pollution control rehabilitation and mine closure, are

based on our environmental management plans in compliance with current technological, environmental and regulatory requirements.

An average discount rate of 11.0%, average inflation rate of 8.9% and expected life of mines according to the life-of-mine plans were

utilized in the calculation of the estimated net present value of the rehabilitation liability (fiscal 2007: discount rate of 9.1% and

inflation rate of 6.4%,fiscal 2006: discount rate of 8.6% and inflation rate of 4.9%) . During fiscal 2008 we acquired the

environmental rehabilitation liability to the amount of R 75, 5 million relating to the Ergo Joint Venture and disposed of a liability to

the amount of R15.8 million that related to the disposal of Emperor. Charges to the income statement for the environmental

rehabilitation of R34.2 million, R20.0 million and R39.1 million were raised in fiscal 2008, 2007 and 2006, respectively. Unwinding

of the provisions amounting to R4.7 million, R3.3 million and R7.0 million was recorded in fiscal 2008, 2007 and 2006, respectively.

In South Africa, annual contributions are made to dedicated Rehabilitation Trust Funds, which are to be used to fund the

estimated cost of rehabilitation during and at the end of the life of the relevant mine.

ost-retirement medical benefits

Post-retirement medical benefits in respect of qualifying employees are recognized as an expense over the expected

remaining service lives of relevant employees. We have an obligation to provide medical benefits to certain of our pensioners and

dependants of ex-employees. These liabilities are provided in full, calculated on an actuarial basis. Periodic valuation of these

obligations is carried out by independent actuaries using appropriate mortality tables, long-term estimates of increases in medical

costs and appropriate discount rates. Actuarial gains and losses are included in determining net income or loss.

Assumptions used to determine the liability include a discount rate, health cost inflation rate, real discount rate, income at

retirement, retirement age, spouse age gap, continuation at retirement and proportion married at retirement. At June 30, 2008 a

provision of R21.5 million (June 30, 2007: R19.0 million, June 30, 2006: R16.8 million) for post-retirement medical benefits has

been raised. During fiscal 2008, we expensed R2.5 million (2007: R2.2 million; 2006: R2.9 million) relating to these post-

retirement medical benefits. While we believe that these assumptions are appropriate, significant changes in the assumptions may

materially affect post-retirement obligations as well as future expenses, which may have an impact on earnings in the periods

where the changes in the assumptions occur.

Financial instruments

Financial instruments recognized on the balance sheet include investments, derivative financial instruments, trade and

other receivables, cash and cash equivalents, long- and short-term interest-bearing borrowings, trade and other payables, and bank

overdrafts. Financial instruments are initially recognized at fair value and include any directly attributable transaction costs,

except those financial instruments measured at fair value through profit or loss.

Of the value of the financial instrument cannot be obtained from an active market, we have established fair value by using

valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are

substantially the same, discounted cash flow analysis and option pricing models, refined to reflect the issuer’s specific

circumstances.

Operating results

Comparison of financial performance for the fiscal year ended June 30, 2008 with fiscal year ended June 30, 2007

Revenue

The following table illustrates the year-on-year change in revenue from continuing operations by evaluating the

contribution of each segment to the total change on a consolidated basis for fiscal 2008 in comparison to fiscal 2007:

Impact of change in volume

R’000

Total

revenue

2007 Acquisitions

Internal

growth/

(decline)

Impact of

change in

price

Net

change

Total

revenue

2008

Blyvoor .........................................................

694,612

(46,357)

199,975

153,618

848,230

Crown ...........................................................

472,842

(71,871)

127,654

55,783

528,625

ERPM ...........................................................

367,323

(3,386)

103,120

99,734

467,057

Total Operations ........................................

1,534,777

(121,614)

430,749 309,135

1,843,912

Revenue for fiscal 2008 increased by R309.1 million, or 20%, to R1,843.9 million, primarily due to the higher gold price

received. The average gold price received by us increased from R147,516 per kilogram in fiscal 2007 to R192,472 per kilogram in

fiscal 2008.

perating costs

The following table illustrates the year-on-year change in operating costs from continuing operations by evaluating the

contribution of each segment to the total change on a consolidated basis for fiscal 2008 in comparison to fiscal 2007:

Impact of change in volume

R’000

Total

operating

costs

2007 Acquisitions

Internal

growth/

(decline)

Impact of

change in

costs

Net

change

Total

operating

costs

2008

Blyvoor .........................................................

602,871

(40,234)

134,644

94,410

697,281

Crown ...........................................................

343,476

(52,207)

70,968

18,761

362,237

ERPM ...........................................................

358,716

(3,307)

72,846

69,539

428,255

Other

............................................................

10,063

5,179

15,242

Total ............................................................. 1,315,126

(95,748)

283,637 187,889 1,503,015

Relates to non-operating entities within the Group.

The following table lists the major components of operating costs for each of the years set forth below:

Years ended June 30,

Costs

2008

2007

Labor..............................................................................................................................................

41%

39%

Contractor services ........................................................................................................................

11%

18%

Inventory........................................................................................................................................

25%

29%

Electricity and water......................................................................................................................

13%

14%

As gold mining in South Africa is very labor intensive, labor costs and contractor services are the largest components of

operating costs. Operating costs are linked directly to the level of production of a specific fiscal year. Operating costs in fiscal

2008 increased by 14% to R1,503.0 million compared to operating costs of R1,315.1 million in fiscal 2007. This increase was

primarily attributable to higher costs of labor, steel, fuel, electricity and water at all the operations.

At Blyvoor operating costs increased from R602.9 million in fiscal 2007 to R697.3 million in fiscal 2008, with a decrease in

volume from 151,269 ounces to 141,172 ounces produced, due to the loss of seven production shifts underground because of a

stoppage imposed by the DME’s Safety Inspectorate in October following two fatalities; the impact of power cuts by Eskom in

January when five production days were lost; and a one-day illegal strike during May. Operating costs at Crown were R362.2 million

in fiscal 2008, compared to R343.5 million in fiscal 2007. At ERPM operating costs increased from R358.7 million in fiscal 2007 to

R 428.3 million in fiscal 2008.

Rehabilitation provision and amounts contributed to environmental trust funds

As of June 30, 2008, we estimate our total rehabilitation provision, being the discounted estimate of future costs, to be

R381.3 million as compared to R282.6 million at June 30, 2007. The increase in fiscal 2008 related to the acquisition of the

environmental rehabilitation liability to the amount of R 75.5 million relating to the Ergo Joint Venture and the disposal of a liability

to the amount of R15.8 million that related to the disposal of Emperor. A movement in the rehabilitation provision of R34.2 million

(fiscal 2007: R20.0 million) and an unwinding of the discount of R4.7 million was recorded in fiscal 2008 (fiscal 2007:

R3.3 million).

total of R110.8 million was invested in our various environmental trust funds as at the end of fiscal 2008, as compared

to R75.8 million for fiscal 2007. The increase is attributable to investment growth and additional contributions made during the

year under review. The shortfall between the trust funds and the estimated provisions is expected to be financed by ongoing

financial contributions over the remaining production life of the respective mining operations.

Depreciation

Depreciation charges relating to our continuing operations were R69.1 million for fiscal 2008 compared to R63.9 million

for fiscal 2007. The increase is mainly attributable to an increase in capital expenditure in recent years.

Retrenchment costs

Retrenchment costs relating to our continuing operations increased to R11.3 million in fiscal 2008 from R0.9 million for

fiscal 2007. In fiscal 2008, these costs related to retrenchments made at ERPM at a cost of R5.5 million, retrenchment costs at

DRDGOLD SA, at a cost of R0.9 million, and retrenchment costs at our corporate head office, at a cost of R4.9 million.

Retrenchment costs increased in fiscal 2008 due to a cost reduction initiatives implemented during the year.

mpairments

In fiscal 2008, an impairment relating to the underground mining assets at ERPM amounting to R69.8 million was

recorded. The impairment was due to the recoverable amount represented by the value in use of these assets being less than their

carrying amount This compares to an impairment of R5.9 million in fiscal 2007 which was recorded against preference shares

held in Khumo Gold and a loan to our employee trust.

Administration expenses and general costs

The administration expenses and general costs relating to our continuing operations decreased in fiscal 2008 to
R79.4 million as compared to R109.3 million in fiscal 2007, a decrease of R29.9 million. The decrease was mainly due to our
ongoing focus on reducing corporate costs and the disposal of Emperor.

Finance income

Finance income from our continuing operations increased from R7.9 million in fiscal 2007 to R92.0 million in fiscal

2008. The majority of the increase in fiscal 2008 related to interest received on our significantly higher cash and cash equivalents

in fiscal 2008 compared to fiscal 2007.

inance expenses

Finance expenses from our continuing operations increased from R24.2 million in fiscal 2007 to R108.1 million in fiscal

2008. A net loss on the re-measurement of financial liabilities carried at amortized cost of R83.7 million in fiscal 2008 was the

main reason for the increase.

Income tax

The net tax benefit relating to our continuing operations of R68.3 million for fiscal 2008 comprises a current taxation

charge of R13.3 million and a deferred tax benefit of R81.6 million. This compares to a current taxation charge of R0.3 million

and Secondary Tax on Companies of R0.4 million in fiscal 2007. The increase in the deferred tax benefit was as a result of the

recognition of estimated tax losses at our operations which were not recognized previously.

Profit on disposal of discontinued operations

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick. The total consideration for

the transaction was R1.9 billion ($255.0 million) which was paid in cash. We recognized a profit on disposal of Porgera of R1.1

billion. The effective date of the transaction was April 1, 2007.

The sale of our 78.72% interest in Emperor was concluded on October 22, 2007 for a total consideration of R355.8

million (A$56.0 million). We recognized a profit on disposal of R103.4 million.

On March 30, 2008 we disposed of our 50.25% shareholding in NetGold and in exchange for our shareholding in

NetGold obtained a 12.3% stake in GoldMoney. A profit of R13.4 million was recognized on this disposal.

Comparison of financial performance for the fiscal year ended June 30, 2007 with fiscal year ended June 30, 2006

Revenue

The following table illustrates the year-on-year change in revenue from continuing operations by evaluating the

contribution of each segment to the total change on a consolidated basis for fiscal 2007 in comparison to fiscal 2006:

Impact of change in volume

R’000

Total

revenue

2006 Acquisitions

Internal

growth/

(decline)

Impact of

change in

price

Net

change

Total

revenue

2007

Blyvoor .........................................................

538,841

(28,423)

184,194 155,771

694,612

Crown

..........................................................

206,546

173,304

92,992 266,296

472,842

ERPM

..........................................................

225,217

69,660

72,446 142,106

367,323

Total .............................................................

970,604

214,541

349,632 564,173 1,534,777

Revenue for fiscal 2007 increased by R564.2 million, or 58%, to R1,534.8 million, due to an increase in production and a

higher gold price received. The average gold price received by us increased from R112,665 per kilogram in fiscal 2006 to

R147,516 per kilogram in fiscal 2007.

With effect from December 1, 2005, we acquired 60% of Crown and ERPM. From this date these operations have been

consolidated as subsidiaries. Previously we owned 40% of Crown and ERPM, which were treated as associates.

Operating costs

The following table illustrates the year-on-year change in operating costs from continuing operations by evaluating the

contribution of each segment to the total change on a consolidated basis for fiscal 2007 in comparison to fiscal 2006:

Impact of change in

volume

R’000

Total

operating

costs

2006 Acquisitions

Internal

growth/

(decline)

Impact of

change in

costs

Net

change

Total

operating

costs

2007

Blyvoor .........................................................

495,779

(26,151)

133,243

107,092

602,871

Crown ...........................................................

176,894

(209,104)

375,686

166,582

343,476

ERPM ...........................................................

191,803

(220,722)

387,635

166,913

358,716

Other .............................................................

8,760

1,303

10,063

Total .............................................................

873,236

(455,977)

897,867

441,890 1,315,126

The following table lists the major components of operating costs for each of the years set forth below:

Years ended June 30,

Costs

2007

2006

Labor..............................................................................................................................................

39%

35%

Contractor Services .......................................................................................................................

18%

22%

Inventory........................................................................................................................................

29%

31%

Electricity.......................................................................................................................................

14%

12%

As gold mining in South Africa is very labor intensive, labor costs and contractor services are the largest components of

operating costs in that region. Operating costs are linked directly to the level of production of a specific fiscal year. Operating

costs in fiscal 2007 increased by 51% to R1,315.1 million compared to operating costs of R873.2 million in fiscal 2006. This

increase was primarily due to Crown and ERPM being consolidated with effect from December 1, 2005, when we acquired 60%

of these operations. Previously we owned 40% of Crown and ERPM, which were treated as associates.

At Blyvoor operating costs increased from R495.8 million in fiscal 2006 to 602.9 million in fiscal 2007, with a decrease

in volume from 159,693 ounces to 151,269 ounces produced, due to the new, “lower grade, higher volume” mine plan to address

safety concerns arising from increasing levels of seismicity in the high-grade area of the mine’s No. 5 Shaft. Operating costs at

Crown were R343.5 million in fiscal 2007, compared to R176.9 million in fiscal 2006. At ERPM operating costs increased from

R191.8 million in fiscal 2006 to 358.7 million in fiscal 2007.

Rehabilitation provision and amounts contributed to environmental trust funds

As of June 30, 2007, we estimated our total rehabilitation provision, being the discounted estimate of future costs, to be

R282.6 million as compared to R322.3 million at June 30, 2006. In fiscal 2007, a movement in the rehabilitation provision of

R20.0 million (fiscal 2006: R39.1 million) and an unwinding of the discount of R3.3 million was recorded (fiscal 2006:

R7.0 million). During fiscal 2007 R61.6 million was transferred to non-current liabilities held for sale.

total of R75.8 million was invested in our various environmental trust funds as at the end of fiscal 2007, as compared

to R60.4 million for fiscal 2006. The increase is attributable to investment growth and additional contributions made during the

year under review. The shortfall between the trust funds and the estimated provisions is expected to be financed by ongoing

financial contributions over the remaining production life of the respective mining operations.

Depreciation

Depreciation charges relating to our continuing operations were R63.9million for fiscal 2007 compared to R54.7 million

for fiscal 2006. The increase is mainly attributable to an increase in capital expenditure in recent years

Retrenchment costs

Retrenchment costs relating to the continuing operations amounted to R0.9 million for fiscal 2007 compared with

R1.0 million for fiscal 2006. In fiscal 2007, these costs related to retrenchments made at our corporate head office.

Impairments

In fiscal 2007 an impairment of R5.9 million was recorded against preference shares held in Khumo Gold and a loan to

our employee trust. In fiscal 2006, net reversals of impairments on various loans amounted to R44.0 million.

Administration expenses and general costs

The administration expenses and general costs from continuing operations increased in fiscal 2007 to R109.3 million

compared to R48.2 million in fiscal 2006, an increase of R61.1 million. The increase is mainly due to the consolidation of Crown

and ERPM’s corporate costs for a full year in fiscal 2007.

Finance income

Finance income from our continuing operations decreased from R10.6 million in fiscal 2006 to R7.9 million in fiscal

2007. The decrease was as a result of lower interest received in fiscal 2007.

inance expenses

Finance expenses from continuing operations decreased from R92.9 million in fiscal 2006 to R24.2 million in fiscal

2007. The majority related to an unrealized foreign exchange loss of R43.6 million recognized in fiscal 2006 compared to a gain

of R14.0 million in fiscal 2007.

Income tax

The net tax expense relating to the continuing operations of R0.7 million for fiscal 2007 comprises a current taxation

charge of R0.3 million and Secondary Tax on Companies of R0.4 million. This compares to a current taxation charge of

R1.3 million in fiscal 2006.

Profit from discontinued operations, net of taxes

On December 5, 2006, after an extensive three-month review of Vatukoula, we determined that continued mining

operations at Vatukoula were no longer economically viable and that the mine would therefore cease production. After a strategic

review to optimize the value of Vatukoula and other Fijian land holdings, the mine was placed on a care and maintenance

program. On March 28, 2007, Emperor sold all its Fijian assets, including the Vatukoula Mine to Westech Gold (Pty) Limited for

A$1.00, realizing a profit of R90.9 million.

5B. LIQUIDITY AND CAPITAL RESOURCES

Operating activities

Net cash of R182.6 million was generated by operating activities for fiscal 2008 as compared to cash generated by operating

activities of R2.3 million for fiscal 2007 and cash utilized by operating activities of R53.4 million for fiscal 2006. During fiscal 2008,

the net working capital movement represented an inflow of cash of R19.0 million, compared to an inflow of R99.2 million in fiscal

2007. Cash generated from operating activities improved significantly as a result of the disposal of Emperor along with our loss-

making foreign operations.

Investing activities

Net cash generated from investing activities amounted to R1,531.0 million in fiscal 2008 compared to R316.3 million

utilized in fiscal 2007 and R238.9 million utilized in fiscal 2006.

In fiscal 2008, cash generated from investing activities mainly consisted of a cash inflow on disposal of Porgera, net of cash

disposed, of R1,936.7 million, cash outflow on disposal of Netgold and Emperor, net of cash disposed, of R121.7 million along with

capital expenditure of R286.7 million (including discontinued operations) and contributions to environmental trust funds of

R26.5 million. Cash utilized in investing activities during fiscal 2007, included capital expenditure of R313.0 million (including

discontinued operations). In fiscal 2006, cash utilized in investing activities included R45.3 million received on acquisition of ERPM,

Crown and Emperor, net of cash acquired, R4.0 million cash outflow on disposal of Stand 752 Parktown Extension (Pty) Ltd, net of

cash disposed and capital expenditure of R263.3 million (including discontinued operations)

Total capital expenditure for fiscal 2008 was R286.7 million (including discontinued operations). Capital expenditures were

predominantly on Ore Reserve development and new underground mining equipment at all operations. Significant continuing capital

projects for fiscal 2008 included:

• Ore Reserve development specifically for the WAP project at Blyvoor at a cost of R74.8 million;

• Installation of new pipelines, 3L2 dump reclamation and Top Star at Crown at a cost of R42.1 million;

• Ore Reserve development and improvement of infrastructure at ERPM at a cost of R30.1 million;

• Installation and development of infrastructure at ERGO at a cost of R104.1 million.

Total capital expenditure for fiscal 2007 was R313.0 million (including discontinued operations). Capital expenditures were

predominantly on Ore Reserve development and new underground mining equipment at all operations. Significant continuing capital

projects for fiscal 2007 included:

• Ore Reserve development, pipeline and PLC (Programmable logic controller) upgrades, new mobile cooling units and the

WAP project at Blyvoor at a cost of R68.5 million;

• Installation of new pipelines, 3L2 Dump reclamation and new buttresses at Crown at a cost of R30.0 million;

• Ore Reserve development and improvement of infrastructure at ERPM at a cost of R40.6 million;

• Upgrading of Philip Shaft infrastructure and Ore Reserve development at Vatukoula at a cost of R66.4 million; and

• Contributions to the West Wall refurbishment at Porgera of R27.4 million

Total capital expenditure for fiscal 2006 was R263.3 million (including discontinued operations). Capital expenditures were

predominantly on Ore Reserve development and new underground mining equipment at all operations. Significant continuing capital

projects for fiscal 2006 included:

• Ore Reserve development at Blyvoor at a cost of R56.7 million;

• Installation of new mills at Crown’s Knights Plant at a cost of R31.5 million;

• Improvement of infrastructure at ERPM at a cost of R13.5 million;

• Initial phase of the upgrading of Philip Shaft infrastructure, the replacement of outdated underground equipment and the

improved underground environmental control at Vatukoula at a cost of R33.4 million; and

• Contributions to the West Wall refurbishment at Porgera of R101.6 million.

We anticipate increasing our capital expenditure in fiscal 2009 by about 19% from our capital expenditure for fiscal 2008

on continuing operations. We expect to incur R299.7 million of capital expenditure on mining equipment and development,

upgrading existing underground operations and upgrading current metallurgical plants as follows:

• Blyvoor – R95.9 million;

• Crown - R55.7 million;

• ERPM - R22.9 million;

• ERGO Mining Joint Venture - R125.2 million.

Financing activities

Net cash outflow from financing activities was R840.0 million in fiscal 2008 compared to R98.7 million in fiscal 2007. In

fiscal 2006 the net cash inflow from financing activities was R452.3 million.

During fiscal 2008, we issued 6,229,607 shares for proceeds of R30.3 million. Of these shares, we issued 5,800,000 shares

to Investec raising R28.0 million in settlement of financing facilities and a portion of the Convertible Loan Notes and 429,607 shares

to the share option scheme for a consideration of R2.3 million.

During fiscal 2007, we issued 50,306,903 shares for proceeds of R315.6 million. Of these shares, we issued 50,132,575

shares to Investec raising R314.6 million in settlement of financing facilities and 174,328 shares to the share option scheme for a

consideration of R1.0 million.

During fiscal 2006, we issued 23,829,030 shares for proceeds of R203.3 million. Of these shares, we issued 17,815,945

shares to Investec raising R163.0 million in settlement of financing facilities and 629,009 shares to the share option scheme for a

consideration of R3.5 million. In addition we issued 4,451,219 shares to the IDC for loans we acquired from them for R28.9 million,

which the IDC previously held with Crown and ERPM. Furthermore, 932,857 shares were issued as payment for consulting

services rendered of R7.9 million.

Borrowings and funding

Our external sources of capital include the issuance of debt, bank borrowings and the issuance of equity securities, which

include the following:

Effective July 31, 2007 and March 1, 2008, Ergo Mining (Pty) Limited entered into two separate loan facilities, amounting

to R85.3 million, with AngloGold Ashanti Limited for the purchase of the remaining movable and immovable assets of Ergo. The

facilities are repayable in equal monthly installments over 23 and 19 months, respectively. The loans bear interest at the prime

lending rate, which was 15.5% at June 30, 2008. The loan is secured over the assets that were purchased from AngloGold Ashanti

Limited.

On September 13, 2006, we entered into a R257.0 million facility with Investec (Mauritius). We drew down

R242.4 million under this facility for the purpose of repaying the Senior Convertible Notes. At June 30, 2007, we had repaid a

portion of this amount by issuing 39,518,327 ordinary shares to the value of R213.8 million. The facility attracted interest at the

three-month LIBOR plus 3% and was secured by DRD (Offshore)'s shares in Emperor Mines Limited. The loan agreement

prohibited the Company from disposing of or further encumbering the secured assets and the facility was renewable. The loan was

repayable within 12 months after year end. On July 18, 2007 we repaid this facility by issuing 5,800,000 of our ordinary shares to

the total value of R28.0 million.

As at June 30, 2008 we had no bank borrowing facilities in place.

Anticipated funding requirements and sources

At June 30, 2008, we had cash and cash equivalents of R846.1 million, and positive working capital (defined as current

assets less current liabilities) of R761.8 million, compared to cash and cash equivalents of R105.4 million and negative working

capital of R179.7 million at June 30, 2007 and cash and cash equivalents of R488.9 million and negative working capital of

R312.2 million at June 30, 2006. At October 31, 2008, our cash and cash equivalents were R 644.5 million.

Our management believes that existing cash resources, net cash generated from operations will be sufficient to meet our

anticipated commitments for fiscal 2009 as described above.

Our estimated working capital, capital expenditure and other funding commitments, as well as our sources of liquidity,

would be adversely affected if:

• our operations fail to generate forecasted net cash flows from operations;

• there is an adverse variation in the price of gold or foreign currency exchange rates in relation to the US Dollar,

particularly with respect to the Rand; or

• our operating results or financial condition are adversely affected by the uncertainties and variables facing our business

discussed under Item 5A.: “Operating Results” or the risk factors described in Item 3D.: “Risk Factors.”

In such circumstances, we could have insufficient capital to meet our current obligations in the normal course of

business, which would have an adverse impact on our financial position and our ability to continue operating as a going concern.

We would need to reassess our operations, consider further restructuring and/or obtain additional debt or equity funding. There

can be no assurance that we will obtain this additional or any other funding on acceptable terms or at all.

5C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

We are not involved in any research and development and have no registered patents or licenses.

5D. TREND INFORMATION

During the first quarter of fiscal 2009, we produced 70,861 ounces at average cash costs of R188,967 per kilogram from our

continuing operations. Gold production from our continuing operations for the second quarter of fiscal 2009 is expected to be lower,

due to the suspension of drilling and blasting at ERPM in this quarter. As a result, cash costs for the second quarter of fiscal 2009

may be higher than that achieved during the first quarter of fiscal 2009.

For the full year fiscal 2009, we are forecasting gold production from our continuing operations of approximately 285,000

ounces at cash costs of approximately R186,656 per kilogram, based on an exchange rate assumption of approximately $1.00/R9.55.

Our ability to meet the full year’s production target could be impacted by, amongst other factors, seismicity, power shortages, lower

grades, restructuring of ERPM and safety-related stoppages. We are also subject to cost pressures due to increases in labor costs;

increases in crude oil, steel, electricity and water prices; unforeseen changes in ore grades and recoveries; unexpected changes in the

quality or quantity of reserves; unstable or unexpected ground conditions and seismic activity; technical production issues;

environmental and industrial accidents; gold theft; environmental factors; and pollution, which could adversely impact the forecasted

cash costs for fiscal 2009.

5E. OFF-BALANCE SHEET ARRANGEMENTS

The Company does not engage in off-balance sheet financing activities, and does not have any off-balance sheet debt

obligations, special purposes entities or unconsolidated affiliates.

5F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Payments due by period

Total

Less than

1 year

Between

1-3 years

Between

3-5 years

More than

5 years

R’000

Long-term loans (including interest).........................................

28,488

26,095

2,393

Purchase obligations – contracted capital expenditure

.............

79,366

DRDGOLD SA Employment share trust (including interest) .

237,065

60,577

147,044

29,444

Environmental rehabilitation, reclamation and closure costs

...

381,252

63,852

317,400

Total contractual cash obligations.......................................

726,171

166,038

66,245

147,044-

346,844

5G.

SAFE HARBOR

See “Special Note regarding Forward-Looking Statements.”

Represents planned capital expenditure for which contractual obligations exist.

Operations of gold mining companies are subject to extensive environmental regulations in the various jurisdictions in which they

operate. These regulations establish certain conditions on the conduct of our operations. Pursuant to environmental regulations, we

are also obliged to close our operations and reclaim and rehabilitate the lands upon which we have conducted our mining and gold

recovery operations. The gross estimated closure costs at existing operating mines and mines in various stages of closure are reflected

in this table. For more information on environmental rehabilitation obligations, see Item 4D.:“Property, Plant and Equipment” and

Note 19 “Provision for environmental rehabilitation, reclamation and closure costs” to our financial statements.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6A. DIRECTORS AND SENIOR MANAGEMENT

Directors and Executive Officers

Our board of directors may consist of not less than four and not more than twenty directors. As of June 30, 2008, our board

consisted of seven directors and as of June 30, 2007, six directors. With effect from August 21, 2008, our board increased to eight

directors.

In accordance with JSE listing requirements and our Articles of Association, one third of the directors comprising the board

of directors, on a rotating basis, are subject to re-election at each annual general shareholders’ meeting. Additionally, all directors are

subject to election at the first annual general meeting following their appointment. Retiring directors normally make themselves

available for re-election.

The address of each of our Executive Directors and Non-Executive Directors is the address of our principal executive

offices.

Executive Director

John William Cornelius Sayers (62) Chief Executive Officer. Mr. J.W.C. Sayers was appointed as Chief Financial Officer

on September 5, 2005. He has almost 40 years’ financial experience, most recently as Financial Director of Nampak Limited, from

1996 to 2004, and as Financial Director of Altron Limited, from 1989 to 1996, with a Bachelor of Science (Hons) degree in

Econometrics and Statistics. Mr. J.W.C. Sayers qualified as a chartered accountant in both England and South Africa. On December

11, 2006, Mr. J.W.C. Sayers was appointed as Chief Executive Officer with effect from January 1, 2007. Mr. J.W.C. Sayers’ contract

comes to an end on December 31, 2008, at which time he will retire. Mr. J.W.C. Sayers will be succeeded by Mr. Daniel Johannes

Pretorius, who will take over as CEO on January 1, 2009.

Daniel Johannes Pretorius (41) Chief Executive Officer Designate. Mr. D.J. Pretorius was appointed as Chief Executive

Officer Designate on August 21, 2008. Mr. Pretorius holds a B.Proc, LLB degree and was appointed Group Legal counsel for the

Company in February 2003. He has 15 years’ of experience in the mining industry. He was appointed as Chief Executive Officer of

DRDGOLD SA in July 2006 and is also a director of Rand Refinery Limited. Mr. D.J. Pretorius will succeed Mr. J.W.C. Sayers as

CEO on January 1, 2009.

Craig Clinton Barnes (38) Chief Financial Officer. Mr. C.C. Barnes joined the Company in August 2004 as Group Financial

Accountant. A Chartered Accountant, he has a B.Comm degree from the University of the Witwatersrand, or Wits University, and a

B.Com Honors degree from the University of South Africa, or Unisa. Prior to joining the Company, he was head of financial

reporting for Liberty Group Limited and he has over ten years’ financial experience. He was appointed as Chief Financial Officer of

DRDGOLD SA in July 2006 and as Chief Financial Officer of DRDGOLD on May 5, 2008.

Non-Executive Directors

Geoffrey Charles Campbell (47). Mr. G.C. Campbell was appointed as Non-Executive Director in 2002, as a Senior

Independent Non-Executive Director in December 2003 and as Non-Executive Chairman in October 2005. A qualified geologist, he

has worked on a gold mine in Canada. He then spent 15 years first as a stockbroker and afterwards as a fund manager, during which

time he managed the Merrill Lynch Investment Manager’s Gold and General Fund, one of the largest gold mining investment funds.

He was also Research Director for Merrill Lynch investment Managers. Mr. G.C. Campbell is Managing Director of Boatlaunch

Limited and a director of Oxford Abstracts. On June 26, 2006, he was appointed Non-Executive Chairman of Emperor Mines

Limited. He resigned as Non-Executive Chairman of Emperor Mines Limited on November 1, 2007, and on March 11, 2008 as a

Non-Executive Director when Emperor Mines Limited merged with Intrepid Mines Limited.

Robert Peter Hume (68). Mr. R.P. Hume was appointed as a Non-Executive Director in 2001. He has forty three years'

experience in the auditing field of which the last nineteen years were spent as a partner in the East London (South Africa) office of

KPMG. Since retirement in 1999, he has spent nine years as an investment manager at Sasfin Frankel Pollak in East London.

Mr. R.P. Hume is also a director of King Consolidated Holdings Limited.

Douglas John Meldrum Blackmur (64). Professor D.J.M. Blackmur was appointed as a Non-Executive Director in

October 2003. He holds a PhD in industrial relations from the University of Queensland and has a career which spans more than

35 years, primarily in the fields of management, corporate governance and research. He currently holds the position of Professor

Extraordinary at the University of the Western Cape. Professor Blackmur is also the chairman of the Parliamentary Constituency

Office Management Committee of the South African Deputy Minister of Foreign Affairs and a foundation member of the Ports

Regulator of South Africa. At the Annual General Meeting, or AGM, held at the company’s registered offices on November 28,

2008, the ordinary resolutions set out in the Notice of AGM, dated September 22, 2008, the resolution relating to the re-election of

Professor D.J.M Blackmur as a director was withdrawn. In terms of article 93 (b) of the company’s Articles of Association, Professor

Blackmur therefore ceased to be director of the company with effect from November 28, 2008. On December 4, 2008, the directors of

DRDGOLD, at a special meeting, resolved not to reappoint Professor Blackmur to the board.

James Turk (61). Mr. J. Turk was appointed a Non-Executive Director in October 2004. He is the founder and a director of

G.M. Network Limited (GoldMoney.com), the operator of a digital gold currency payment system. Since graduating from George

Washington University with a BA degree in International Economics in 1969, he has specialized in international banking, finance and

investments. After starting his career with Chase Manhattan Bank (now J.P. Morgan Chase) he joined RTB, Inc., the private

investment and trading company of a prominent precious metals trader in 1980. He moved to the United Arab Emirates in 1983 as

Manager of the Commodity Department of the Abu Dhabi Investment Authority. Since resigning from this position in 1987, he has

written extensively on money and banking.

Edmund Jeneker (46). Mr. E.A. Jeneker was appointed a Non-Executive Director on November 1, 2007. He is a trained

accountant and over the past 10 years specialized in business strategy and general management. He is the General Manager: Retail

Bank at ABSA Bank Limited. Prior to joining ABSA Bank he was the Western Cape Regional Manager at Deloitte and Touche

Chartered Accountants, where he was responsible for International trade and Investments in the Tax Division. He also headed up the

World Bank Competitiveness Fund in the Western and Eastern Cape and was Financial Controller: Corporate Finance at Mercantile

and General.

Senior Management

David Johannes Botes (51) Group Risk Manager. Mr. D.J. Botes (Dip Comm, HDip Tax) joined DRDGOLD on September

7, 1988 as Group Financial Manager. He was appointed Group Risk Manager on February 1, 2003. He has 25 years of financial

management experience.

Jacob Hendrik Dissel (50) Group Financial Manager. Mr. J.H. Dissel (B Comm Hons) joined DRDGOLD as Group

Financial Manager in October 1999. He has 25 years’ experience in the mining industry

Themba John Gwebu (44) Executive Officer: Compliance. Mr. T.J. Gwebu (B Iuris, LLB, LLM) is a qualified attorney who

worked as a magistrate prior to joining the Company in April 2004 as Assistant Legal Advisor. He was appointed to the position of

Company Secretary in April 2005 and Executive Officer: Compliance Officer on January 1, 2007.

Amanda Roxanne Hoosen (30) Manager Internal Audit and Compliance. Ms. A.R. Hoosen joined the Company in her

current position in October 2004. She is a graduate in accounting and international business from Drexel University in the United

States, and a Certified Public Accountant. She was previously employed in the United States by Cox Enterprises Incorporated and

Ernst and Young, LLP.

Andrew Norman Weir (44) Executive Officer: Human Resources. Mr. A.N. Weir holds a B.Soc Sci degree and a diploma in

advanced labor law, and he has also completed a Management Development Program, or MDP. He was appointed Group Strategic

Manager Human Resources on April 1, 2006 and Executive Officer: Human Resources on April 1, 2008. Mr. A.N. Weir has 20

years’ experience in the mining industry.

Henry Gouws (39) General Manager: Crown. Mr. H. Gouws graduated from Technicon Witwatersrand and obtained a

National Higher Diploma in Extraction Metallurgy in 1991. He completed a MDP in 2003 through Unisa School of Business

Leadership. He was appointed Operations Manager of Crown in January 2006 and General Manager in July 2006. He has 20 years’

experience in the mining industry.

Kevin Peter Kruger (40) Regional Engineering Manager. Mr. K.P. Kruger holds a BSc degree in mechanical engineering

from Wits University and joined the Company in 1994. Previously the Engineering Manager at the Company’s North West

Operations, he was appointed to his current position in April 2005.

Louis Charles Lamsley (60) Head of Properties Division. Mr. L.C. Lamsley who has a National Diploma in Metalliferous

Mining and a Mine Manager’s Certificate of Competency, was appointed to his current position in January 2008. He has 35 years’

experience in the gold mining industry, 27 years of which have been spent in management.

Hurwa Ben Nyirenda (45) General Manager: New Business and Strategic Liaison. Mr. H.B. Nyirenda joined the Company

as Technical Services Manager at Blyvoor in May 2004, transferring to the company’s North West Operations as Production

Manager in October 2004. He has been the Head of New Business for DRDGOLD SA since January 2006 and was appointed

General Manager: New Business and Strategic Liaison on April 1, 2008. A graduate of the Camborne School of Mines, England, he

holds a BSc (Hons) in Mining Engineering, an MSc in Mining Engineering from Wits University and an MBA from the Wits

Business School. A registered professional engineer with ECSA since 1998, he obtained his mine Manager’s certificate in 1995. He

has 17 years’ experience in the mining industry, in both gold and diamond sectors. He has also worked in the field of financial

management.

Cornelius Russouw (50) Executive Officer: Underground Operations. Mr. C. Russouw became General Manager at Blyvoor

in September 2006. He was previously Mine Manager at Harmony Gold Mining Company Limited’s Virginia Operations and has

held various mining-related positions within Harmony and GenGold/Gold Fields, during a career spanning 27 years. He has a B Tech

degree in mining engineering, a national diploma in Metalliferous Mining and a National higher diploma in Metalliferous Mining. He

was appointed Executive Officer: Underground Operations on January 1, 2008.

Wayne Swanepoel (45) Regional Human Resources Manager. Mr. W. Swanepoel was appointed to his current position on

April 1, 2005. Previously, he was Human Resources Manager at Crown and Senior Human Resources Manager at Rand Mines’

Duvha Opencast Colliery. He holds a BA degree from Rhodes University and has completed an MDP in Labor Relations, both at

Unisa’s School of Business Leadership, and an advanced diploma in Labor Law at the University of Johannesburg. He has 18 years’

experience in the mining industry.

Charles Methley Symons (54) Executive Officer: Surface Operations. Mr. C.M. Symons was appointed General Manager

Crown in 1997 and to his current position in January 2006. He holds a Masters degree in Business Leadership and a B.Comm degree

from Unisa, and he also has a National Diploma in Extractive Metallurgy. He was appointed Executive Officer: Surface Operations

on January 1, 2008.

Phillip Watters (52) General Manager Projects. Mr. P. Watters joined the Company in 2002 and took up his current position

on August 1, 2005. He was previously General Manager ERPM. Mr. P. Watters, who obtained a Mine Manager’s certificate in May

2004, has a total of 33 years experience in mining, 23 years of which were spent with Gold Fields and four with Anglo American. His

career includes both production and project management experience.

David Whittaker (52) Regional Geologist. Mr. D. Whittaker (BSc (Hons), Dip Mining Engineering, Dip Engineering) joined

DRDGOLD in 1996 and took up his current position in April 2005. He has 26 years’ experience in the mining industry.

Changes in our Board of Directors and Executive Officers

The following changes occurred in our board of directors and executive officers from July 1, 2007 to October 31, 2008.

Appointments

Title

Date

E.A Jeneker

Non-Executive Director

November 1, 2007

T.L. Njobe

Non-Executive Director

December 14, 2007

C.C. Barnes

Chief Financial Officer

May 5, 2008

D.J. Pretorius

Chief Executive Officer Designate

August 21,2008

Resignations

Title

Date

T.L. Njobe

Non-Executive Director

February 20, 2008

J.H. Dissel

Acting Chief Executive Officer and Alternate Director

May 5, 2008

Directors' Terms of Service

The following table shows the date of appointment, expiration of term and number of years of service with us of each of the

directors as at June 30, 2008:

Director

Title

Year first

appointed

Term of

current

office

Unexpired

term of

current office

J.W.C. Sayers

Chief Executive Officer

2005

2 years

6 months

G.C. Campbell

Non-Executive Director

2002

2 years

16 months

R.P. Hume

Non-Executive Director

2001

2 years

3 months

D.J.M. Blackmur

Non-Executive Director

2003

2 years

16 months

J. Turk

Non-Executive Director

2004

2 years

4 months

C.C. Barnes

Chief Financial Officer

2008

3 years

34 months

D.J. Pretorius

Chief Financial Officer Designate

2008

3 years

E.A. Jeneker

Non-Executive Director

2007

2 years

16 months

There are no family relationships between any of our executive officers or directors. There are no arrangements or

understandings between any of our directors or executive officers and any other person by which any of our directors or executive

officers has been so elected or appointed.

6B. COMPENSATION

Our Articles of Association provide that the directors' fees should be determined from time to time in a general meeting or

by a quorum of Non-Executive Directors. The total amount of directors' remuneration paid for the year ended June 30, 2008 was

R12.0 million. Non-Executive Directors receive the flowing fees:

• Base fee as Non-Executive Chairman of R900,000 per annum;

• Base fee as Senior Independent Non-Executive of R450,000 per annum;

• Base fee as Non-Executive Directors of R400,000 per annum;

• Annual fee for Audit Committee Chairman of R40,000;

• Annual fee for Audit Committee member of R20,000;

• Annual fee for Nominations Committee Chairman of R15,000;

• Annual fee for Nominations Committee member of R7,500;

• Annual fee for the Chairman of Remco, Risco and Transco of R30,000 each;

• Annual fee for members of Remco, Risco and Transco of R15,000 each;

• Half-day fee for participating by telephone in special board meetings;

• Daily fee of R15,000 and hourly rate of R2,000; and

• The Chairman of the board to receive committee fees.

The following table sets forth the compensation for our directors for the year ended June 30, 2008:

Directors

Basic

salary/fees

(R'000)

Retirement

fund

contributions/

bonus/restraint

trade/expenses

(R'000)

Total

(R'000)

Share

option

scheme

gains

(R'000)

Executive

JWC Sayers ......................................................

3,606

1,655

5,261

CC Barnes ........................................................

388

Subtotal ...........................................................

3,994

1,655

5,649

Non-Executive

G.C. Campbell..................................................

1,909

124

2,033

R. Hume ...........................................................

413

492

D.J.M. Blackmur..............................................

585

664

J Turk................................................................

441

521

EA Jeneker

238

Subtotal ...........................................................

3,586

362

3,948

Alternates

J.H. Dissel ........................................................

1,562

846

2,408

Subtotal ...........................................................

1,562

846

2,408

Total.................................................................

9,142

2,863

12,005

See also Item 6E.: “Share Ownership” for details of share options held by directors.

Compensation of senior management

Our senior management comprises its executive directors and executive officers. Under the JSE Listing Rules we are not

required to, and we do not otherwise, disclose compensation paid to individual senior managers other than Executive and Non-

Executive Directors. However, the aggregate compensation paid to senior management, excluding compensation paid to

Executive Directors, in fiscal 2008 was R35.0 million (fiscal 2007: R37.5 million), representing 21 executive officers in fiscal

2008 and 25 executive officers in fiscal 2007.

Bonuses or incentives are paid based upon performance against predetermined key performance indicators. Should an

executive director meet all the targets set in terms of such predetermined key performance indicators, he will be entitled to a bonus of

up to 50% of his remuneration package, depending on his particular agreement. Should an Executive Director not meet all the targets

set in terms of the predetermined key performance indicators, he will be entitled to a lesser bonus as determined by the Remuneration

and Nominations Committee.

Service Agreements

Service contracts negotiated with each executive and Non-Executive Director incorporate their terms and conditions of

employment and are approved by our Remuneration and Nominations Committee.

The Company’s executive directors, Mr. J.W.C. Sayers and Mr. C.C. Barnes, entered into agreements of employment

with us, on January 1, 2007 and May 5, 2008 respectively. These agreements regulate the employment relationship with Messrs.

J.W.C. Sayers and C.C. Barnes. Mr. D.J. Pretorius entered into an agreement of employment with DRDGOLD South African

Operations (Pty) Limited on July 1, 2006.

Mr. J.W.C. Sayers receives from us a remuneration package of R3.5 million per annum. Mr. J.W.C. Sayers is eligible

under his employment agreement, for an annual incentive bonus of up to 100% of his annual remuneration package in respect of

each of two bonus cycles over the duration of his appointment, on condition that he achieves certain key performance indicators.

Mr. C.C. Barnes receives from us a remuneration package of R2.3 million per annum. Mr. C.C. Barnes is eligible under

his employment agreement, for an incentive bonus of up to 50% of his annual remuneration package in respect of each of the three

bonus cycles of 12 months each over the duration of his appointment, on condition that he achieves certain key performance

indicators. As a further consideration for agreeing to remain in the employment of the company as set out in the agreement, the

company will issue Mr. C.C. Barnes with, up to 50% of his annual package, share options in DRDGOLD Limited on an annual

basis and on the third anniversary of this agreement a bonus payment equal to 30% of his annual package.

Mr. D.J. Pretorius receives from us a remuneration package of R2.6 million per annum. Mr. D.J. Pretorius is eligible

under his employment agreement, for an incentive bonus of up to 50% of his annual remuneration package in respect of each of

three bonus cycles of 12 months each over the duration of his appointment, on condition that he achieves certain key performance

indicators. DRDGOLD shall issue Mr. D.J. Pretorius with 100,000 ordinary DRDGOLD shares or alternatively shall pay

Mr. D.J. Pretorius the cash value of 100,000 ordinary DRDGOLD shares reckoned at market value on the date that the conversion

of mining rights of DRDGOLD’s South African operations is completed. As a further consideration for agreeing to remain in the

employment of the company as set out in the agreement, the company will issue Mr. Pretorius with, up to 60% of his annual

package, share options in DRDGOLD Limited on an annual basis and on the third anniversary of this agreement a bonus payment

equal to 30% of his annual package.

Each service agreement with our directors provides for the provision of benefits to the director where the agreement is

terminated by us in the case of our executive officers, except where terminated as a result of certain action on the part of the director,

or upon the director reaching a certain age, or by the director upon the occurrence of a change of control of us. A termination of a

director's employment upon the occurrence of a change of control of us is referred to as an “eligible termination.” Upon an eligible

termination, the director is entitled to receive a payment equal to at least one year's salary or fees, but not more than four years salary

or fees, depending on the period of time that the director has been employed. Upon an eligible termination, all options held by the

director under our share option scheme become exercisable by the director at any time prior to the closing of the transaction involving

a change of control or, in certain circumstances in the case of executive directors, during the thirty day period following the closing of

such a transaction. Additionally, upon an eligible termination, the executive directors become entitled to any of the shares granted to

such executive director that have not yet vested, subject to shareholder approval. Moreover, the Board of Directors may, at its

discretion, accelerate the issuance of shares granted to the executive directors that are scheduled to vest following the expiration of

the agreement in the event that the agreement automatically terminates and is not extended or replaced by another agreement with the

executive director. Non-Executive Directors receive an annual share allocation to the value of 60% of the fees the individual directors

received during 12 months preceding the allocation.

Messrs. G.C. Campbell, R.P. Hume, D.J.M. Blackmur, J. Turk and E.A. Jeneker each have service agreements which run

for fixed periods until October 31, 2009, September 30, 2010, October 31, 2009, October 31, 2010, and November 30, 2009

respectively. After their two year period, the agreements continue indefinitely until terminated by either party on not less than three

months prior written notice.

6C. BOARD PRACTICES

Board of Directors

As at October 31, 2008, the board of directors comprises three Executive Directors (Mr. J.W.C. Sayers, Mr. C.C. Barnes

and Mr. D.J. Pretorius), and five Non-Executive Directors (Messrs. G.C. Campbell, D.J.M. Blackmur, R.P. Hume, J. Turk and

E.A. Jeneker). The Non-Executive Directors are independent under the Nasdaq requirements and the South African King II

Report, with the exception of Mr. J. Turk, by virtue of his directorship of G.M. Network Limited (GoldMoney.com) in which we

had a 12.3% interest which was disposed of on September 17, 2008.

On accordance with the King II Report on corporate governance, as encompassed in the JSE Listings Requirements, and

in accordance with the United Kingdom Combined Code, the responsibilities of Chairman and Chief Executive Officer are

separate. Mr. G.C. Campbell is the Non-Executive Chairman, Mr. J.W.C. Sayers is the Chief Executive Officer and Mr. C.C.

Barnes is the Chief Financial Officer. Professor D.J.M. Blackmur was appointed senior independent Non-Executive Director. The

board has established a nominations committee, and it is our policy for details of a prospective candidate to be distributed to all

directors for formal consideration at a full meeting of the board. A prospective candidate would be invited to attend a meeting and

be interviewed before any decision is taken. In compliance with the Nasdaq rules a majority of independent directors will select or

recommend director nominees.

The board’s main roles are to create value for shareholders, to provide leadership of the Company, to approve the

Company’s strategic objectives and to ensure that the necessary financial and other resources are made available to management

to enable them to meet those objectives. The board retains full and effective control over the Company, meeting on a quarterly

basis with additional ad hoc meetings being arranged when necessary, to review strategy and planning and operational and

financial performance. The board further authorizes acquisitions and disposals, major capital expenditure, stakeholder

communication and other material matters reserved for its consideration and decision under its terms of reference. The board also

approves the annual budgets for the various operational units.

The board is responsible for monitoring the activities of executive management within the Company and ensuring that

decisions on material matters are referred to the board. The board approves all the terms of reference for the various

subcommittees of the board, including special committees tasked to deal with specific issues. Only the executive directors are

involved with the day-to-day management of the Company.

To assist new directors, an induction program has been established by the Company, which includes background

materials, meetings with senior management, presentations by the Company’s advisors and site visits. The directors are assessed

annually, both individually and as a board, as part of an evaluation process, which is driven by an independent consultant. In

addition, the Remuneration and Nominations Committee formally evaluates the executive directors and the alternate directors on

an annual basis, based on objective criteria.

All directors, in accordance with the Company’s Articles of Association, are subject to retirement by rotation and re-

election by shareholders. In addition, all directors are subject to election by shareholders at the first annual general meeting

following their appointment by directors. The appointment of new directors is approved by the board as a whole. The names of the

directors submitted for re-election are accompanied by sufficient biographical details in the notice of the forthcoming annual

general meeting to enable shareholders to make an informed decision in respect of their re-election.

All directors have access to the advice and services of the Company Secretary, who is responsible to the board for

ensuring compliance with procedures and regulations of a statutory nature. Directors are entitled to seek independent professional

advice concerning the affairs of the Company at the Company’s expense, should they believe that course of action would be in the

best interest of the Company.

Two of the Non-Executive Directors (Messrs. G.C. Campbell and R.P. Hume) have share options under the Company’s

share option scheme, but we do not believe that this interferes with their independence. No new share options were issued to Non-

Executive Directors since December 2004. See Item 6A.: “Directors, Senior Management and Employees” and Item 6E.: “Share

ownership”.

Board meetings are held quarterly in South Africa. The structure and timing of the Company’s board meetings, which are

scheduled over 2 or 3 days, allows adequate time for the Non-Executive Directors to interact without the presence of the executive

directors. The board meetings include the meeting of the Risk Committee, Audit Committee, Remuneration and Nominations

Committee and Transformation and Sustainable Development Committee which act as subcommittees to the board. Each

subcommittee is chaired by one of the Independent Non-Executive Directors who provide a formal report back to the board. Each

subcommittee meets for approximately half a day. Certain senior members of staff are invited to attend the subcommittee

meetings.

The board sets the standards and values of the Company and much of this has been embodied in the Company’s Code of

Ethics and Conduct, a copy of which is available on our website at www.drdgold.com. The Code of Ethics and Conduct applies to

all directors, officers and employees, including the principal executive, financial and accounting officers, in accordance with

Section 406 of the US Sarbanes-Oxley Act of 2002, the related US securities laws and the Nasdaq rules. The Code contains

provisions under which employees can report violations of Company policy or any applicable law, rule or regulation, including

US securities laws.

Executive Committee

As at October 31, 2008, the Executive Committee consisted of Mr. J.W.C. Sayers (Chairman), Mr. D.J. Pretorius, Mr. C.C.

Barnes, Mr. J.H. Dissel, Mr. D.J. Botes, Mr. A.N. Weir and Mr. T.J. Gwebu.

The Executive Committee meet on a bi-weekly basis to review current operations, develop strategy and policy proposals for

consideration by the board of directors. Members of the Executive Committees, who are unable to attend the meetings in person, are

able to participate via teleconference facilities, to allow participation in the discussion and conclusions reached.

Operational Committee

As at October 31, 2008, the Operational Committee consisted of Mr. D.J. Pretorius (Chairman), Mr. C.C. Barnes, Mr. J.H.

Dissel, Mr. D.J Botes, Mr. A.N. Weir, Mr. T.J. Gwebu, Mr. H.B. Nyirenda, Mr. C. Russouw, and Mr. C.M. Symons.

The Operational Committee meets on a weekly basis to review current operations in detail, implement its directives and

consider disclosure controls and procedures.

Board Committees

The board has established a number of standing committees to enable it to properly discharge its duties and

responsibilities and to effectively fulfill its decision-making process. Each committee acts within written terms of reference which

have been approved by the board and under which specific functions of the board are delegated. The terms of reference for all

committees can be obtained by application to the Company Secretary at the Company’s registered office. Each committee has

defined purposes, membership requirements, duties and reporting procedures. Minutes of the meetings of these committees are

circulated to the members of the committees and made available to the board. Remuneration for Non-Executive Directors for their

services on the committees concerned is determined by the board. The committees are subject to regular evaluation by the board

with respect to their performance and effectiveness.

The following information reflects the composition and activities of these committees.

Committees of the Board of Directors

Remuneration and Nominations Committee

As at October 31, 2008, the Remuneration and Nominations Committee consisted of Professor D.J.M. Blackmur

(Chairman), Mr. G.C. Campbell and Mr. R.P. Hume.

The Remuneration and Nominations Committee, which is comprised of Non-Executive Directors, has been appointed by

the board of directors. The committee meets quarterly, but may meet more often on an ad hoc basis if required. The Remuneration

and Nominations Committee is governed by its terms of reference and is responsible for approving the remuneration policies of

the Company, the terms and conditions of employment, and the eligibility and performance measures of the DRDGOLD (1996)

Share Option Scheme applicable to executive directors and senior management.

The committee’s objective is to evaluate and recommend to the board competitive packages which will attract and retain

executives of the highest caliber and encourage and reward superior performance. The committee also aims to ensure that criteria

are in place to measure individual performance. The committee approves the performance-based bonuses of the executive

directors based on such criteria. The Executive Officer: Human Resources provides the committee with access to comparative

industry surveys, which assist in formulating remuneration policies. As and when required the committee may also engage the

services of independent consultants to evaluate and review remuneration policies and related issues and brief members on

pertinent issues. The committee has in the past year engaged the services of such consultants to review the employment contracts

of the executive directors.

The remuneration policy, relating to the remuneration of directors and senior executives, is based on a reward system

comprising four principal elements:

• Basic remuneration, as benchmarked against industry norms;

• Bonuses or incentives, which are measured against agreed outcomes or Key Performance Indicators, or KPIs;

• Short-term rewards for exceptional performance; and

• Long-term retention of key employees based on scarcity of skill and strategic value, using share options granted under

the DRDGOLD (1996) Share Option Scheme or shares for the Executive Directors.

A copy of the policy is available by application to the Company Secretary at the Company’s registered office.

he board resolved to separate the Nominations Committee from the Remunerations Committee so that the former is

chaired by the chairman of the board. The terms of reference were approved in August 2008. Its duties include:

• making recommendations to the board on the appointment of new executive and non-executive directors, including

making recommendations on the composition of the board generally and the balance between executive and non-

executive directors appointed to the board;

• regular reviewing of the board structure, size and composition and making recommendations to the board with regard to

any adjustments that are deemed necessary;

• identifying and nominating candidates for the approval of the board to fill board vacancies as and when arise as well as

putting in place plans for succession, in particular for the chairman and chief executive officer; and

• making recommendations on directors who are retiring by rotation to be put forward for re-election.

As at October 31, 2008, the members of the Nomination Committee consisted of Mr. G.C. Campbell (Chairman), Mr.

R.P. Hume and Professor D.J.M. Blackmur.

Audit and Risk Committees

On February 11, 2005, the Audit and Risk Committees started conducting joint meetings in respect of the quarterly

meetings. The members meet and the business of each committee is handled in joint deliberations taking place on the issues

raised. The Audit Committee is chaired by Mr. R.P. Hume and the Risk Committee by Professor D.J.M. Blackmur. The reason for

the joint sittings is that there is a great deal of overlap between the financial risks discussed at Audit Committee level and at Risk

Committee level. The joint sittings of the Committees bring about better disclosure and ensure that the Company conforms more

closely to the process prescribed by the US Sarbanes-Oxley Act of 2002.

Audit Committee

As at June 30, 2008, the Audit Committee consisted of Mr. R.P. Hume (Chairman), Mr. G.C. Campbell and Mr. E.A.

Jeneker.

The Audit Committee is comprised solely of Non-Executive Directors, all of whom are independent. The primary

responsibilities of the Audit Committee, as set out in the Audit Committee charter, is to assist the board in carrying out its duties

relating to accounting policies, internal financial control, financial reporting practices and the preparation of accurate financial

reporting and financial statements in compliance with all applicable legal requirements and accounting standards. A copy of the

charter is available by application to the Company Secretary at the Company’s registered office.

The Audit Committee meets quarterly with the external auditors, the Company’s internal audit practitioner, the Chief

Financial Officer and the Internal Audit and Compliance Manager to review the audit plans of the internal auditors, to ascertain

the extent to which the scope of the internal audits can be relied upon to detect weaknesses in the internal controls and to review

the annual and interim financial statements prior to approval by the board. The Audit Committee reviews our annual results, the

effectiveness of our system of internal financial controls, internal audit procedures and legal and regulatory compliance. The

committee also reviews the scope of work carried out by our internal auditors and holds regular discussions with the external auditors

and internal auditors.

The committee appoints, re-appoints and removes the external auditors and approves the remuneration and terms of

engagement of the external auditors. The committee is required to pre-approve, and has pre-approved, non-audit services provided

by our external auditors. The Company’s external audit function is currently being undertaken by KPMG Inc.

The Company’s internal and external auditors have unrestricted access to the chairman of the Audit Committee and,

where necessary, to the Chairman of the board and Chief Executive Officer. All important findings arising from audit procedures

are brought to the attention of the committee and, if necessary, to the board.

Risk Committee

As at June 30, 2008, the Risk Committee consisted of Professor D.J.M Blackmur (Chairman), Mr. J. Turk, Mr. J.W.C.

Sayers and Mr. C.C. Barnes.

The Risk Committee was established in January 2004, with a non-executive chairman. Its overall objective is to assist the

board in its duties relating to risk management and control responsibilities, assurance issues, health, safety and environmental

compliance, and the monitoring and reporting of all these matters. The Risk Committee facilitates communication between the

board, the Audit Committee, internal auditors and other parties engaged in risk management activities. The terms of reference of

the Risk Committee can be obtained by application to the Company Secretary at the Company’s registered office.

The Risk Committee’s role is to ensure that:

• an effective risk management program is implemented and maintained;

• risk management awareness is promoted amongst all employees;

• risk programs (financing/insurance) adequately protect the Company against catastrophic risks;

• regular risk assessments are conducted;

• total cost of risk in the long term is reduced;

• the protection of the Group's assets is promoted throughout the Group;

• the health and safety and well being of all stakeholders is improved; and

• the Company’s activities are carried out in such a way so as to ensure the safety and health of employees.

The Risk Committee meets quarterly and reports to the board. Additional ad hoc meetings may be arranged as and when

required. Certain members of executive management are occasionally invited to attend Risk Committee meetings, such as the

Internal Audit and Compliance Manager, the Group Risk Manager, the Group Financial Manager, the Operational Managers, the

Group Legal Counsel, the manager responsible for safety, health and environment and the General Manager Assets and

Commercial.

Following the release of the King II Report, in South Africa, containing minimum practices to be adopted, we have

formulated a risk corporate governance structure, which has been approved by the board.

he system to manage risk involves all significant business and operational risks which could undermine the

achievement of business objectives and undermine the preservation of shareholders values. The significant risks facing the Group

including those at operations have been identified and have been included in Item 3D.: “Risk factors.” Individuals have been

appointed to address each risk and the results thereof are reviewed by senior management through regular risk meetings. The aim

of the internal control systems is for management to provide reasonable assurance that the objectives will be met. In addition to

the above initiatives the Group also employs third party consultants to benchmark our operations against other mining operations

throughout South Africa and worldwide.

An important aspect of risk management is the transfer of risk to third parties to protect the Company from any major

disaster. We have embarked on a program to ensure that our major assets and potential business interruption and liability claims

are covered by group insurance policies that encompass our operations. The majority of the cover is through reputable insurance

companies in London and Europe and the insurance programs are renewed on an annual basis. A cell captive has been established

to enable further reduction in annual insurance premiums.

Transformation and Sustainable Development Committee

The board taking into account that all the group’s operations are now based in South Africa and in order to achieve the

triple bottom line espoused in the King II Report and in order to reach the empowerment goal to which it is committed, it

established a new committee, the focus of which will be transformation and sustainable development. The terms of reference

were approved by the board at the August 2008 meeting. The objectives of this committee are:

• promoting transformation within the company and the economic empowerment of previously disadvantaged

communities, particularly within areas were the company conducts business;

• striving towards achieving the goal of equality as the South African constitution and other legislation require within the

context of the demographics of the country at all levels of the company and its subsidiaries; and

• conducting business in a manner which is conducive to internationally acceptable environmental and sustainability

standards.

As at October 31, 2008, the Transformation and Sustainable Development Committee consisted of Mr. E.A Jeneker

(Chairman), Mr. J.W.C. Sayers and Professor D.J.M. Blackmur.

6D. EMPLOYEES

Employees

The geographic breakdown of our employees (including contractors who are contracted employees employed by third

parties), was as follows at the end of each of the past three fiscal years:

Year ended June 30

2008

2007

2006

South Africa..................................................................................................................................

7,627

7,971

7,740

Australasia ...................................................................................................................................

769

2,653

Total.............................................................................................................................................

7,627

8,740

10,393

The total number of employees at June 30, 2008, of 7,627 comprises 1,371 contractors and 6,256 employees who are

directly employed by us and our wholly-owned Group companies. As of October 31, 2008, we had 7,312 employees. The decrease in

the number of employees in fiscal 2008 is mainly due to the disposal of Emperor Mines Limited in Australia.

s of June 30, 2008, the breakdown of our employees by main categories of activity was as follows:

Year ended June 30,

Category of Activity

2008

2007

2006

Mining - Our Employees................................................................................................................

3,431

3,953

5,286

Mining – Contractors .....................................................................................................................

1,371

1,541

1,397

Engineering.....................................................................................................................................

1,604

1,841

1,854

Metallurgy .....................................................................................................................................

637

697

944

Mineral Resources.........................................................................................................................

134

269

442

Administration...............................................................................................................................

180

236

280

Environmental ..............................................................................................................................

Human Resources..........................................................................................................................

159

Medical .........................................................................................................................................

Safety ............................................................................................................................................

Total..............................................................................................................................................

7,627

8,740

10,393

Labor Relations

As at June 30, 2008, we employed and contracted 7,627 people in South Africa. Approximately 70% of South African

employees are members of trade unions or employee associations. South Africa's labor relations environment remains a platform for

social reform. The National Union of Mineworkers, or NUM, the main South African mining industry union, is influential in the

tripartite alliance between the ruling African National Congress, the Congress of South African Trade Unions, or COSATU, and the

South African Communist Party as it is the biggest affiliate of COSATU. The relationship between management and labor unions

remains cordial. The DRDGOLD/NUM coordinating forum meets regularly to discuss matters pertinent to both parties at a

DRDGOLD SA level, while operations level forums continue to deal with local matters.

The NUM called for an industry wide safety strike on Tuesday December 4, 2007 to protest against the number of fatalities

in mining accidents. Agreements at our operations resulted in the release of Union office bearers to attend protest marches and no

disruptions to operations were experienced. This event marked the adoption by the NUM of a stance that all employees would take a

day of mourning when no production would take place whenever an employee was fatally injured in a mine accident. The principle of

“no work – no pay” has been applied to such events that have subsequently taken place at our operations.

Workers at Blyvoor embarked on an illegal work stoppage on Friday May 30, 2008. The illegal work stoppage was believed

to be related to worker concerns regarding the arrest of two employees by the South African Police Service who were allegedly

involved in the murder of one person and the assault of another in open fields on mine property during December 2007. The striking

workers responded to a court order served on May 30, 2008, prohibiting them from continuing with their illegal industrial action and

returned to work on Monday June 2, 2008.

COSATU called for a series of regional marches to protest against the increasing cost of electricity, with the protest marches

for Gauteng and North West Provinces taking place on Wednesday July 23, 2008. Agreements at our operations resulted in the

release of Union office bearers to attend the marches and no disruptions to operations were experienced. The COSATU action

culminated in a national strike on Wednesday August 6, 2008, which affected all our operations.

The wave of xenophobic violence that swept across Gauteng during April 2008 impacted on ERPM when the operation

experienced high levels of absenteeism after 3 employees were killed in xenophobic attacks. Most Mozambican citizens employed by

the mine were displaced from their homes in local communities. These employees and their families were accommodated in company

accommodation on a temporary basis until such time as they could be reintegrated into their communities.

There were no other material incidents of industrial action or labor unrest at our operations during fiscal 2008.

For Blyvoor, a two-year wage agreement (effective from July 1, 2007) with NUM, UASA and Solidarity was signed on

October 31, 2007. This agreement resulted in effective wage increases of 11% for fiscal 2009. Similarly, Crown and ERPM’s wage

agreements resulted in effective wage increases of 11.2% and 10.8% for Crown and ERPM respectively in fiscal 2009.

The Company is placing a greater emphasis on its Corporate Social Responsibility by becoming increasingly involved in

appropriate projects that give effect to the ideals of the Mining Charter and good corporate governance. We recognize the need for

transformation and have put structures in place to address this at both management and board level.

By statute we are required to pay each employee who is dismissed for reasons based on the operational requirements of

our operations, a severance package of not less than one week’s remuneration for every completed year of service. In specific

agreements with organized labor we undertook, as in the past, to pay packages equal to two weeks basic pay for every completed

year of service as part of a balancing compromise with the labor unions between the high additional costs of non-financial items

and incentive payments (which are deemed part of remuneration), and an additional one week benefit based on basic pay.

Operational requirements at ERPM necessitated the retrenchment of 239 employees during June 2008. These employees were

provided with counseling services and the opportunity to undergo skills training to be able to find employment outside the mining

industry.

AIDS represents a very serious threat to us and the gold mining industry as a whole in terms of the potential reduced

productivity and increased medical costs. The exact extent of infection in our workforce is not known at present, although it is

roughly estimated by the industry that the prevalence of HIV, the virus that causes AIDS, in the South African industry is currently

approximately 35% to 40%. We have several AIDS awareness campaigns in place at our operations.

Blyvoor has contracted Harmony’s Health Share to provide all health care services, including primary and occupational

health programs, a wellness program, which treats AIDS related illnesses, provides counseling on healthy life styles and monitors the

progression of the HIV virus.

Safety statistics

Due to the importance of our labor force, we continuously strive to create a safe and healthy working environment. The

following 2008 overall statistics for our managed mines (excluding Emperor) are reflected below (2007 statistics include Emperor,

but exclude Porgera):

Per million man hours)

Year ended June 30,

2008

2007

Lost time injury frequency rate (LTIFR)

................................................................................................

8.42

10.25

Reportable incidence

..............................................................................................................................

3.77

5.30

Fatalities....................................................................................................................................................

0.13

0.34

Number of fatalities (average per month)................................................................................................

0.33

0.75

Calculated as follows: actual number of instances divided by the total number of man hours worked multiplied by one million.

6E. SHARE OWNERSHIP

As of October 31, 2008, options to purchase ordinary shares held by directors were as follows:

Directors

Options at

June 30,

2007

Options

granted

during the

period

Average

Exercise

price (R)

Options

exercised

during the

year

Average

Exercise

Price (R)

Options

lapsed

during the

year

Options at

October 31,

2008

Expiration

Dates

Non-Executive

G.C. Campbell..............

57,994

57,994 3/20/2012-

6/17/2015

R.P. Hume ....................

77,907

77,907 10/1/2011-

6/17/2015

C.C. Barnes

218,081

144,300

362,381 11/1/2014-

10/29/2017

D.J. Pretorius ................

647,434

345,000

992,434 4/22/2013-

10/29/2017

Each option is representative of a right to acquire one ordinary share at a predetermined exercise price.

Closed periods apply to share trading by directors and other employees, whenever certain employees of the Company

become or could potentially become aware of material price sensitive information, such as information relating to an acquisition,

quarterly results etc., which is not in the public domain. When these employees have access to this information an embargo is

placed on share trading for those individuals concerned. The embargo need not involve the entire Company in the case of an

acquisition and may only apply to the board of directors, executive committee, and the financial and new business teams, but in

the case of quarterly results the embargo is group-wide.

Under the listings requirements of the JSE, we are not required to disclose, and we do not otherwise disclose or ascertain,

share ownership of individual executive officers in our share capital. However, to the best of our knowledge, we believe that our

ordinary shares held by executive officers, in aggregate, do not exceed one percent of the Company’s issued ordinary share capital.

For details of share ownership of directors see Item 7A.: “Major Shareholders.”

DRDGOLD (1996) Share Option Scheme, or the Scheme

We operate a securities option plan as an incentive tool for our Executive Directors, Non-Executive Directors and senior

employees whose skills and experience are recognized as being essential to the Company’s performance. In terms of the Scheme

rules, a maximum of 15% of the issued ordinary shares is reserved for issuance thereunder and no participant may hold options at any

time, which if exercised in full, would exceed 4% of our issued share capital at that time. As at October 31, 2008, the number of

issued and exercisable share options was approximately 5% of the issued ordinary share capital, which is within the National

Association of Pension Funds (United Kingdom) international accepted guideline of 3 to 5% for such schemes. In addition, the

participants in the Scheme are fully taxed at their maximum marginal tax rate on any gains realized on the exercise of their

options.

The price at which an option may be exercised is the lowest seven day trading average of the closing market prices of an

ordinary share on the JSE, as confirmed by our directors, during the three months preceding the day on which the employee is granted

the option. Each option remains in force for ten years after the date of grant, subject to the terms of the option plan. Options granted

under the plan vest at the discretion of our directors, but primarily according to the following schedule over a maximum of a three

year period:

Percentage vested in each period

Period after the original date of the option grant

25%

6 months

25%

1 year

25%

2 years

25%

3 years

Any options not exercised within ten years from the original date of the option grant will expire and may not thereafter be

exercised. The previous bi-annual allocation of options was changed in April 2006 to an annual allocation.

Options to purchase a total of 15,935,619 ordinary shares were outstanding on June 30, 2008, of which options to purchase

11,257,594 ordinary shares were currently exercisable. In fiscal 2008, a total of 101 employees participated in the Scheme including

Executive Directors, Non-Executive Directors and other senior employees. The outstanding options are exercisable at purchase prices

that range from R3.88 to R36.08 per share and expire ten years from the date of issue to the participants.

Certain Directors hold options which expire at various times. For those directors, a range is provided indicating the earliest and latest expiration

dates.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7A. MAJOR SHAREHOLDERS

As of October 31, 2008, our issued capital consisted of:

• 376,590,613 ordinary shares of no par value; and

• 5,000,000 cumulative preference shares.

To our knowledge, we are not directly or indirectly owned or controlled by another corporation or any person or foreign

government and there are no arrangements, the operation of which may at a subsequent date result in a change in control of us.

Based on information available to us, as of October 31, 2008:

• there were 6,536 record holders of our ordinary shares in South Africa, who held approximately 51,693,680 or

approximately 13.7% of our ordinary shares;

• there was one record holder of our cumulative preference shares in South Africa, who held 5,000,000 or 100% of our

cumulative preference shares;

• there were no US record holders of our ordinary shares, excluding those shares which are held as part of our ADR program;

and

• there were 520 record holders of our ADRs in the United States, who held approximately 228,785,440 (22,878,544 ADRs)

or approximately 60.8% of our ordinary shares.

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of October 31, 2008

by:

• each of our directors; and

• any person whom the directors are aware of as at October 31, 2008 who is interested directly or indirectly in 5% or more of

our ordinary shares.

Shares Beneficially Owned

Holder

Number

Percent

J.W.C. Sayers .............................................................................................................................................

D.J. Pretorius .............................................................................................................................................

C.C. Barnes.................................................................................................................................................

J. Turk.........................................................................................................................................................

G.C. Campbell.............................................................................................................................................

R.P. Hume ..................................................................................................................................................

E.A. Jeneker

D.J.M. Blackmur ........................................................................................................................................

Soges Fiducem SA (Brussels) ..................................................................................................................... 25,966,414

6.9%

Bank of New York ADRs .......................................................................................................................... .....

101 Barclay Street

New York, NY 10011

228,785,440

60.8%

Indicates share ownership of less than 1% of our outstanding ordinary shares.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment

power with respect to securities. Ordinary shares issuable pursuant to options, to the extent the options are currently exercisable or

convertible within 60 days of October 31, 2008, are treated as outstanding for computing the percentage of any other person. As of

October 31, 2008, we are not aware of anyone owning 5% or more of our ordinary shares other than the Bank of New York which

holds 60.8% of our issued ordinary shares through our ADR program and Soges Fiducem SA which holds 6.9%. Unless otherwise

noted, each person or group identified possesses sole voting and investment power with respect to the shares, subject to community

property laws where applicable. Unless indicated otherwise, the business address of the beneficial owner is: DRDGOLD Limited,

EBSCO House 4, 299 Pendoring Avenue, Blackheath, Randburg, South Africa.

Cumulative Preference Shares

Randgold and Exploration Company Limited, or Randgold, owns 5,000,000 (100%) of our cumulative preference shares.

Randgold's address is 23 Southerland Avenue, Craighall Park, Johannesburg, South Africa.

The holders of cumulative preference shares do not have voting rights unless any preference dividend is in arrears for more

than six months. The terms of issue of the cumulative preference shares are that they carry the right, in priority to the Company's

ordinary shares, to receive a dividend equal to 3% of the gross future revenue generated by the exploitation or the disposal of the

Argonaut mineral rights acquired from Randgold in September 1997. They will only obtain their potential voting rights once the

Argonaut Project becomes an operational gold mine, and dividends accrue to them. Additionally, holders of cumulative preference

shares may vote on resolutions which adversely affect their interests and on the disposal of all or substantially all of our assets or

mineral rights. There is currently no active trading market for our cumulative preference shares. No shareholder has voting rights

which differ from the voting rights of any other shareholder. On May 1, 2005, the Argonaut mineral rights reverted to the South

African State, in terms of the MPRD Act. On February 6, 2006, a prospecting right covering an area of 969 hectares over part of the

Argonaut Project was obtained.

7B. RELATED PARTY TRANSACTIONS

Rand Refinery agreement

On October 12, 2001, we entered into an agreement with RRL for the refining and sale of all of our gold produced in South

Africa. Under the agreement, RRL performs the final refining of our gold and casts it into troy ounce bars. RRL then sells the gold on

the same day as delivery, at the London afternoon close price on the day the gold is sold. In exchange for this service, we pay RRL a

variable refining fee plus fixed marketing, loan and administration fees. For fiscal 2008 this amounted to R2.3 million and

R2.9 million and R1.9 million for fiscal 2007 and 2006, respectively. Mr. D.J. Pretorius, CEO of DRDGOLD South African

Operations (Pty) Limited, is also a director of RRL and is a member of their audit committee. With the provisional liquidation of

Buffelsfontein Gold Mines Limited on March 22, 2005, our 10.6% interest in RRL decreased to our current ownership of 4.0%. RRL

is jointly owned by South African gold mining companies.

Management service agreements

We provide management services for DRDGOLD SA, Blyvoor, Crown, ERPM and DRD (Offshore) under management

service agreements entered into with each of them. These services include financial management, gold administration, technical and

engineering services, mineral resource services and other management related services. We own a 74% interest in DRDGOLD SA.

Blyvoor, Crown and ERPM are wholly-owned subsidiaries of DRDGOLD SA. These arrangements allow us to monitor and provide

input on the management of these companies in which we have an investment.

The management services at Blyvoor, Crown and ERPM are provided by DRDGOLD SA. DRDGOLD SA’s management

fee for services performed at Blyvoor was R14.3 million (2007:R15.2 million), Crown R14.3 million (2007:R15.2 million) and

ERPM R14.3 million (2007:R15.2 million). Management fees recovered from DRDGOLD SA were R17.5 million

(2007:R20.3million) and DRD (Offshore) were R5.9 million (2007:R20.3 million).

Consultancy agreement

On June 23, 2008, DRDGOLD SA approved a consultancy agreement with Khumo Gold, which owns 20% of DRDGOLD

SA. The agreement provides for a monthly retainer of R200 000

Completion of the sale of the Porgera Joint Venture

The sale of Emperor's 20% interest in the Porgera Joint Venture to Barrick and the capital return to shareholders were

approved by DRDGOLD's shareholders and Emperor's shareholders at the extraordinary general meetings held on July 27 and July

30, 2007 respectively. The sale transaction was completed on August 17, 2007 for a cash consideration of R1.9 billion ($255.0

million) and subsequently Emperor retired all its debt facilities. Emperor's capital return to its shareholders, amounting to R308.5

million (A$52.3 million), was completed on 3 September 2007 and DRDGOLD received its portion of the capital return, amounting

to R242.8 million (A$41.2 million).

Sale of Emperor

The sale of DRDGOLD's 78.72% interest in Emperor to 26 institutional investors, each acquiring between 0.4% and 21.6%

of the shares, was concluded on October 22, 2007 for a total consideration of R355.8 million (A$56.0 million), drawing to a close the

group's mining investment in Australasia

100

Ergo and Elsburg Joint Ventures

On June 7, 2007, we and Mintails announced the formation of the Ergo Joint Venture between Mintails SA and DRDGOLD

SA. Following discussions initiated in the first quarter of 2007, the Ergo Joint Venture parties agreed to pursue a strategy to

consolidate certain of their assets on the East Rand. Mintails SA contributed one fully refurbished carbon-in-leach, or CIL, circuit at

the Brakpan plant and DRDGOLD SA contributed the Elsburg tailings complex, comprising approximately 180 Mt of tailings. This

part of the project, previously referred to as Phase 1 of the Ergo Joint Venture, was subsequently established under the Elsburg Gold

Mining Joint Venture, or Elsburg Joint Venture. Mintails SA and DRDGOLD SA, through their subsidiaries, initially owned 50% of

the Elsburg Joint Venture and the Ergo Joint Venture.

On August 6, 2007, the parties to the Ergo Joint Venture entered into a sale of assets agreement with Anglo Gold Ashanti

pursuant to which it acquired the remaining moveable and immovable assets of Ergo for a consideration of R42.8 million. These

assets will be operated by the Ergo Joint Venture for its own account, under the Anglo Gold Ashanti authorizations, until new order

mining rights have been obtained. These assets, comprising servitudes (access agreements), infrastructure, piping, equipment, old

order mining rights and the right to an additional 15 Mt of tailings material, provide a platform to consolidate these tailings assets

with the Elsburg tailings.

On November 26, 2007, we announced that DRDGOLD SA signed a binding term sheet with Mintails SA, which provided

for significant expansion of the joint venture through:

• the planned refurbishment of all infrastructure at the Brakpan plant, to increase capacity from one CIL gold recovery circuit

to a plant capable of processing tailings for the recovery of gold, uranium and sulphuric acid; and

• substantially increasing available tailings material from 180 Mt to up to 1,700 Mt, by securing rights over tailings dumps

and slimes dams in the region.

Additional agreements were concluded on November 14, 2007 for:

• the acquisition by the Ergo Joint Venture of additional tailings properties and the Withok deposition complex from Anglo

Gold Ashanti for a payment of R45.0 million and assumption of rehabilitation obligations; and

• the acquisition by Mintails SA of an option to acquire tailings properties (the Grootvlei Properties), comprising some

105 Mt, from Pamodzi Gold Limited. The Grootvlei properties form part of the Mintails SA contribution to the expanded

Ergo Joint Venture.

The acquisition of the Withok deposition site provides the expanded Ergo Joint Venture with considerable additional

deposition capacity commensurate with the substantial increases in capacity for tailings material and processing. The expanded Ergo

Joint Venture is completing a feasibility study in December 2008, to refurbish and reopen the full Brakpan plant, which historically

produced gold, uranium and sulphuric acid.