South African gold producer Durban Roodepoort Deep (DRD) announced
yesterday that it intends to seek a listing on Papua New
Guinea’s (PNG) Port Moresby Stock Exchange.
One of PNG’s leading gold-miners, DRD has owned and operated
the Tolukuma gold-mine since 2000 and recently acquired the
‘oil search’ interest in the Porgera gold-mine joint
venture, in which it owns a 20% stake.
DRD spokesperson Ilja Graulich told Mining Weekly Online that the
listing would allow local fund managers and landowner groupings to
invest in the company.
“A number of funds have expressed interest in investing in
DRD and the listing will be a vehicle that would allow this,”
Graulich commented.
A Johannesbumineral crushing machine designrg-based analyst speculated that the move was aimed at
pleasing minority shareholders in Australian Emperor Mines, which
is listed in PNG. DRD last extended its full takeover offer for
Emperor Mines for another 28 days last Friday, offering one DRD
share for every five Emperor shares. The South African miner holds
a 19,8% stake in Emperor.
However, Graulich denied that this was the rationale behind the
proposed listing.
“It has nothinglimestone grinding mill to do with Emperor Mines. About 70% of the
group’s total production comes from Australasia, and we have
always been interested in the region.”
Annual production from the company’s PNG gold-mining
interests has risen to 300 000 oz/y. In the last quarter just under
a third of the company’s total gold production came from its
PNG operations, at the lowest cost within the DRD group.
“This growth, we believe, makes it imperative pre inspection checklist for crusherfor us to give
all PNG residents an opportunity to invest in our company, and so
in one of the country’s fastest-growing natural
resources-based industries,” said DRD executive chairperson
Mark Wellesley-Wood in a statement.
“A Port Moresby Stock Exchange listing for DRD gives
potential PNG investors in our company the simplest, most
straight-forward and equitable means of doing so.
“We encourage stakeholder participation along the lines of
empowerment deals being promulgated in South Africa. We have some
PNG shareholders already and some of our local employees have share
options in the company.”
A key attraction for investors in DRD worldwide, Wellesley-Wood
said, is the liquidity of the company’s stock.
“Ours is the most heavily traded gold stock in the world;
about five times DRD’s capital has traded over the past year,
with over four-million shares trading every day on average across
eight international exchanges.”
DRD is listed in South Africa, Australia, London, Paris, Brussels
and Frankfurt, as well as on Nasdaq.
Meanwhile, the Port Moresby Stock Exchange has welcomed DRD’s
intention to list.
“The listing is yet another major confidence boost for the
local market. It only shows the company’s commitment to PNG
and provides Papua New Guineans with the opportunity to invest in
the company,” the Port Moresby Stock Exchange said in a
letter to DRD.
Elaborating on the company’s commitment to the future of
PNG’s mining industry, Wellesley-Wood said DRD is the largest
holder of exploration tenements in the country, and will be seeking
development partners to assist in bringing several of these
promising targets into production.
DRD is currently on track to meet its 400 000-oz/y production
target in the Australasian region. The conclusion of the Emperor
deal will boost production to 407 000 oz/y.
Further, in terms of its current mining operations, DRD has applied
to good effect its experience of turning around deep-level South
African gold-mines at Tolukuma.
“When we took over four years ago, the mine had less than two
years of life left; since then we have extended this to beyond 2008
and grown production to 85 000 oz/y. We have increased employment
opportunities and contributed substantially to improvements in
community infrastructure.
“At Porgera, we believe there is considerable potential to
extend the life of mine beyond the current five years,”
Wellesley-Wood said.