South African miner continues Australasian drive into gold

THE South African mining giant, Durban Roodepoort Deep Limited (DRD), has continued its drive to gain a significant foothold in the Australasian gold mining industry.

The company, operating through its wholly-owned subsidiary DRD Australasia, has launched a $35 million takeover bid for Hargraves Resources NL, which mines Browns Creek gold mine at Blayney in New South Wales.

One of Hargraves’ main attractions is its recent acquisition of Diversified Mineral Resources NL, a gold exploration company with a focus on West Africa and which is also entitled to a royalty from the Burton coal mine in Queensland.

According to DRD chief financial officer Charles Mostert, the company intends offering one share plus 70 cents in cash for every seven Hargraves shares held. This represents a 41 per cent premium over the average price of Hargraves shares during the past thirty days’ trading.

DRD’s subsidiary is already a 19 per cent shareholder in Hargraves. Mr Mostert said Hargraves fits the company’s investment profile and growth strategy in the region.

“The combined group will leverage the skills of Hargraves in exploration and operating in the Australasian region and DRD’s extensive underground mining, mineral processing and tailings retreatment expertise, which will assist in development of Hargraves’ depth extension potential at its Brown Creek operation,” he said.

DRD plans to establish a global gold production operation with a base of between 400,000oz and 500,000oz per annum in Australasia. Mr Mostert said the acquisition of Hargraves was the first step in towards this goal.