As filed with the Securities and Exchange Commission December 22, 2006

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

OR

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

OR

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

OR

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

For the fiscal year ended June 30, 2006

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

Indicate 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, 2006 the Registrant had outstanding 320,035,078 ordinary shares, of no par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

Indicate 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 No

Indicate 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 past 90 days. Yes No

Indicate 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

Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 Item 18

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Contact details:

Mr. D.J. Pretorius – Group Legal Counsel

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

Telephone: +2711 219 8700

1

TABLE OF CONTENTS

Page

PART I

ITEM 1.

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

6

ITEM 2.

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

6

ITEM 3.

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

6

3A.

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

6

3B.

Capitalization and Indebtedness ..................................................................................................................................

8

3C.

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

8

3D.

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

8

ITEM 4.

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

21

4A.

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

21

4B.

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

26

4C.

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

38

4D.

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

39

ITEM 4A.

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

76

ITEM 5.

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

77

5A.

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

78

5B.

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

106

5C.

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

111

5D.

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

111

5E.

Off-Balance Sheet Items..............................................................................................................................................

111

5F.

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

112

5G.

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

112

ITEM 6.

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

113

6A.

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

113

6B.

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

117

6C.

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

119

6D.

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

122

6E.

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

124

ITEM 7.

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

126

7A.

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

126

7B.

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

127

7C.

Interest Of Experts And Counsel.................................................................................................................................

131

ITEM 8.

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

132

8A.

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

132

8B.

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

132

ITEM 9.

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

133

9A.

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

133

9B.

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

134

9C.

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

134

9D.

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

135

9E.

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

135

9F.

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

135

ITEM 10.

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

136

10A.

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

136

10B.

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

136

10C.

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

138

10D.

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

143

10E.

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

145

10F.

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

149

10G.

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

150

10H.

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

150

10I.

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

150

ITEM 11.

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

151

ITEM 12.

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

154

2

PART II

ITEM 13.

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

155

ITEM 14.

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

155

ITEM 15.

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

155

ITEM 16A.

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

156

ITEM 16B.

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

156

ITEM 16C.

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

156

ITEM 16D.

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

157

ITEM 16E.

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

157

PART III

ITEM 17.

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

158

ITEM 18.

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

F-pages

ITEM 19.

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

159

Explanatory Note Regarding the Omission from this Annual Report of Certain Financial Statements Required by Rule 3-09 of Regulation S-X

Prior to April 6, 2006, our shareholding in Emperor Mines Limited was 39.52% and consequently our investment in Emperor Mines Limited was accounted for by the equity method in our consolidated financial statements. On April 6, 2006 our shareholding in Emperor increased to 88.27% at which time it became a subsidiary of the Company and its results of operations were consolidated with the Group from that date. Rule 3-09 of Regulation S-X requires us to include in this Annual Report separate consolidated financial statements of Emperor Mines Limited as at April 6, 2006 and for the period from July 1, 2005 to April 6, 2006 (together, the "Emperor Financial Statements"). The Emperor Financial Statements are currently unavailable and have been omitted from this report. Upon the Emperor Financial Statements becoming available we will file an amendment to this Annual Report to include such financial statements. For financial information regarding Emperor Mines Limited during the period prior to it becoming a subsidiary, see Note 15 - Investments in Associates in our consolidated financial statements included elsewhere in this Annual Report and the consolidated financial statements of Emperor Mines Limited for the years ended June 30, 2005, 2004 and 2003 included elsewhere in this Annual Report. 

Prior to December 1, 2005, our shareholding in Crown Gold Recoveries (Pty) Limited was 40% and consequently our investment in Crown Gold Recoveries (Pty) Limited was accounted for by the equity method in our consolidated financial statements. On December 1, 2005 our shareholding in Crown increased to 85% at which time it became a subsidiary of the Company and its results of operations were consolidated with the Group from that date. Rule 3-09 of Regulation S-X requires us to include in this Annual Report separate consolidated financial statements of Crown Gold Recoveries (Pty) Limited as at December 1, 2005 and for the period from July 1, 2005 to December 1, 2005 (together, the "Crown Financial Statements"). The Crown Financial Statements are currently unavailable and have been omitted from this report. Upon the Crown Financial Statements becoming available we will file an amendment to this Annual Report to include such financial statements. For financial information regarding Crown Gold Recoveries (Pty) Limited during the period prior to it becoming a subsidiary, see Note 15 - Investments in Associates in our consolidated financial statements included elsewhere in this Annual Report and the consolidated financial statements of Crown Gold Recoveries (Pty) Limited for the years ended June 30, 2005, 2004 and 2003 included elsewhere in this Annual Report.

2

Preparation of Financial Information

We are a South African company and currently the majority 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 attached hereto are presented in
United States Dollars and in accordance with generally accepted accounting principles in the United States, or US GAAP. 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.

Certain information on this Form 20-F, or the Annual Report, presented in Rands, Australian Dollars, Fiji Dollars or Kinas has

been translated into Dollars. Unless otherwise stated, the conversion rates for currency translations for the 2006 fiscal year are R7.270 per
$1.00, A$1.370 per $1.00 and K2.853 per $1.00, which reflect the noon buying rate in New York City at June 30, 2006. For statement of
operations amounts, the average conversion rate for Rand during the 2006 fiscal year of R6.428 per $1.00, A$1.337 per $1.00 and K2.932
per $1.00 is used. The rates used for currency translations for transactions occurring during the 2005 and 2004 fiscal years are the
respective year end exchange rates for balance sheet amounts and the average exchange rate for that year for statements of operations
amounts. By including convenience currency translations in this Annual Report, we are not representing that the Rand, Australian Dollar,
Kina or Fiji Dollar amounts actually represent amounts shown in Dollars or that these amounts could be converted at the rates indicated
into Dollars.

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 Securities

Exchange Act of 1934 (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 otherthings:

•

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.

3

Imperial units of measure and metric equivalents

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

Metric

Imperial

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

4

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 ounce ........................ Cash costs are production 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
ounce are calculated by dividing cash costs by ounces of gold produced. Cash costs per ounce
have been calculated on a consistent basis for all periods presented. This is a non-US GAAP
financial measure and should not be considered a substitute measure of costs and expenses
reported by us in accordance with US GAAP.

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 and our 16% attributable share of the Ore

Reserves from the Porgera Joint Venture.

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.

5

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

between revenues from gold bullion delivered to refineries and profits or losses before taxation.
Total costs per ounce are calculated by dividing total costs by ounces of gold produced. Total
cots per ounce have been calculated on a consistent basis for all periods presented. This is a
non-US GAAP financial measure and should not be considered a substitute measure of costs and
expenses reported by us in accordance with US GAAP.

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.

6

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

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 of June 30, 2006 and 2005 and for the years ended June 30, 2006, 2005

and 2004 are derived from our consolidated financial statements set forth elsewhere in this Annual Report, which have been prepared in
accordance with US GAAP. These consolidated financial statements have been audited by KPMG Inc. as of June 30, 2006 and 2005 and
for the years ended June 30, 2006, 2005 and 2004. The selected consolidated financial data as of June 30, 2003 and 2002 and for the years
ended June 30, 2003 and 2002 are derived from audited consolidated financial statements not appearing in this Annual Report which have
been prepared in accordance with US GAAP. 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.

7

Selected Consolidated Financial Data

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

Year ended June 30,

2006

2005

2004

2003

2002

$’000

$’000

$’000

$’000

$’000

Consolidated Statement of Operations Data

Revenues........................................................................

245,301

183,609

183,254

109,419

143,262

Production costs.............................................................

(211,559)

(136,520)

(143,026)

(90,761)

(99,791)

Net operating (loss)/income ..........................................

(3,434)

6,597

(16,110)

47,237

(24,919)

(Loss)/profit from continuing operations before tax and

other items ..................................................................

(2,587)

(11,155)

(11,882)

59,406

(24,839)

Income and mining tax (expense)/ benefit....................

(3,299)

(5,762)

(14,230)

(15,830)

21,092

Equity in loss from associates .......................................

(19,943)

(20,511)

(11,975)

(6,867)

-

Minority interest ............................................................

(25)

(2)

(7)

-

-

Net (loss)/profit from continuing operations applicable

to common stockholders.............................................

(25,854)

(37,430)

(38,094)

36,709

(3,747)

Profit/(loss) from discontinued operation, net of taxes

2,023

(44,359)

(20,804)

(22,577)

(47,962)

Net (loss)/profit applicable to common stockholders...

(23,831)

(81,789)

(58,898)

13,959

(51,709)

Basic (loss)/profit per share - continuing operations

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

(9)

(15)

(17)

20

(2)

Basic profit/(loss) per share - discontinued operation

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

1

(17)

(10)

(12)

(30)

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

(8)

(32)

(27)

8

(32)

Diluted (loss)/profit per share - continuing operations

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

(9)

(15)

(17)

18

(2)

Diluted profit/(loss) per share (cents) - discontinued

operation .....................................................................

1

(17)

(10)

(12)

(30)

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

(8)

(32)

(27)

6

(32)

Consolidated Balance Sheet Data

Cash and cash equivalents.............................................

54,912

36,085

22,453

44,423

23,852

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

406,221

238,257

282,735

207,335

197,306

Total liabilities...............................................................

(272,336)

(158,330)

(200,194)

(197,145)

(212,777)

Long-term loans............................................................

(50,252)

(69,314)

(59,865)

(63,149)

(25,368)

Stockholders' (equity)/deficit .......................................

(103,014)

(79,053)

(81,612)

(10,190)

15,471

Total liabilities and stockholders' equity.......................

(406,221)

(238,257)

(282,735)

(207,335)

(197,306)

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

320,035,078   296,206,048

233,307,667

184,222,073

177,173,485

Non-US GAAP Financial Data

Working capital (deficit)/surplus ..................................

(45,468)

11,597

(24,993)

2,419

(34,311)

Cash costs per ounce

1

- continuing operations .............

458

315

307

275

205

Cash costs per ounce

1

- discontinued operation............

-

504

393

312

219

Cash costs per ounce

1

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

458

374

343

297

212

Total costs per ounce

2

- continuing operations.............

536

449

418

151

345

Total costs per ounce

2

- discontinued operation ...........

-

630

441

321

426

Total costs per ounce

2

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

536

506

428

250

388

1

Cash costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating Results.”

2

Total costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating Results.”

8

3B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3C. REASONS FOR THE OFFER AND THE USE OF PROCEEDS

Not applicable.

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, Papua New Guinea and Fiji; and

•

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

Risks related to our business and operations

A strong Rand and a weak gold price negatively affect our 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. Although the Rand depreciated against the
Dollar slightly in fiscal 2006 (based on the average exchange rate at June 30, 2006 and 2005), it has substantially appreciated against
the Dollar since December 2001. The appreciation of the Rand against the Dollar since December 2001 has had an adverse effect on
revenue received by us in Rands. These circumstances most adversely affected the North West Operations during fiscal 2005. Due to
the marginal nature of our mines in South Africa, any sustained decline in the market price of gold below the cost of production, could
result in the closure of our other South African 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.

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.

We generally 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, Kina and Fiji Dollar. 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 2005 and 2004, the Rand

appreciated against the Dollar by 9.8% and 23.9%, respectively, but in fiscal 2006, the Rand depreciated against the Dollar by 3.3%
(based on average exchange rates at June 30 of each year). As at June 30, 2006, even though the Rand depreciated against the Dollar
during the fiscal year, it has appreciated by 45.9% since reaching R13.44 = $1.00 in December 2001 (based on closing rates). In fiscal
2006, 2005 and 2004, the Kina appreciated against the Dollar by 3.1%, 3.9% and 13.7% respectively (based on average exchange rates at
June 30 of each year). The Fiji Dollar also depreciated against the Dollar by 2.4% in fiscal 2006, however appreciated against the Dollar
in fiscal 2005 and 2004 by 5.0% and 11.4%, respectively (based on average exchange rates at June 30 of each year).

A decrease in the gold price and a strengthening of the foreign exchange rate of the Rand, Kina and Fiji Dollar has resulted and

could continue to result in a decrease in profitability. In fiscal 2006 and 2005, 60% and 57% of production (including the discontinued
operation), respectively, was from South African mines providing significant exposure to the strengthening of the Rand and a decrease in
profitability. If the Rand continues to appreciate in such a manner, our South African Operations could continue to experience a reduction
in cash flow and profitability.

9

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

We incurred net losses of $23.8 million for fiscal 2006, $81.8 million for fiscal 2005 and $58.9 million for fiscal 2004, and we

may continue to incur losses in the future. Our profits and cash flows of the South African Operations are directly exposed to the strength
of the Rand and higher input costs as we generally do not hedge. These mines are also regarded as older, higher cost and lower-grade gold
producers. In addition to our ability to identify Ore Reserves that can be mined economically and to maintain sufficient controls on
production and other costs, the exchange rate fluctuations will have a material influence on the future viability of these mines. Our profits
and cash flows of the Australasian Operations have been negatively impacted by the decrease in production at all of these operations
during fiscal 2006. Production at the Australasian Operations decreased in fiscal 2006 mainly as a result of remediation work on the West
Wall of the open pit at Porgera, production problems at Tolukuma and a six-week shut down of operations at Vatukoula. Our profits and
cash flows of the Australasian Operations are dependant on resolving these production problems and on returning Tolukuma and
Vatukoula to profitability. 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 has been placed on a care
and maintenance program.

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. 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. In the absence of such financing, our ability to respond to changing business and economic conditions, make
future acquisitions, react to adverse operating results, meet out 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. In fiscal 2006, our ore reserves increased
with the acquisition of Crown Gold Recoveries (Pty) Limited, or Crown, East Rand Proprietary Mines Limited, or ERPM and
Emperor Mines Limited, or Emperor. In fiscal 2005 however, our Ore Reserves decreased primarily as a result of placing the North
West Operations into provisional liquidation and losing access to its ore reserves. Additionally, the strength of the rand caused a
decline in the Rand gold price in fiscal 2005. Mining higher grade reserves in our South African mines is likely to be more difficult in
the future and could result in increased production costs and reduced profitability. A failure to discover or acquire new 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. 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.

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

integrating them with our existing operations.

The successful transfer of management with regard to our recent acquisition of Emperor Mines Limited, or Emperor, as

disclosed in Item 4.: “Information on the Company,” and our success in acquiring control over potential future 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 if the acquired operation engages a public accounting firm different
from the one that we engage;

•

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

•

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.

Any difficulties or time delays in achieving successful integration of new acquisitions could have a material adverse effect on our
business, operating results and financial condition.

10

The ability to grow through acquisitions, particularly outside South Africa, may be restricted by not successfully achieving

our acquisition strategy.

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. Successfully acquiring mining assets may be hindered by the following:

•

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;

•

as a marginal gold producer, in the past we have acquired, and we plan to continue to acquire, marginal mines with relatively
higher production costs and lower returns. We may not be able to reduce the production costs or increase the returns on these
mines in the short to medium term, due to:

-

high employment costs;

-

accessibility of reserves on an economically feasible basis;

-

unexpected technical difficulties;

-

the inability to extend the life of mine; and

•

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

Any problems experienced by us 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.

Because we do not use forward sale arrangements to protect against low gold prices with respect to most of our production,

we are exposed to the impact of any significant drop in the gold price.

We do not intend to enter into new forward sale arrangements to reduce our risk of exposure to volatility in the gold price.

Accordingly, with respect to most of our production, we are not protected against decreases in the gold price therefore if the gold price
decreases significantly we run the risk of reduced revenues.

We do not control the operation at the Porgera Joint Venture.

We do not control the Porgera Joint Venture and as a result cannot unilaterally cause this entity to adopt a particular budget, pay

dividends or repay indebtedness, including debt held by us. Because we do not control this entity, its current management may not
continue to manage these entities in a manner that is favorable to us. With a minority interest stake in this entity, our ability to raise
funding is dependent on access to capital from its shareholders, other joint venture partners or third party financiers. Decisions which
reduce gold production, revenues or profitability, over which we have no control, may serve to reduce our cash flows and decrease our
profitability.

11

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 are evaluating our internal controls surrounding the financial reporting process in order to allow management to assess, and

our independent auditors to attest to, the effectiveness of these controls, as required by Section 404 of the United States Sarbanes-Oxley
Act of 2002. During the course of our ongoing evaluation, we have identified areas within our internal controls over the financial
reporting process that need improvement. As we design the appropriate remediation steps to address any deficiencies already identified,
we may identify other conditions that may result in significant deficiencies or material weaknesses in the future. This could impact our
ability to comply with Section 404 in a timely manner and in turn our independent auditors may not be able to attest to the effectiveness
of our internal controls over financial reporting. 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.

Failure to discover and remediate material weaknesses in our internal controls in relation to our US GAAP financial

reporting could have an adverse effect on our business.

During fiscal 2004, we discovered material weaknesses in our internal controls. Effective internal controls are necessary for us to

provide reliable US GAAP financial reports. Failure to prevent these material weaknesses from reoccurring and to provide reliable US
GAAP financial reports could have an adverse effect on our share price. Within the areas where our operations and accounting functions
are located in South Africa, Australia, but more particularly Papua New Guinea and Fiji, remedying these material weaknesses is
challenging in light of the limited availability of internal accounting employee candidates who have sufficient knowledge and experience
regarding the application of US GAAP and the United States Securities and Exchange Commission, or SEC, requirements and of
potential external advisers with US GAAP expertise to supplement our internal resources.

In response to these discoveries, we have been working to improve our internal controls over financial reporting, including in the

areas of compliance with US GAAP and SEC reporting requirements. We documented these efforts in the form of a US GAAP Action
Plan (see Item 15: “Controls and Procedures”) which we implemented during fiscal 2005. If we encounter any difficulties in sustaining
the application of our US GAAP Action Plan going forward, we could fail to meet our US GAAP reporting obligations. If we are unable
to sustain our US GAAP Action Plan, investors could lose confidence in our reported financial information, which could have a negative
effect on the trading price of our shares.

Our production costs may fluctuate and have an adverse effect on our results of operations.

Our historical production costs have varied significantly and we cannot predict what our production costs may be in the future.

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.

Significant increases in our production costs caused by one or more of these factors could have an adverse effect on our

business, operating results and financial condition.

12

Increased production costs would affect profitability.

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 South African 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 2005, we
entered into a two year wage agreement with the National Union of Mine Workers, or NUM, that provided wage increases of 6% as of
July 1, 2005 and 6.5% as of July 1, 2006. Similar two year wage agreements were entered into at Crown and ERPM, which provided
increases on October 1, 2005 of 6.5% and 11%, respectively. In addition, we have received notification of price increases, far in excess of
the current rate of inflation, to be imposed by our South African steel suppliers and parastatal entities which supply us with electricity and
water. These, combined with the increase in labor costs, could result in our costs of production increasing above the gold price received.
Discussions with suppliers to moderate price increases have so far been unsuccessful.

The costs of fuels, lubricants and other oil and petroleum based products have increased in fiscal 2006 as a result of the general

increase in the cost of crude oil in global markets. Due to the location of Tolukuma in the highlands of Papua New Guinea, all
transportation to the mine site is by heavy lift helicopters. Approximately $104 per ounce, or 17%, of production costs relate to
transportation, including the cost of JET A1 fuel for the helicopters. In the event that the increase in crude oil prices continues, this will
have a significant impact on production costs at Tolukuma and will increase the cost of mining at our other operations.

The increase in crude oil prices has also increased production costs at Vatukoula. Power generation, using diesel, represents

approximately 23% of the operating costs at Vatukoula. Increasing production costs at this operation will negatively impact on the
profitability of the Company. 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 has been placed
on a care and maintenance program.

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 laws and regulations. We have estimated

these liabilities at $82.0 million and included them in the discounted provision for the Group’s environmental rehabilitation, reclamation
and closure costs of $46.8 million on our balance sheet as at June 30, 2006. 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. 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. There was
continuing seismic activity in the area and on March 16, 2005, the Company closed the No. 2 Shaft because of concerns for the safety of
employees. Seismic activity has had, and may continue to have, a harmful effect on our business, operating results and financial
condition.

13

Our Papua New Guinea Operations are subject to environmental risks associated with tailings discharge.

Tolukuma and Porgera in Papua New Guinea have site specific environmental risks associated with their operations. Tailings are

routinely discharged into the surrounding river systems in accordance with approved environmental water discharge permits issued by the
Papua New Guinea Department of the Environment and Conservation under the Papua New Guinea Environmental Act 2000 and
Regulations 2000. The Papua New Guinea Government has approved disposal into certain natural rivers as the most appropriate method
for treated tailings and soft incompetent waste rock because the mines are located in extremely rugged mountainous terrain, subject to
seismic activity, high rainfall and landslides, so construction of a tailings impoundment would be very difficult and the risk of an
engineering failure high.

Due to the elevated concentrations of heavy metals naturally occurring in the ore, in particular lead, mercury and arsenic,

discharges are monitored in accordance with the terms of our approved environmental management monitoring program. Cyanide
associated with the tailings deposited is detoxified and cyanide levels are monitored daily. However, should we be unable to control the
levels of lead, mercury, arsenic or cyanide, it could pose potential adverse health risks to the surrounding communities and may result in
us violating our environmental water discharge permit and may expose us to civil and criminal liability. While our Papua New Guinea
Operations currently comply with the applicable license conditions established by the Papua New Guinea Government, the eventual,
cumulative environmental impacts could be greater than the estimates in, or contemplated by, the environmental plans and environmental
management monitoring programs approved by the Papua New Guinea Government. In such event the Papua New Guinea Government
could require us to remedy such consequences and the costs of such remediation could be material. We have also encountered opposition
from local people and landowners regarding our discharge of tailings. This opposition could cause delays or stoppages which could
reduce our production capacity and have an adverse effect on our business, operating results and financial condition.

Changes in Papua New Guinean Government legislation or policy on regulatory discharges into the environment could result in

operational disruptions, especially if the government changes the method it requires for us to test tailings discharges, and may have a
material adverse affect on profitability, as additional costs may need to be incurred to facilitate other waste discharge methods.

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

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

controlled, water from our workings could potentially rise to the surface or decant into surrounding underground workings 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. We expect that the 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 and pollution of ground water, streams and wetlands. These claims may have a

material adverse effect on our business, operating results and financial condition.

Underground and opencast mines in Papua New Guinea may experience flooding due to excessive annual rainfall. Flooding of

the mines may result in the death of, or personal injury to, miners, the loss of mining equipment, damage to or destruction of mineral
properties or production facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage and
potential legal liabilities. As a result, these events may have a material adverse effect on our business, operating results and financial
condition.

We have ageing assets in South Africa, which exposes us to greater risk of our infrastructure failing, higher maintenance

costs and potentially greater health, safety and environmental liabilities.

Our South African 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. The mature state of these assets, coupled with 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, particularly in South Africa where 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.

14

Due to the nature of our business, our employees face health and safety risks.

Regrettably seven people died in work-related incidents during fiscal year 2006. These fatalities were largely attributable to

seismicity-related rockfalls. 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. Preventing occupational diseases such as tuberculosis
and noise-induced hearing loss is a priority and is addressed through close adherence to legislated requirements. Mine and safety
regulations of the countries in which we conduct our operations impose various duties on us at our mines and grant 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 or reduce our production
capacity. This could have a material 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.

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 and liability insurance contains certain exclusions and limitations on coverage. We
have insured property, including loss of profits due to business interruption in the amount of $1.2 billion (R9.0 billion). Claims for each
and every event are limited by the insurers to $68.8 million (R500.0 million). This policy is limited by initial deductible amounts covering
the loss of surface and underground assets, and losses due to seismic events, machinery breakdown, flooding, fire and accidents. Business
interruption is only covered from the time the loss actually occurs. The deductible amounts vary between categories with the maximum
deductible of $5.5 million (R40.0 million). A specific limitation of $13.8 million (R100.0 million) applies for loss suffered or claims as a
result of landslides at Tolukuma, as well as a $13.8 million (R100.0 million) limitation for any seismic event smaller than 4.5 on the
Richter scale. General liability insurance cover is in the amount of $90.8 million (R660.0 million).

Future insurance coverage may not cover the extent of claims 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 decrease our profitability.

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. 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

Changes 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; and

•

interest rates.

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

extended period.

15

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. With effect from December 1, 2005, previously 40% owned mines, ERPM and Crown, are
now fully consolidated operations which consequently increased our 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.

16

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. 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 legal claims.

Underground and opencast mines in Papua New Guinea may experience pit wall failures, landslides and flooding, due to

excessive annual rainfall. The transport of supplies and employees to and from the mine site may be inhibited by incessant rain and
damage to roads. In addition, excessive land movement caused by excessive rain may destabilize existing building and plant
infrastructure and restrict access into the mines.

Fiji is fairly isolated in an area that gives rise to severe cyclonic storms which can be very disruptive. As in other island

states, rising sea levels caused by the greenhouse effect are a major concern. Natural disasters of this nature could potentially disrupt
our business for an extended period of time and this is of particular concern in Fiji due to the island’s exposure to such disasters in the
past. Tropical cyclone Ami hit Fiji on January 13, 2003, killing at least 15 people and leaving thousands more devastated.

Risks related to doing business in South Africa, Papua New Guinea and Fiji

Political or economic instability in the regions in which we operate 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 record highs of 20.6%. This increase in inflation resulted in considerable
year on year increases in operational costs. In recent years, the inflation rate has decreased however, as of June 2006, the Consumer Price
Inflation Index, or CPIX, stood at 4.8%, up from 3.5% since June 2005. Analysts expect inflation to decrease slightly over the next few
months but remain within the target band of 3-6%, partly due to the rapid growth in the private sector. A return to high levels of inflation
in South Africa, 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.

In South Africa, Papua New Guinea and Fiji there is a greater level of political and economic risk as compared to developed

countries in the world. For example, open pit operations at Porgera were suspended from August 27, 2002 to October 12, 2002, due to
interruptions in the electrical power supply as a result of election-related vandalism in Papua New Guinea. The next general election will
take place in 2007 and if volatile could adversely affect production. There is also a risk that social unrest and government intervention
could be exacerbated during the mine closure process. Mine infrastructure, including power, water and fuel, may be at risk of sabotage.

In Papua New Guinea, landowners in the area, whose interests are consolidated with those of the provincial government in a

Papua New Guinea registered entity, Mineral Resources Enga, or MRE, had an expectation of receiving from us a 5% stake in the
Porgera Joint Venture. This expectation arose from an undertaking we gave at the time of acquiring our interest in Porgera, to sell a 5%
stake to MRE on commercial terms, which was subsequently cancelled as MRE failed to meet certain conditions precedent after
renegotiated, extended deadlines. This issue may become the subject of some political campaigning and canvassing in the 2007 election.

The Porgera mine has also, on a number of occasions, experienced delays receiving operating permits and licenses, necessary for

this mine to conduct its operations. If at any time in the future permits essential to operations are not obtained, or exemptions not granted,
there is a risk that the Porgera mine may not be able to operate for a period of time. Future government actions, or actions of other quasi-
government or landowner groups, cannot be predicted but may impact on the operations and regulation of mines including the Porgera
Joint Venture. Any suspension of operations at the Porgera Joint Venture would decrease our attributable production and profitability.

17

Fiji’s economic growth has historically been very volatile. Growth has been restrained by low rates of investment, which has

been deferred by macro-economic instability, prohibitive regulation, and poor human and physical capital. Additionally, Fiji has also
experienced periodic political volatility in recent years. The country experienced a coup d’etat in March 2000 but the country’s
political environment has stabilized since 2000 following the first free and fair general election held in late 2001. The most recent
general election took place in May 2006 and the same government was re-elected. On December 5, 2006, the Commander of the

Republic of Fiji Military Forces declared a state of emergency. He also declared he had assumed control of the country and had
dismissed the elected Prime Minister and Government. Changes to the country’s constitution or government regulations in the future
and continued political instability could affect our operations in Fiji.

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 30% - 40% of the mining industry workforce in South Africa are HIV positive. The exact extent to
which our mining workforce both within and outside South Africa is infected with HIV/AIDS is unknown at this stage. Papua New
Guinea has also been identified as a high risk country for the HIV/AIDS pandemic and this could have a direct impact on our workforce
and productivity in that country. The exact impact of increased mortality rates due to AIDS-related deaths on the cost of doing business is
as yet undefined. The only available treatments for HIV/AIDS are anti-retroviral drugs, which slow down the advancement of the disease
but do not present a complete cure for the disease. The cost and availability of anti-retroviral drugs could inhibit the introduction of
treatment programs at our mines in South Africa and Papua New Guinea to reduce the impact of HIV/AIDS on our mining workforce and
our businesses. The existence of the disease poses a risk to us in terms of the potential reduction in productivity and increase in medical
costs.

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 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 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.
During fiscal 2007, we will submit 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 the
extent to which we may be compensated. 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 of or, in the case of mining rights, of non-optimal mining in accordance with the mining work program.

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The implementation of the MPRD Act will result in significant adjustments to our property ownership structure. 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.

Possible 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 has indicated that it is 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. The
Royalty Bill proposed a three percent royalty on gross revenue for gold mining companies. In conjunction with the South African Mining
Development Association we have made submissions to the government outlining our concerns about a revenue based royalty and
recommended a profit based royalty be introduced instead. In his budget speech in February 2004, the South African Finance Minister
acknowledged that the draft Royalty Bill may need some refinement, but also stated that government’s preference is for a revenue based
royalty, with introduction of the royalty as of 2009. After extensive consultations, the Royalty Bill was revised to reflect a significant
reduction of royalty rates compared to the proposals in the first draft but still proposes a revenue based royalty payment system. In
October 2006, the second draft of the Royalty Bill was approved and is open for comment until January 31, 2007. The introduction of the
proposed revenue based royalty would have an adverse effect on the business, operating results and financial condition of our South
African Operations.

The Broad Based Socio-Economic Empowerment Charter

The Broad Based Socio-Economic Empowerment Charter for the South African Mining Industry, or Mining Charter, establishes

certain numerical goals and timeframes to transform equity participation in the mining industry in South Africa and is effective from
May 1, 2004.

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.

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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 36% of our production costs for fiscal 2006, 43% for fiscal 2005 and 50% for fiscal 2004. As of

June 30, 2006, we employ and contract 10,393 people. Of these, 7,740 are employed in our South African Operations, 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 South African mines. For Blyvoor, we concluded agreements which are effective until June 2007 and for
ERPM and Crown, the current agreements are effective until October 2007. Unreasonable wage demands could increase production costs
to levels where our South African Operations are no longer profitable. This could lead to accelerated mine closures and labor disruptions.
We may also 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. A repeat of such activities could have an adverse effect on our business, operating results and financial condition.

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.

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 (formerly the Nasdaq SmallCap Market). On a
historical basis, the trading volumes and liquidity of shares listed on the JSE have been low in comparison with the Nasdaq Capital
Market. For the 12 months ended June 30, 2006, only 13% 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.

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Your 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 assessment. 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.

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ITEM 4. INFORMATION ON THE COMPANY

4A. HISTORY AND DEVELOPMENT OF THE COMPANY

Introduction

DRDGOLD Limited is a gold mining company engaged in underground and surface gold mining including exploration,

extraction, processing and smelting. In South Africa, we have an 85% interest in DRDGOLD South African Operations (Pty) Limited, or
DRDGOLD SA, the balance of which is held by our Black Economic Empowerment, or BEE, partner Khumo Gold SPV (Pty) Limited,
or Khumo Gold. 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. In Australasia, we have a 78.72% interest in
Emperor Mines Limited, or Emperor, which owns and operates the Tolukuma gold mine in Papua New Guinea, or PNG, and the
Vatukoula gold mine in Fiji. Emperor also has a 20% interest in the unincorporated Porgera Joint Venture in PNG, managed by Barrick
Gold Corporation, or Barrick. We also have exploration projects in South Africa, Papua New Guinea and Australia, though our principal
focus is on our operations in South Africa, PNG and Fiji.

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 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.

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 section and the Cason Dump surface retreatment operation was
initially acquired on October 10, 2002, by Crown. During fiscal 2006, we restructured our South African operations so that we hold an
85% interest in our newly created company, DRDGOLD SA, which in turn holds a 100% stake in ERPM, Crown and Blyvoor.

Since 1999, our focus has been to expand our operations outside South Africa and increase production from our Australasian

Operations. The Tolukuma mine (acquired from September 1999 to June 2001, in exchange for 8,125,082 shares and $3.3 million in
cash) provided an initial base in that region, and led to the acquisition of a 20% interest in the unincorporated Porgera Joint Venture
(acquired in October 2003, in exchange for 6,643,902 shares and $60.3 million in cash). During fiscal 2006, we concluded a sale and
purchase agreement with Emperor, where DRDGOLD initially held 88.3% of Emperor which in turn holds a 100% interest in Tolukuma,
a 100% stake in the Vatukoula mine in Fiji, a 20% interest in the Porgera Joint Venture and all of our exploration tenements in PNG.
Subsequently, our shareholding was diluted to 78.72%, following a number of share issues in which we did not participate.

To ensure access to global markets our shares and/or related instruments trade on the JSE, Nasdaq Capital Market (formerly the

Nasdaq SmallCap Market), London Stock Exchange, 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. As a result of the Emperor transaction, since Emperor was already listed on the Australian Stock
Exchange, or ASX, DRDGOLD Limited delisted from the ASX and the Port Moresby Stock Exchange in July 2006.

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.

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Important Events in Our Development Generally and in the Current Year

Crown Gold Recoveries (Pty) Limited, East Rand Proprietary Mines Limited and Blyvooruitzicht Gold Mining Company Limited

We own 100% of Crown Consolidated Gold Recoveries Limited, or CCGR, which in turn owned 40% of Crown. CCGR was

incorporated in South Africa on May 23, 1997. Pursuant to a scheme of arrangement, we acquired 100% of CCGR on September 14,
1998.

On June 12, 2002, we entered into an agreement with the Industrial Development Corporation of South Africa, or IDC, our

black economic empowerment partner, Khumo Bathong Holdings (Pty) Limited, or KBH, and CCGR whereby, with effect from
July 1, 2002, we sold 3% of the entire issued share capital of and shareholders loans held in Crown to KBH and 57% of the entire issued
share capital of and shareholders loans held in Crown to the IDC, for a total amount of $10.1 million. As part of this transaction, we
loaned KBH R5.3 million ($0.7 million) to fund its initial purchase of 3% interest in Crown. According to the terms of the shareholders
agreement entered into between these parties, the parties agreed that the IDC would not remain a shareholder in Crown, but would
transfer its shares and claims held in Crown to KBH. Accordingly, the IDC granted an option to KBH to purchase its shares and claims
held by it in Crown subject to certain terms and conditions. The option was exercised by KBH in July 2002 and KBH became the owner
of 60% of the entire issued share capital of and shareholders loans held in Crown. CCGR held 40% of the issued share capital of Crown,
which had four wholly-owned subsidiaries, Crown Mines Limited, City Deep Limited, Consolidated Main Reef Mines and Estate Limited
and ERPM.

On October 10, 2002, Crown entered into an agreement with third parties to purchase the entire issued share capital and all

shareholders’ claims of ERPM for a purchase price of $11.0 million. Crown’s acquisition of ERPM was approved by the South African
competition authorities. ERPM is predominantly an underground mining operation located near the town of Boksburg on the East Rand,
which is east of Johannesburg and approximately 60 miles (97 kilometers) from Blyvoor. We loaned Crown the sum of R60.0 million
($8.0 million) to facilitate its acquisition of ERPM. We subsequently loaned Crown an additional R9.9 million ($1.3 million), which
Crown in turn loaned to ERPM as working capital.

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. The intention 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 in 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 $4.3 million
(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 IDC, which agreed to a debt restructuring in
Crown. The new structure resulted in Khumo Gold acquiring, as a first step, a 15% interest in a newly created vehicle, DRDGOLD SA,
which holds a 100% interest in ERPM, Crown and Blyvoor. We have retained an 85% interest.

On November 18, 2005, we subscribed for $4.8 million (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 $1.2 million (R7.9 million), subscribe for $0.6
million (R4.1 million) new preference shares in ERPM, subscribe $0.4 million (R2.7 million) new preference shares in Crown, subscribe
for $0.6 million (R3.9 million) new preference shares in Blyvoor and subscribe for an initial 15% of the issued ordinary shares in
DRDGOLD SA for $2.0 million (R13.2 million). Khumo Gold has been granted an option, exercisable over three years, to acquire a
further 11% interest in DRDGOLD SA for the payment consideration of $1.4 million (R9.3 million). This further equity tranche will
include a 6% stake to be placed in a new employee trust.

On December 11, 2006, Khumo Gold exercised the option granted by us pursuant to the option agreement concluded between

us and Khumo Gold in October 2005. Khumo Gold acquired from us a further 50,000 ordinary shares in DRDGOLD SA for
$0.6 million (R4.3 million). After exercising the option, Khumo Gold's shareholding in DRDGOLD SA increased by 5% 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 $0.7 million (R5.1 million). After exercising the option, the trust's
shareholding in DRDGOLD SA is 6%. We will finance the transaction, on condition that the terms of the finance are determined by
independent experts to be fair and reasonable to our shareholders. It is proposed that we will subscribe for preference shares in Khumo
Gold and extend a loan to the trustees of the trust.

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Emperor Mines Limited

Over the period December 2002 to July 2004, we acquired a 45.33% interest in Emperor, an Australian listed gold mining

company with a single gold mine based in Vatukoula, Fiji and exploration assets in Fiji.

Our interest in Emperor was acquired through a series of transactions. As of December 31, 2002, we had acquired 14.15% of

Emperor for approximately A$11.9 million ($6.7 million). By April 2003, we had increased our percentage holding in Emperor through
additional purchases on the open market to 19.81% at a total additional cost of A$4.3 million ($2.6 million). At June 30, 2004, our
effective holding had decreased to 19.78% as a result of additional shares issued by Emperor during fiscal 2004. Given the size of our
holding, Emperor appointed two of our representatives to its board of directors in January 2003.

On March 8, 2004, we announced a conditional takeover offer to acquire all of the outstanding shares in Emperor that were not

already owned by us for a consideration of one of our shares for every five shares in Emperor held. At that time, the offer valued Emperor
at approximately A$105.0 million ($79.8 million). On June 10, 2004, we announced a revised final offer of five of our shares for every
twenty two shares in Emperor held. The revised offer represented a 14% increase over the previous offer. On July 30, 2004, our offer to
Emperor’s shareholders closed with us having received acceptances from Emperor’s shareholders representing approximately 25.55% of
Emperor’s issued capital, thereby increasing our shareholding in Emperor to 45.33%. Accordingly, we issued 6,612,676 shares in
exchange for the 29,097,269 Emperor shares to the value of $16.6 million, based on the market value of our shares on the date issued,
with share issue and transaction costs associated with the take over offer, amounting to $1.7 million.

With effect from August 3, 2004, Emperor’s board of directors appointed Mr. M.M. Wellesley-Wood as Managing Director of

Emperor and our Divisional Director: Australasian Operations at the time, Mr. R.L. Johnson as a Non-Executive Director of Emperor.
With effect from October 5, 2005, Emperor’s Board appointed our former Chief Operating Officer, DRDGOLD Australasia,
Mr. M.P. Marriott, as an Executive Director. Subsequently, Mr. M.P. Marriott resigned on March 9, 2006, Mr. M.M. Wellesley-Wood
and Mr. R.L. Johnson resigned on June 26, 2006.

On July 11, 2005, Emperor announced the finalization of a financial and operational restructuring package aimed at returning

them to positive cash flow and creating a sustainable, long-term future for the company and its operations. An A$10.0 million Convertible
Loan Facility was negotiated by the independent directors of Emperor. The financing package also included an agreement with ANZ
Bank, subject to a number of conditions, to a restructuring of Emperor’s debt servicing obligations to assist them with their restructuring
plan. The ANZ Bank also consented to the Convertible Loan Facility and the related security. The Convertible Loan Facility was
approved by the shareholders of Emperor on August 29, 2005 (we did not participate in the voting). In addition, in July 2005 we entered
into an operational support agreement negotiated on behalf of Emperor’s independent directors, pursuant to which we would provide
Emperor with management and technical services.

In Emperor’s fiscal 2005 annual report, its auditors issued an audit report with an emphasis of matter to the effect that until such

time as Emperor completed its financial and operational restructuring package, there remained a significant uncertainty as to whether
Emperor would continue as a going concern and, therefore, whether it would realize its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the annual report. In Emperor’s fiscal 2006 annual report, its auditors issued an
unqualified audit report.

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 holds our PNG assets,
comprising of 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). An amount of
$5.0 million is outstanding on the cash consideration and is repayable in two installments to DRD (Offshore) on March 30, 2007 and
June 30, 2007. This outstanding amount attracts interest at the London Inter-bank Offered Rate, or LIBOR, plus 2% per annum and
has been entered into on market related terms. Subsequent to June 30, 2006, the board of DRD (Offshore) has agreed to convert this
loan to equity. 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 addition to these loan facilities in October 2006, we committed to a $10.0 million working capital facility for Emperor. We

advanced funds to Emperor under this facility of $2.0 million on October 5, 2006, $5.0 million on November 6, 2006 and $3.0 million
on November 27, 2006. The loan bears interest at LIBOR plus 3% per annum and is repayable on December 31, 2007.

24

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 includes development
of higher grade areas at Philip Shaft and upgrading of associated shaft infrastructure. In addition, the entire workforce was to undergo
comprehensive assessment, re-skilling 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 has been placed on a care and
maintenance program.

The composition of Emperor’s Board of Directors includes Mr. G.C Campbell, a Non-Executive Director appointed on

June 26, 2006, as Chairman; Mr. B. Gordon, Emperor’s Chief Executive Officer appointed on April 26, 2006, as an Executive
Director; Mr. C. Moore, Emperor’s Chief Financial Officer appointed on February 20, 2006, as an Executive Director;
Mr. R. McDonald, a Non-Executive Director appointed on April 6, 2006; and Mr. I.D. Graulich, our Group Strategic Development
Officer, appointed on June 26, 2006, as a Non-Executive Director. On November 13, 2006, Mr. J.W.C. Sayers – Chief Financial
Officer and Executive Director of DRDGOLD Limited was appointed as a Non-Executive Director of Emperor. On November 22, 2006, Mr. C. Moore announced his resignation from Emperor. Mr. J.W.C. Sayers is the acting Chief Financial Officer of Emperor.

Porgera Joint Venture (Papua New Guinea)

Effective October 14, 2003, we acquired all the shares of Orogen Minerals (Porgera) Limited, or OMP, and Mineral Resources

Porgera Limited, or MRP, from Oil Search Limited, or OSL. The transaction was effected through the amalgamation of OML and MRP
and our wholly-owned subsidiary, Dome Resources (PNG) Limited which was subsequently renamed DRD (Porgera) Limited.

The transaction resulted in us acquiring an effective 20% interest in an unincorporated gold mining joint venture, the Porgera

Joint Venture, that has fifteen mineral tenements which form part of the Porgera mine located in Papua New Guinea. The final purchase
price of $77.1 million comprised $60.3 million in cash and 6,643,902 ($16.7 million) of our ordinary shares based on the prevailing
market value on November 22, 2003, being the final settlement date. As at June 30, 2006, the Porgera Joint Venture is owned by Barrick
(75%), DRD (Porgera) Limited (20%) and the MRE, on behalf of the Enga Provincial Governments and landowners in Papua New
Guinea (5%). Barrick acquired Placer Dome Inc. and by default its affiliate, Placer (PNG) Limited and took over as operator of the
Porgera Joint Venture in December 2005. Porgera is subject to the control of a management committee made up of representatives of the
joint venture partners, including one of our representatives. The management committee is governed by an operating agreement that
prevents the partners from acting unilaterally.

Buffelsfontein Gold Mines Limited

On March 9, 2005, the North West Operations suffered the effects of an earthquake which registered 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. 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.
On March 22, 2005, application was made to the High Court of South Africa for the provisional liquidation of Buffelsfontein Gold Mines
Limited, or Buffelsfontein (which owned the North West Operations), which order was granted on the same day.

We committed to pay the wages at Buffelsfontein’s operations until the end of March 2005, amounting to $4.5 million

(R27.9 million), and continued the essential services at the mine until such time as the liquidator had taken control of the mine, which
amounted to $0.8 million (R5.1 million). We incurred expenses of approximately $0.08 million (R0.5 million) during fiscal 2006 for a
social plan for employees, which included counseling and re-skilling programs, and we incurred legal and other costs of $0.5 million
(R3.2 million). We were reimbursed approximately $2.6 million (R16.7 million) by the liquidators for costs we incurred from the
inception of the liquidation. Additionally, an insurance claim was submitted for damage caused by the earthquake and as a result
approximately $16.2 million (R104.0 million) was paid out to the liquidators.

25

On October 6, 2005, we concluded an agreement with Simmer and Jack Limited, or S&J, for the sale of our shareholdings in

Buffelsfontein subject to certain conditions. These include indemnifying us against any liabilities or obligations that could arise relating to
environmental rehabilitation and the management and pumping of underground water. The proposed scheme of arrangement was
conditional upon the following:

•

Department of Water Affairs and Forestry, or DWAF, agreeing to substitute us with S&J to the extent that DWAF envisaged
imposing further responsibility on us;

•

the acceptance by the High Court of South Africa and the majority of Buffelsfontein’s creditors of a scheme arrangement
proposed by S&J; and

•

approval by the Competition Commission of South Africa.

On October 21, 2005, the scheme of arrangement for the acquisition of Buffelsfontein proposed by S&J and accepted by the

majority of Buffelsfontein’s creditors, including us, was approved and sanctioned by the High Court of South Africa. Buffelsfontein
applied to the High Court for the lifting of its provisional liquidation, which order was granted on November 1, 2005.

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 ($0.2 million), was granted an option to acquire Durban Deep’s mine village for
R15.0 million ($2.2 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 sold to them
on similar terms. We have since repudiated our agreement with M5 and have notified Rand Leases Properties Limited that we do not
intend offering the property to them. Both parties have indicated to us their intentions to institute legal proceedings for the sale and
transfer of the property. To date we have received no service of legal process related to this matter.

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.”

26

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 South African 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.

The Australasian Operations comprise open-pit mines, shafts and decline shafts, with appropriate mining methods.

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.

On May 12, 2006, the gold market reached a 26-year high of $730 per ounce. In the first half of the 2006 calendar year, the

gold price soared from $550 per ounce to over $700 per ounce in a matter of weeks and remarkably gained by 37%. There was some
considerable correction after that, but the price started tending upwards again in June 2006. One of the reasons for the significant rise
in the gold price has been the growth in Exchange Traded Funds, or ETFs, securities that allow investors to buy and sell gold in the
form of listed paper without the trouble of storing or insuring the product. These funds now hold some 16.6 million ounces of gold in
vaults – that is almost double the annual gold output (10.5 million ounces in 2005) of South Africa, the world’s biggest gold producer.
Stated in different terms, ETFs accounted for 5.2 million ounces, or 11% of the 46.76 million ounces of gold bought by investors in
2005. We believe these investment vehicles have facilitated institutional investors’ move into gold, bringing a new group of investors
to the market. We have supported the growing trend to expand gold ownership and accessibility through our investment in the
internet-based gold investment company, Net-Gold Services Limited, which now holds gold and silver in circulation to the value of
around $157.0 million.

27

We now have shareholdings in two stand-alone businesses: 85% in DRDGOLD SA and 78.72% in Emperor. Our total

revenue from continuing operations by geographic market is as follows:

Year ended June 30,

2006

2005

2004

1

$’000

$’000

$’000

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

148,785

68,370

90,066

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

96,516

115,239

93,188

245,301

183,609

183,254

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 on the day the gold is sold, 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% (2005: 3.0%) of RRL (which is jointly owned by South African mining companies). Mr. D.J. Pretorius, our
Group Legal Counsel and Chief Executive Officer of DRDGOLD SA, is a director of RRL.

The gold produced by Tolukuma is sold directly to AGR Matthey under an agreement signed by us in April 2005. Proceeds for

gold sold are received within two days of sale. The selling price is determined by the London Bullion Market Association spot price and
we are paid in Dollars. We do not have an interest in AGR Matthey.

The gold produced by Porgera is sold directly to Australia and New Zealand Investment Bank, or ANZ Investment Bank.

Proceeds for gold sold are received within two days from the swap confirmation report released by the refiners, AGR Matthey. The
selling price is determined by the spot price at the time of sale and we are paid in Dollars.

The gold produced by Vatukoula in Fiji is sold directly to AGR Matthey. Proceeds for gold sold are received within 6 days of

sale. The selling price is determined by Reuters quoted “London Spot Bid Price” which means the London bid price as published by
Reuters for two day settlement and we are paid in Dollars.

The contractual agreements in place with our refineries are of utmost importance to us because in order to sell gold, it needs to

be approximately 100% refined and none of our locations are able to refine gold to this saleable level.

Ore Reserves

The tables below set out the Proven and Probable Ore Reserves that are the Group’s Ore Reserves as of June 30, 2006 and

2005, in both imperial and metric units. Our Ore Reserves are comprised of our attributable Ore Reserves of our subsidiaries, as well

as our 16% attributable share of the Ore Reserves of the Porgera Joint Venture. Our attributable 16% share of the Ore Reserves of the
Porgera Joint Venture is based on the information disclosed by Placer Dome Inc. in a news release for its Fourth Quarter Results for
the period ended December 31, 2005 released on February 20, 2006

2

. The Porgera Ore Reserves are estimated as at

December 31, 2005 and adjusted for depletion to June 30, 2006, using appropriate cut-off grades associated with an average long-term
gold price of $400 per ounce, and on the Australian Dollar and Kina average long-term exchange rates to the US Dollar of A$1.39 =
$1.00 and K3.33 = $1.00.

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 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.

1

Revenue for fiscal 2004 has been restated for the disclosure of Buffelsfontein Gold Mines Limited as a discontinued operation.

2

As of December 31, 2005, Placer Dome Inc., or Placer Dome, held a 75% interest in the Porgera Joint Venture but was in the process

of being acquired by Barrick Gold Corporation. As a result, Placer Dome did not expect to have any statutory financial reporting
requirements for fiscal 2005, however, their Fourth Quarter Results Release was prepared in accordance with US generally accepted
accounting principles, or US GAAP.

28

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 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 includes a degree of uncertainty and depends 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.

For fiscal 2006, in respect of our South African assets, Ore Reserves were determined assuming a gold price of R117,055 per

kilogram ($582 per ounce). In respect of our Australasian assets:

•

Ore Reserves for Tolukuma were determined assuming a gold price of K1,840 per ounce ($582 per ounce);

•

Ore Reserves for Vatukoula were determined assuming a gold price of A$820 per ounce ($582 per ounce); and

•

Ore Reserves in respect of our 16% attributable interest in the Porgera Joint Venture, are as determined by Placer Dome as
set forth in its news release for its Fourth Quarter Results for the period ended December 31, 2005 as was released
February 20, 2006, assuming an average long-term gold price of $400 per ounce and average long-term exchange rates of
A$1.39 = $1.00 and K3.33 = $1.00.

29

For fiscal 2005, in respect of our South African assets, Ore Reserves were determined assuming a gold price of

approximately R88,960 per kilogram. The assumed Dollar gold price was approximately $381 per ounce. In respect of our
Australasian assets, Ore Reserves for Tolukuma were determined assuming a gold price of $381 per ounce at an exchange rate of
K3.44 = $1.00. Ore Reserves in respect of our 20% attributable interest in the Porgera Joint Venture, were as determined by Placer
Dome and set forth in its annual report for the fiscal year ended December 31, 2004, and filed with the SEC on Form 40-F on March
3, 2005, assuming a gold price of $350 per ounce and exchange rates of A$1.54 = $1.00 and K3.33 = $1.00.

In fiscal 2006, our attributable Ore Reserves increased by 57.1% from 5.6 million ounces at June 30, 2005

1

to 8.8 million ounces

at June 30, 2006, primarily as a consequence of the consolidation of ERPM and Crown as of December 1, 2005 in DRDGOLD.

Based on the revised Ore Reserves set forth below, the revised life of mine for each of our operations at June 30, 2006 were

as follows:

Underground

Surface

Mine

2006

2005

2006

2005

South Africa

Blyvoor

1

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

20 years

17 years

6 years

7 years

Crown

1

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

N/A

N/A

8 years

7 years

ERPM

1

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

9 years

5 years

7 years

8 years

Australasia

Vatukoula

2

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

8 years

5 years

N/A

N/A

Tolukuma

2

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

2 years

2 years

N/A

2 years

Porgera

2

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

10 years

3 years

11 years

11 years

Our Ore Reserves as of June 30, 2006 and 2005 are set forth in the table below.

1

We have an 85% interest in DRDGOLD SA which in turn has a 100% interest in Blyvoor, Crown and ERPM.

2

As at June 30, 2006, we had a 78.89% interest in Emperor which in turn has a 100% interest in Tolukuma and Vatukoula and a 20%

interest in the Porgera Joint Venture.

30

Ore Reserves: Imperial

At June 30, 2006

At June 30, 2005

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

1

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

20.08

0.19

3,716

7.61

0.16

1,210

12.32

0.22

2,713

4.57

0.18

825

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

19.22

0.02

329

-

-

-

26.21

0.02

460

-

-

-

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

39.30

0.10

4,045

7.61

0.16

1,210

38.53

0.08

3,173

4.57

0.18

825

ERPM

1

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

1.25

0.24

305

1.92

0.22

417

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

15.07

0.02

281

-

-

-

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

16.32

0.04

586

1.92

0.22

417

Crown

1

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

17.99

0.02

274

9.48

0.02

150

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

17.99

0.02

274

9.48

0.02

150

Australasian Operations:

Porgera

2

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

0.54

0.21

111

1.06

0.25

267

0.41

0.22

89

1.14

0.24

273

Surface ................................................................8.47

0.09

730

1.89

0.09

170

9.76

0.09

891

0.91

0.11

98

Total Porgera......................................................

9.01

0.09

841

2.95

0.15

437

10.17

0.10

980

2.05

0.18

371

Tolukuma

3

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

0.18

0.55

97

0.23

0.42

98

0.18

0.52

91

0.26

0.40

105

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

-

-

-

-

-

-

-

0.71

5

0.02

0.65

17

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

0.18

0.55

97

0.23

0.42

98

0.18

0.52

96

0.28

0.18

122

Vatukoula

3

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

1.07

0.36

383

0.97

0.30

295

Total Vatukoula .................................................1.07

0.36

383

0.97

0.30

295

Total Group

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

23.12

0.20

4,612

11.7

0.19

2,287

12.91

0.22

2,893

5.97

0.20

1,203

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

60.75

0.03

1,613

11.3

0.03

321

35.97

0.04

1,356

0.93

0.12

115

Total

4

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

83.87

0.07

6,225

23.1

0.11

2,608

48.88

0.09

4,249

6.90

0.19

1,318

1

Total Proven and Probable Ore reserves for fiscal 2006 reflect our attributable 85% interest in Blyvoor, ERPM and Crown.

2

Total Proven and Probable Ore reserves for fiscal 2006 reflect our 16% attributable interest in the Porgera Joint Venture. This is based on the information disclosed by Placer

Dome in its news release for the period ended December 31, 2005, as released on February 20, 2006 in accordance with US GAAP. At December 31, 2005, Placer Dome held a
75% stake in the Porgera Joint Venture, acquired subsequently by Barrick.

3

Total Proven and Probable Ore reserves for fiscal 2006 reflect our attributable 79% interest in Tolukuma and Vatukoula.

4

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.

31

Ore Reserves: Metric

At June 30, 2006

At June 30, 2005

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)

(tonnes)

(mill)

(g/tonne)

(tonnes)

(mill)

(g/tonne)

(tonnes)

South African Operations:

Blyvoor

1

Underground.................................................... 18.22

6.34

115,586

6.91

5.45

37.626

11.175

7.55

84.396

4.144

6.19

25.645

Surface............................................................. 17.44

0.59

10,236

-

-

-

23.777

0.60

14.304

-

-

-

Total Blyvoor ................................................. 35.66

3.53

125.822

6.91

5.45

37.626 34.952

2.82

98.700

4.144

6.19

25.645

ERPM

1

Underground.................................................... 1.14

8.35

9.48

1.74

7.45

12.962

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

13.67

0.64

8.72

-

-

-

Total ERPM ................................................... 14.81

1.23

18.20

1.74

7.45

12.962

Crown

1

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

16.33

0.52

8.51

8.60

0.54

4.683

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

16.33

0.52

8.51

8.60

0.54

4.683

Australasian Operations:

Porgera

2

Underground.................................................... 0.48

7.11

3.46

0.96

8.61

8.294

0.371

7.43

2.756

1.034

8.21

8.491

Surface ............................................................7.68

2.95

22.70

1.72

3.07

5.275

8.853

3.13

27.724

0.822

3.70

3.042

Total Porgera.................................................

8.16

3.20

26.16

2.68

5.06

13.569

9.224

3.30

30.480

1.856

6.21

11.533

Tolukuma

7

Underground.................................................... 0.16

18.98

3.02

0.21

14.42

3.043

0.160

17.60

2.823

0.237

13.79

3.269

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

-

-

-

-

-

-

0.006

23.58

0.157

0.024

22.36

0.540

Total Tolukuma ............................................. 0.16

18.98

3.02

0.21

14.42

3.043

0.166

17.84

2.980

0.261

14.58

3.810

Vatukoula

7

Underground.................................................... 0.97

12.33

11.93

0.88

10.45

9.177

Total Vatukoula............................................. 0.97

12.33

11.93

0.88

10.45

9.177

Total Group

Underground.................................................... 20.97

6.84

143.472

10.70

6.65

71.102 11.706

7.69

89.975

5.415

6.91

34.405

Surface............................................................. 55.12

0.91

50.164

10.32

0.97

9.958 32.636

1.29

42.185

0.846

4.23

3.582

Total8 .............................................................. 76.09

2.54

193.636

21.02

3.86

81.060 44.342

2.98 132.160

6.261

6.55

40.987

1

Total Proven and Probable Ore reserves for fiscal 2006 reflect our attributable 85% interest in Blyvoor, ERPM and Crown.

2

Total Proven and Probable Ore reserves for fiscal 2006 reflect our 16% attributable interest in the Porgera Joint Venture. This is based on the information disclosed by Placer

Dome in its news release for the period ended December 31, 2005, as released on February 20, 2006 in accordance with US GAAP. At December 31, 2005, Placer Dome held a
75% stake in the Porgera Joint Venture, acquired subsequently by Barrick.

7

Total Proven and Probable Ore reserves for fiscal 2006 reflect our attributable 79% interest in Tolukuma and Vatukoula.

8

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.

32

The measurement and classification of our proven and probable ore reserves are sensitive to the fluctuation of the gold price. If

we look at gold prices different from the gold price of R117,055 per kilogram ($582 per ounce) used to estimate our attributable Ore
Reserves of 8.8 million ounces of gold as of June 30, 2006 per the above Imperial schedule, we would have significantly different
reserves. Using the same methodology and assumptions as were used to estimate our Ore Reserves as of June 30, 2006 but with different
gold prices that are 10% above and below the R117,055 per kilogram ($582 per ounce) gold price used to estimate our attributable gold
reserves per our above schedules, our attributable gold reserves would be as follows:

Rand gold price per kilogram

R93,800

1

R105,300

R117,055

R128,700

Dollar gold price per ounce

$453

1

$524

$582

$640

Attributable Ore Reserves (million ounces)..................................

7.5

8.2

8.8

9.5

The approximate mining recovery factors for the 2006 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.............................

27.0

84.4

95.8

100.0

48.0

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

Not applicable

Not applicable

100.0

64.5

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

21.0

87.0

94.0

100.0

66.0

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

29.5

79.7

91.0

95.0

91.0

Vatukoula .........................

15.0

71.4

87.0

Not applicable

Not applicable

Porgera .............................. Not available

100.0

86.7

100.0

84.0

The approximate mining recovery factors for the 2005 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................................

30.0

85.2

95.8

100.0

45.0

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

29.5

79.7

91.0

95.0

91.0

Porgera ................................ Not available

100.0

86.7

100.0

84.0

The following table shows the average drill/sample spacing (rounded to the nearest foot), as at June 30, 2006, for each category of Ore
Reserves at our mines:

Mine

Proven

Reserves

Probable

Reserves

South Africa

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

16 ft. by 24 ft.

Nil

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

328 ft. by 328 ft.

328 ft. by 328 ft.

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

16 ft. by 19 ft.

Nil

Australasia

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

3 ft. by 39 ft.

33 ft. by 98 ft.

Vatukoula................................................................................................................

7 ft. by 656 ft

7 ft. by 656 ft.

Porgera....................................................................................................................

49 ft. by 49 ft.

98 ft. by 98 ft.

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.

1

We calculated the three-year historical average gold price to be approximately R93,800 per kilogram ($453 per ounce).

33

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 need 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 are in the process of being prepared and we plan to
submit them during the fiscal year 2007.

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.

34

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 tax formula which recognizes the high level of capital expenditure
required to sustain a mining operation over the life of mine. This results in an additional tax benefit, not afforded to other commercial

companies. In addition, the South African Government has indicated that it is looking at a revenue based royalty for mining companies, as
outlined in the draft Royalty Bill, which was released in March 2003 for comment. The draft Royalty Bill proposed a three percent
royalty on gross revenue for gold mining companies. In conjunction with the South African Mining Development Association we have
made submissions to the government outlining our concerns about a revenue based royalty and recommended a profit based royalty be
introduced instead. In his budget speech in February 2004, the South African Finance Minister acknowledged that the draft Royalty Bill
may need some refinement, but also stated that government’s preference is for a revenue based royalty, with introduction of the revenue
based royalty as of 2009. After extensive consultations, the Royalty Bill was revised to reflect a significant reduction of royalty rates
compared to the proposals in the first draft but still proposes a revenue based royalty payment system. In October 2006, the second
draft of the Royalty Bill was approved and is open for comment until January 31, 2007. The introduction of the proposed royalty would
have an adverse effect on the profitability of our South African Operations. We are currently evaluating the impact of the proposed
royalty.

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 have demonstrated 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. (See Item 4A.: “History and Development of the
Company”). However, at this point we are unable to set out a definitive timeline of when we will comply with our objectives before the
expiration of the 10 year time limit. We are also 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. Accordingly, it is not possible for us
to meet our obligations by disposing of our less profitable operations which would undermine the objectives of the Mining Charter. 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.

Mine 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 or reduce our production capacity.

35

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 2006, we contributed approximately $0.7 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.

Environmental Regulation in South Africa

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.

Managing the impact on the environment by mining operations is extensively provided for 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, 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.

36

Papua New Guinea

Mineral exploration and mining operations in Papua New Guinea are principally regulated by the following legislation:

•

Papua New Guinea Mining Act 1992 and Mining Regulations 1992, or the Mining Act and Regulations;

•

Mining Safety Act and Regulations; and

•

Papua New Guinea Environmental Act 2000 and Regulations 2000, or the Environmental Act and Regulations.

Current mining activities at Tolukuma are covered by a mining lease (ML104), granted under the Mining Act. The initial term of

this lease was for a period of 8 years, which was renewed for a further 10 years, expiring in 2012. The mining lease may be renewed for
further periods not exceeding 10 years in accordance with applicable laws. Current exploration activities are covered by a number of
exploration licenses. These licenses have been granted for a term not to exceed two years but can be renewed for further two-year periods.
In total, there are 11 exploration licenses or applications covering Tolukuma.

The Porgera Joint Venture has approval to work the Porgera deposit within the agreed development plan under the terms of the

Porgera Mining Development Contract, or the Porgera Contract, between the Government of Papua New Guinea and the members of the
Porgera Joint Venture. The Porgera Contract specifies, among other matters, the annual rents that must be paid for the Special Mining
Lease and the various classes of compensation that are payable to the landowners for the various land uses. The Special Mining Lease,
which expires in 2019, encompasses approximately 5,530 acres (2,240 hectares) including the mine area and the areas in which the
project infrastructure is located. There is no expiration date for the Porgera Contract, but it is tied to the continuation of the Special
Mining Lease. Leases for mining purposes have also been awarded by the Government of Papua New Guinea for land use associated with
the mining operation such as waste dumps, campsite, and an airstrip. Permits are held for water use, including run-off from
unconsolidated surfaces, such as the open pit, the underground mine and the waste dumps. These permits are renewable on a regular basis
and are subject to public hearing before approval.

Tolukuma and Porgera are operated subject to the requirements of the Mining Act and Regulations and the Mining Safety Act

and Regulations as applied by the Papua New Guinea Government. We believe all requisite licenses and permits are in good standing.

The Mining Safety Act and Regulations

The Mining Safety Act and Regulations sets out in detail the standards pertaining to safe and responsible mining. It lays down

the conditions a mining operation has to comply with to ensure that the health and safety of all workers is protected. It includes
requirements pertaining to worker training, risk assessment and safe working procedures with regard to all activities associated with
mining.

Environmental Regulations in Papua New Guinea

Tolukuma and Porgera are subject to the Environmental Act and Regulations which came into effect on January 1, 2004. The

Environmental Act and Regulations provide for objective criteria for regulating the impact of activities on the environment, as well as the
regulation of air and water pollution. Both Tolukuma and Porgera have a number of licenses and permits with which those respective
operations are required to comply.

The activities at Tolukuma and Porgera are categorized under the Environmental Act and Regulations as Level 3 activities

because of the size and complexity of their processes. Level 3 activities are subject to more rigorous regulation as they are regarded as
being more likely to create an adverse impact on the environment. Pursuant to the grandfathering provisions of the Environmental Act
and Regulations, both Tolukuma and Porgera are able to continue to operate under their existing environmental plans and permits.

An environmental plan for the mining related activity at Tolukuma was submitted to the Directorate Environment and

Conservation, or DEC, in Papua New Guinea, in November 1993 and was approved, subject to certain conditions, on May 24, 1994. The
three principal conditions were:

•

submission of an environmental management and monitoring program;

•

rehabilitation on a progressive basis throughout the life of mine;

•

progress reports every six months; and

•

develop a final site rehabilitation plan and submit the plan four years from the date of final plant commissioning.

Tolukuma submitted their environmental management and monitoring program in July 1994 and has adhered to its

requirements.

37

Similarly an environmental plan for mining related activity at Porgera was submitted in 1989 and was approved by the DEC.

A detailed review of the environmental issues and concerns for Tolukuma and Porgera are provided under Item 4D.: “Property,

Plant and Equipment – Description of Significant Subsidiaries, Properties and Mining Operations” under “Environmental and Closure
Aspects.”

Fiji

Environmental Regulation in Fiji

Managing the impact of mining on the environment is regulated by various statutes in Fiji, dealing with various mining and

mining-related activities and the effect that they may have upon the environment.

The Fijian Mining Act of 1978, or the Fijian Mining Act, regulates mining activities generally within Fiji and provides inter

alia:

•

the Director of Mines grants mining permits and leases under the Fijian Mining Act and has the power to attach conditions to
those permits or leases. In addition, the Director of Mines has power to cancel a lease or permit where the holder of that lease
or permit has failed to comply with certain requirements of the Fijian Mining Act;

•

the Fijian Mining Act places an obligation on the owners of mining leases in Fiji to take all necessary actions to restore land
once mining operations cease. There is also a requirement to pay compensation to land owners for any damage to the surface
of land caused by the mining operations; and

•

pollution of a watercourse is an offense, although permits can be obtained to authorize the deposit of sludge and tailings. The
Fijian Mining Act further requires all areas of subsidence to be clearly marked and fenced off with warning signs posted.

•

The Fijian Mining Act also contains provisions regulating the storage and protection of chemicals and poisons and
accompanying washes and antidotes, dust abatement requirements and the construction of dams.

The general penalty under the Fijian Mining Act, where the section does not impose a specific penalty, is a fine of F$200 or

six months imprisonment or both.

In addition to the Fijian Mining Act, the Rivers and Streams Act create temporary and special water rights. The Water Supply

Act imposes a penalty of F$100 for polluting a water supply.

Health and safety legislation also imposes upon employers a duty to take all practicable measures to minimize the risk of

explosions and to render safe hazardous conditions and materials.

As mining and environmental protection legislation in Fiji is still in the early stages of development, penalties for breaching

the existing mining and environmental protection legislation are relatively small compared to international standards. However, in
September 2006, the Fijian government announced that it would soon enact the Environment Management Bill, or the Bill, first
introduced on July 28, 2004. When passed, the Bill will introduce a number of environmental protection measures, many of which will
impact the mining industry. The Bill contains provisions imposing liability upon directors for offenses committed by a company.

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. In South Africa 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 and equity-limited unit trusts. As of
June 30, 2006, we held a total of $8.3 million in trust, the balance held in each fund being $1.8 million (2005: $1.8 million) for West
Wits, $2.8 million (2005: $2.5 million) for Blyvoor, $2.1 million (2005: $2.1 million) for Durban Deep, $0.9 million (2005: $0.9 million)
for Crown and $0.7 million (2005: $0.2 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.

38

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 calculated at June 30, 2006 at $46.8 million,

increased substantially from $22.6 million on June 30, 2005. The increase is attributable to the inclusion of the financial rehabilitation
provision for Crown, ERPM and Vatukoula.

4C. ORGANIZATIONAL STRUCTURE

The following chart shows our principal subsidiaries and joint venture as of June 30, 2006. 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.

South African Operations

100%

85%

100%

100%

100%

100%

100%

100%

Australasian Operations

79%

100%

100%

20%

100%

1

All shafts at Durban Deep have been closed.

2

West Wits will be used going forward to extract and dispose of underground water.

DRDGOLD Limited

West Witswatersrand Gold

Holdings Limited

Durban Deep

1

Crown Consolidated Gold

Recoveries Limited

Crown Gold Recoveried (Pty)

Limited

East Rand Proprietary Mines

Limited

Blyvooruitzicht Gold Mining

Company Limited

West Witwatersrand Gold 

Mines Limited

2

DRDGOLD South African

Operations (Pty) Ltd

Emperor Mines Limited

(Australia)

Tolukuma Gold Mines Ltd

(Papua New Guinea)

Vatukoula Mine (Fiji)

DRD (Porgera) Limited (Papua

New Guinea)

Porgera Joint Venture (Papua

New Guinea)

39

4D. PROPERTY, PLANT AND EQUIPMENT

The following maps set out the location of our mines in South Africa, Papua New Guinea and Fiji.

DRDGOLD’s South African Operations

DRDGOLD’s Australasian Operations

40

Description of Significant Subsidiaries, Properties and Mining Operations

South Africa

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 85% of the Blyvooruitzicht Gold Mining Company Limited, (through our 85% 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
35 million ounces of gold since inception. The net book value of the mining assets at Blyvoor is $48.0 million at June 30, 2006, with
5.3 million ounces of Ore Reserves.

On June 28, 2004, we entered into a 60-day review period on Blyvoor designed to restore the operations to profitability. The 60-

day review was extended to September 13, 2004. By October 5, 2004, 1,619 employees had been retrenched at a cost of $3.1 million,
with possible future restructuring initiatives depending on the economic circumstances. In terms of the agreement, organized labor
recorded its commitment to certain production targets, and undertook not to disrupt production for at least six months for reasons related
to restructuring of the operations. As of June 30, 2006, the mine has 4,520 employees, including contractors.

In August 2005, the 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 $12.5 million (R80.5 million). In total, the No. 2 Sub-Shaft Project, is 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. Phase 1 of the No. 2 Sub-Shaft Project - involving the re-
establishment of access to No. 2 Shaft from No. 5 Shaft and development and stoping of mining areas en route – was completed in the
first half of fiscal 2006. Phase 2 – involving the re-equipping of the sub-shaft has been reviewed. As a consequence of this review, it has
been decided, instead, to access the orebody between 27 and 35 levels from No. 5 Shaft. This approach is expected to lower the capital
cost of the project to $6.2 million (R40.0 million). Phase 2 is scheduled for completion in two years.

In August 2005, the Board also approved a $0.4 million (R2.3 million) expansion of the Slimes Dam Project which was

completed by the end of December 2005. This expansion involves the installation of an additional pump and wider gauge pipes in order to
ease congestion and further improve plant efficiency, together with the implementation of a number of in-plant process upgrades to ease
maintenance demands. A 24% increase in volume, a 12% increase in gold production, and a slight reduction in operating costs are
expected. The capital cost of the expansion was minimized by acquiring pipes, pumps and valves second-hand from AngloGold Ashanti’s
Ergo surface reclamation operation which closed in 2005.

41

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.

History

1937

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 $6.5 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 $3.1 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 includes ERPM, Crown and
Blyvoor. We own 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.

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 payshoots 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.

42

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 flowsheet comprising multi-stage crushing, open circuit primary and closed circuit secondary milling with hydrocyclones,
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.

In April 2001, we launched the Blyvoor expansion project. The project, valued at R65.0 million ($10.4 million), was funded

from the IDC loan granted to Blyvoor, for this purpose. This project was to facilitate the commissioning of additional infrastructure and
the opening up of additional mining areas to further enable the effective mining of reserves at Blyvoor.

In fiscal 2003, Blyvoor processed an average of approximately 70,000 tpm of ore from the underground section and 135,000

tpm from surface rock dumps. With the depletion of the surface rock dumps, only remnant amounts are available for processing.
Processing of material from the No. 4 and 5 slimes dam project, which was commissioned in December 2003, is building up to the
planned processing capacity of 240,000 tpm and will replace the processing of the surface rock dump material which has been depleted.
Initial processing of material took place from the No. 4 Slimes Dam and the recovery grades were below expectation. From August 2004,
the processing of material from the No. 5 Slimes Dam commenced and the recovery grade improved. With the conclusion of the 60-day
review entered into on June 28, 2004, certain shafts were placed on a “care and maintenance” program, resulting in a decrease to a total of
seven vertical and decline shafts.

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 is 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. Earlier than expected interceptions of the Alpha Dyke in the high-
grade No. 5 Shaft area during the third quarter of fiscal 2006, had a negative impact on production. Drilling to determine the extent of the
dyke was under way at year end and early indications were that it is at least 98 feet (30 meters) thick.

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.

Several major capital expansion projects were conducted over the period fiscal 2004 to fiscal 2006, including processing and

extension of Slimes Dams No. 4, 5 and 6 ($7.6 million), underground expansion projects ($1.5 million) and a water project ($0.4 million).
In fiscal 2006, approximately $8.8 million was spent mainly on opening-up and development at Blyvoor.

43

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
$6.9 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 $0.7 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 of 8 years and an average recovery grade of 0.02 ounces per ton at a cash cost of $200 per ounce of gold
produced. The project costs were funded from the R65.0 million ($10.4 million) loan facility from the IDC.

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 4 million gallons (14 million liters) per day. Water not used in the
operations is discharged into the Wonderfonteinspruit and the Doorndraai Dam. 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.

We have not conducted an assessment of the full scope of pollution to surface water as a result of the discharge from Blyvoor.

This is because the impact of our discharge cannot be addressed without addressing the impact from the discharge of other neighboring
mining operations. The Far West Rand Technical Forum has been established to address water issues in this area. The DWAF are
chairing this forum. The forum consists of government departments, NGO’s, mining companies and other interested and affected parties.
The Wonderfonteinspruit Action committee, of which Blyvoor is a member, has been established to look at the feasibility of cleaning up
the spruit. This committee reports to the main forum.

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 immediately. 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 environmental management program 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 is in the process of updating its EMP to meet the new requirements of the MPRD Act. The EMP will be submitted to

the DME for approval by the end of calendar 2006. 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, 2006, is $4.8 million. This has been included in the provision for environmental
rehabilitation, restoration and closure costs on our balance sheet. A total of $2.8 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.

44

Life of Mine

Based upon a gold price of approximately R117,055 per kilogram ($582 per ounce), at June 30, 2006, the Proven and Probable

Ore Reserves of Blyvoor were 5.3 million ounces. In fiscal 2005, based upon a gold price of approximately R88,960 per kilogram at
June 30, 2005, the Proven and Probable Ore Reserves of Blyvoor were 4.0 million ounces. The increase of 1.3 million ounces emphasizes
the sensitivity of the operation to the gold price. 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.

In light of the execution of the WAP project, we are reassessing the life-of-mine to 20 years, as at June 30, 2006.

Current Production

Blyvoor produced a total of 159,693 ounces of gold in fiscal 2006, with 120,178 ounces from underground areas and

39,515 ounces from surface areas. This represents 30% of our production from continuing operations of 527,401 ounces based on our
subsidiaries.

Underground gold production has decreased from 137,958 ounces in fiscal 2005 to 120,178 ounces in fiscal 2006. No shafts

were closed but increasing levels of seismicity were experienced in the high-grade No. 5 Shaft area in the first half of fiscal 2006.
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. Surface gold production increased from 23,920 ounces
in fiscal 2005 to 39,515 ounces in fiscal 2006.

Blyvoor ended fiscal 2004 facing considerable restructuring necessitated by the combined effect of a range of issues – the low

Rand gold price, price increases in key consumables, operational difficulties, increased lock-up in the plant due to the ending of surface
rock dump feed to the mill and poor initial recoveries from the Slimes Dam Project. As a result of operational difficulties, we also
announced a 60-day review of the operations on July 28, 2004 in order to restore profitability.

By the end of fiscal 2005, a significant turnaround had been achieved. While gold production from underground continuing

operations declined by approximately 30% to 137,958 ounces year on year, productivity improved by 32% to 125 grams per total
employee costed. Cash costs of $482 per ounce in fiscal 2006 increased from $456 per ounce in fiscal 2005. Total costs for fiscal 2006 of
$520 per ounce also show an increase compared to $498 per ounce in fiscal 2005.

The increase in cash costs from production and in the total costs per ounce of gold produced in fiscal 2006 is primarily

attributable to operational difficulties and a decrease in the recovered grade.

The following table details the operating and production results from Blyvoor for the past three fiscal years.

Year ended June 30,

2006

2005

2004

Production

Surface Operations

  Ore mined ('000 tons) .................................................................................................................................

4.005

3,233

2,522

  Recovered grade (oz/ton)............................................................................................................................

0.010

0.007

0.014

  Gold produced (ounces)..............................................................................................................................

39,515

23,920

34,883

Underground Operations

  Ore mined ('000 tons) .................................................................................................................................

742

649

916

  Recovered grade (oz/ton)............................................................................................................................

0.162

0.213

0.216

  Gold produced (ounces)..............................................................................................................................

120,178    137,958     198,211

Total ounces produced..................................................................................................................................

159,693    161,878    233,094

Results of Operations ($)

Revenues ('000)............................................................................................................................................

83,635

68,370

90,066

Production cost ('000) .................................................................................................................................

76,936

73,814

90,366

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

1

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

482

456

388

Total cost per ounce of gold ($)

1

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

520

498

427

1

Cash cost per ounce and total cost per ounce are non-US GAAP financial measures 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 production costs see
Item 5A: “Operating Results.”

45

Crown

Overview

We own 100% of CCGR, which in turn owned 40% of Crown. CCGR was incorporated in South Africa on May 23, 1997.

Pursuant to a scheme of arrangement, we acquired 100% of CCGR on September 14, 1998. Additionally, in October 2002, we entered
into an agreement with third parties to purchase the entire issued share capital and all shareholders’ claims of ERPM for a purchase
price of $11.0 million. Until November 30, 2005 we accounted for our 40% interest in Crown under the equity method. 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 currently own 85% of Crown, which we consolidated as a subsidiary from December 1, 2005, through our 85%
holding in DRDGOLD SA.

On December 11, 2006, Khumo Gold exercised the option granted by us pursuant to the option agreement concluded between

the parties in October 2005. Khumo Gold acquired from us a further 50,000 ordinary shares in DRDGOLD SA for $0.6 million
(R4.3 million). After exercising the option, Khumo Gold's shareholding in DRDGOLD SA increased by 5% 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 $0.7 million (R5.1 million). After exercising the option, the trust's shareholding in
DRDGOLD SA is 6%. We will finance the transaction, on condition that the terms of the finance are determined by independent
experts to be fair and reasonable to our shareholders. It is proposed that we will subscribe for preference shares in Khumo Gold and
extend a loan to the trustees of the trust. For a full description of the transactions associated with our acquisition of Crown, see Item
4A: “History and Development of the Company.”

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 178,000tpm. Crown undertakes the
retreatment of surface sources deposited as tailing from non-operating mining sites across central Johannesburg.

At June 30, 2006, Crown had 971 employees, including a small number of 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 property 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, 2006, the net book value of Crown’s mining assets was approximately $24.9 million.

46

History

1979

Rand Mines Limited directors approved the formation of the company Rand Mines Milling & 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 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 own 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.

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 the 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 for South Africa is provided by Eskom, which is government owned. Eskom is the largest producer of electricity

in Africa. In South Africa, Eskom operate

s a national power supply grid consisting of 24 power stations across the country. 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, 2006, 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.

47

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.

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.

At Crown, the process of updating the EMP continues to include all requirements of the MPRD Act. This will be submitted to

the DME for approval by the end of calendar 2006.

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, 2006, is approximately $17.7 million. A total of $0.9 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.

Life of Mine

Based upon a gold price of approximately R117,055 per kilogram ($582 per ounce), at June 30, 2006, our 85% share of the

Proven and Probable Ore Reserves of Crown was 0.4 million ounces. In fiscal 2005, based upon a gold price of approximately R88,960
per kilogram, our 40% share of Proven and Probable Ore Reserves of Crown was 0.3 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 is estimated to be eight years.

48

Current Production

Our attributable share of gold production for Crown was 75,959 ounces in fiscal 2006 compared to our 40% attributable share of

gold production of 45,424 ounces in fiscal 2005 and 51,982 ounces for fiscal 2004. The increase in fiscal 2006 is mainly due to the
incorporation of Crown into DRDGOLD SA as a wholly owed subsidiary with effect from December 1, 2005.

The following table details our attributable share of the production results from Crown for the past three fiscal years:

Year ended June 30,

2006

2005

1

2004

1

Production

Surface operations

  Ore mined ('000 tons) ....................................................................................................................... 6,795

3,915

4,421

  Recovered grade (oz/ton).................................................................................................................. 0.012

0.012

0.012

  Gold produced (ounces)....................................................................................................................      75,959

45,424

51,982

Results of Operations ($)

Revenues (‘000) ................................................................................................................................

31,310

-

-

Production cost (‘000) ....................................................................................................................... 26,697

-

-

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

2

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

477

-

-

Total cost per ounce of gold ($)

2

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

533

-

-

ERPM

Overview

Until November 30, 2005 we accounted for our 40% interest in ERPM under the equity method. 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 own
85% of ERPM, which is consolidated as a subsidiary from December 1, 2005, through our 85% holding in DRDGOLD SA.

On December 11, 2006, Khumo Gold exercised the option granted by us pursuant to the option agreement concluded between

the parties in October 2005. Khumo Gold acquired from us a further 50,000 ordinary shares in DRDGOLD SA for $0.6 million
(R4.3 million). After exercising the option, Khumo Gold's shareholding in DRDGOLD SA increased by 5% 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 $0.7 million (R5.1 million). After exercising the option, the trust's shareholding in
DRDGOLD SA is 6%. We will finance the transaction, on condition that the terms of the finance are determined by independent
experts to be fair and reasonable to our shareholders. It is proposed that we will subscribe for preference shares in Khumo Gold and
extend a loan to the trustees of the trust.

ERPM consists of an underground section and the Cason Dump surface retreatment operation. The underground mining

operation at ERPM implemented a controlled closure program and was scheduled to close in March 2005.

Following the retrenchment of

806 employees in August 2004 at a cost of $0.6 million (R3.7 million), the mine has achieved a reduction in costs coupled with improved

productivity. As a result, the original planned closure of the underground section was prevented. The Cason Dump surface re-treatment
operation will continue to operate until 2013 under the management of Crown based on the current rate of production of approximately
178,000tpm.

At June 30, 2006, ERPM had 2,202 employees, including a small number of contractors.

1

Represents our 40% attributable share of production for fiscals 2005 and 2004. From December 1, 2005, Crown is a consolidated

subsidiary (previously accounted for as an associate under the equity method).

2

Cash cost per ounce and total cost per ounce are non-US GAAP financial measures 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 production costs see
Item 5A: “Operating Results.”

49

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.

A planned controlled closure of the underground operations at ERPM by the end of fiscal 2004 was prevented due to a

reduction in costs and improved productivity at the mine.

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 effective grade control. Improvements in production, efficient cost controls, a better Rand gold price received and the re-
institution of State assistance with pumping have all contributed to restoring the mine’s underground operations to profitability.

At June 30, 2006, the net book value of ERPM’s mining assets was approximately $15.5 million.

History

1895

Formation of East Rand Proprietary Mines Limited.

1991

The FEV shaft was commissioned.

1999

The company 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 a loss of Hercules Shaft in June 2003 and the
loss of 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 own 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.

50

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 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.

An operational reassessment of the underground operations was undertaken in April 2004. Formal notice under the South

African Labor Relations Act was issued on May 4, 2004, which required a review period of no less than 60 days to assess the operational
performance of the ERPM underground operations to consider options to restore the operations to profitability. A task team comprising
management, union representatives and labor was established to assess the proposals and make a final recommendation.

On July 4, 2004, ERPM management announced that the underground mining operation was not sustainable, even at a higher

Rand-gold price of R2,650 per ounce. As a result, a controlled closure program of the underground section was implemented and was
expected to be completed by March 2005. Following the retrenchment of 806 employees in August 2004 at a cost of $0.6 million
(R3.7 million), the mine achieved a reduction in costs coupled with improved productivity. As a result, the original planned closure of the
underground section was prevented.

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.

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 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.

Exploration and Development

Exploration and development activity had been curtailed at ERPM with the decision to close the underground section at a later

date depending on prevailing circumstances. Looking ahead, it will be necessary to extend the FEV decline from 75 to 78 level to replace
face length. There is also the prospect of extending ERPM’s Ore Reserves into the neighboring Sallies lease area and significantly
increasing the life of the mine’s underground operations. A prospecting right permit has been issued to ERPM covering the Sallies lease
area. The first prospect borehole of a four-year exploration drilling program in this area, now known as ERPM Extension 1, was
completed during fiscal 2006 and preliminary results indicate that the reef is well developed.

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 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 or 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 is currently pumping the Central Basin water out of the
South West Vertical, or SWV, Shaft. The ‘plugging’ program undertaken by ERPM will ensure that ERPM will not be dependant on
pumping this water after December 2006.

51

During fiscal 2006, ERPM has embarked on a program of concurrent rehabilitation to reduce the closure liability and meet

the conceptual closure objectives. Surface holings are being filled, with 24 of the 154 holings remaining. Redundant surface
infrastructure is being demolished and rehabilitated. ERPM is in the process of updating its EMP to include all the requirements to the
MPRD Act. The updated EMP will be submitted to the DME for approval by the end of calendar 2006.

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, 2006, is $5.4 million. A total of $0.7 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.

Life of Mine

Based upon a gold price of approximately R117,055 per kilogram ($582 per ounce), at June 30, 2006, our 85% share of Proven

and Probable Ore Reserves of ERPM was 1.0 million ounces, of which 0.7 million ounces relate to the underground section. The
remaining 0.3 million ounces relate to the Cason Dump surface material which, based on the estimated rate of production, will be
processed over a remaining 7 year period ending in fiscal 2013. Based upon a gold price of approximately R88,960 per kilogram, at
June 30, 2005, our 40% share of Proven and Probable Ore Reserves of ERPM were 0.4 million ounces. The year on year increase is
mostly attributable to the continuation of mining operations which were planned to be suspended in March 2005 and the increase in our
attributable share from 40% to 85%. 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 is five years.

Current Production

Our attributable share of gold production for ERPM was 80,324 ounces in fiscal 2006 compared to our 40% attributable share of gold
production of 44,600 ounces in fiscal 2005 and 44,896 ounces for fiscal 2004. The increase in fiscal 2006 is due to the incorporation of
ERPM into DRDGOLD SA as a wholly owned subsidiary with effect from December 1, 2005.

The following table details our attributable share of the production results from ERPM for the past three fiscal years:

Year ended June 30,

2006

2005

1

2004

1

Production

Surface Operations

   Ore mined ('000 tons) .......................................................................................................................

1,761

830

96

   Recovered grade (oz/ton)..................................................................................................................

0.012

0.011

0.007

   Gold produced (ounces)....................................................................................................................

20,325

9,208

708

Underground Operations

  Ore mined ('000 tons) .......................................................................................................................

248

160

254

  Recovered grade (oz/ton)..................................................................................................................

0.242

0.221

0.174

  Gold produced (ounces)....................................................................................................................

59,999

35,392

44,188

Total ounces produced........................................................................................................................

80,324

44,600

44,896

Results of Operations ($)

Revenues ('000)................................................................................................................................

33,840

-

-

Production cost ('000) .......................................................................................................................

28,642

-

-

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

2

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

467

-

-

Total cost per ounce of gold ($)

2

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

555

-

-

1

Represents our 40% attributable share of production for fiscals 2005 and 2004. From December 1, 2005, ERPM is a consolidated

subsidiary (previously accounted for using equity method).

2

Cash cost per ounce and total cost per ounce are non-US GAAP financial measures 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 production costs see
Item 5A: “Operating Results.”

52

Papua New Guinea

Porgera

Overview

Through our subsidiary, Emperor, we own a 20% interest in an unincorporated joint venture, the Porgera Joint Venture, which

holds 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 is the owner of a 75% interest.
The remaining 5% interest is 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 are 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.

The net book value of our share of property, plant and equipment, deferred stripping and purchased undeveloped mineral

interests is $63.7 million at June 30, 2006.

As at June 30, 2006, the workforce at Porgera is comprised of 2,389 employees of whom 2,197 (92%) are PNG nationals. In

addition, there are approximately 1,000 contractors of whom 97 are PNG nationals. Of the total workforce of 2,389, 75% are local
residents, while the remainder work on a “fly-in-fly-out” basis.

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.

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 3,650mm per year. The

vegetation is largely rainforest below an elevation of 7,920 feet (2,414 meters).

The Porgera Joint Venture has approval to work the Porgera deposit within the agreed development plan under the terms of

the Porgera Mining Development Contract, or the Porgera Contract, between the Government of PNG and the joint venturers. The
Porgera Contract specifies, amongst other matters, the annual rents that must be paid for the Special Mining Lease, and the various
classes of compensation that are payable to the landowners for the various land uses. The Special Mining Lease, which expires in
2019, encompasses approximately 2,240 hectares including the mine area and the areas in which the project infrastructure is located.
There is no expiration date for the Porgera Contract, but it is tied to the continuation of the Special Mining Lease. Leases for Mining
Purposes have also been awarded by the Government for land use associated with the mining operation such as waste dumps,
campsites, water supply, power generation and an airstrip. The Porgera Joint Venture holds a mining lease for the operation of a
limestone quarry for the supply of lime to the process plant. Permits are held for water use, including run-off from unconsolidated
surfaces, such as the open pit, the underground mine and the waste dumps. These water use permits are renewable on a regular basis
and are subject to a public hearing before approval. The Porgera Joint Venture runs an environmental monitoring program to ensure
compliance with the requirements of these permits.

53

In addition to the 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, which we assert we
have 20% ownership of as joint venture assets. Barrick asserts we do not have a 20% interest in these Exploration Licenses and that
the Exploration Licenses are not joint venture property. On August 9, 2004, we placed a caveat on the title register in order to prevent
changes taking place without notification to us. The dispute between us and Barrick regarding these Exploration Licenses is the
subject of ongoing discussion and the tenements are the subject of ongoing exploration expenditure.

Porgera has on a number of occasions experienced delays in the granting of operating permits and licenses necessary to

conduct its operations. Although there has never been an interruption to operations due to an issue of this nature, if at any time in the
future permits essential to lawful operations are not obtained, or exemptions not granted, there is a risk that Porgera may not be able to
operate for a period of time. Future government actions cannot be predicted, but may impact the operation and regulation of mines
including Porgera.

Porgera is operated subject to the requirements of the PNG Mining Safety Act and Regulations as applied by the Mines

Inspectorate.

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, or the State, 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 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 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 (15%). The additional 15% was taken by
the State 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 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 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 holds the 20% interest in the Porgera Joint Venture.

Geology and Mineralization

Mineralization is structurally controlled and occurs within the Porgera diorite intrusive complex, around the margins of, and

within, the intrusive bodies.

The Porgera ore body is an epithermal style ore body hosted within thermally metamorphosed sediments. The known ore

body extends for up to 3,050 feet (930 meters) along strike. The maximum width across strike is 330 feet (101 meters), but the width
is commonly no more than 65 to 98 feet (20 to 30 meters). The intrusive diorite complex has many individual stocks and dykes. The
rocks are competent however they tend to be brittle, and in the vicinity of the ore body, are extensively veined and brecciated. The
intrusive bodies tend to be concentrated towards the footwall of the deposit.

54

The gold and electrum metal association is the source of the high gold grades found in the deposit. The majority of gold

occurs as submicroscopic gold intimately associated with and disseminated throughout pyrite.

Mining and Processing

The Porgera deposit is currently 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 is now

expected to continue through to late 2008. Currently, 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
2,050 meter level. Stockpiled low grade ore will 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 2006, leading to reliance on low-
grade, long-term stockpile material as the primary feed. This together with damage to access infrastructure caused by heavy rainfall,
power failures and a strike related to a change of management from Placer Dome to Barrick had a negative impact on gold production
during fiscal 2006.

On completion of the open pit operation, the mill will 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.

The most significant capital expenditure during fiscal 2006 related to deferred stripping, and our 20% share amounted to

$12.9 million.

Exploration and Development

Exploration work in calendar 2004 concentrated on upgrading the East Zone to an indicated Mineral Resource for

underground mining exploitation. This zone is an eastward continuation of the North Zone, which is now in production and which
shares the same characteristics. Drilling also was carried out in the later part of 2004 on the Lower Central Zone. Both these zones are
hosted within diorite bodies and surrounding altered sediments and consist of continuous or on echelon quartz roscoelite veins. There
is still further resource potential in these zones, as they are not completely closed off. Drilling will continue to further define these
targets as suitable for development. A small amount of open pit delineation drilling has been carried from underground in order to
upgrade the geological model.

55

Exploration plans for calendar 2005 had a two pronged approach. The majority of the drilling was carried out within or

adjacent to the current mine infrastructure. There are a total of seven known targets where at least some previous drilling has taken
place. This drilling is designed to bring these target ounces to an indicated Mineral Resource status. There are also some targets that
are less well known and more conceptual in nature.

In addition, during fiscal 2005 a project termed Porgera Deep Minex was initiated and continued into fiscal 2006. This

project was part of the mine’s ongoing existing exploration projects however was newly termed Project Deep Minex because this
particular part of the exploration process consists of a multi-disciplinary approach to determine targets and test the volume of ground
below the known Porgera deposits. This approach involves the building of an integrated geological and geophysical model, various
geochemistry techniques, and the use of seismics is to be investigated. Much of this will be the “mining” and integrating of existing
data. Drilling will be carried out with a prime target being the intersection of the Roamane Fault and the North Zone shear in depth.

The Stage 6 program was completed in September 2006 and work continued on modeling the Stage 6 data and preliminary

estimation work was also conducted. The Porgera Deeps drilling program is in progress.

Regionally, drilling planned at Tupagai is awaiting finalization of the drill contract. Landowner clearances for drill pads and

access tracks were obtained during July 2006. Assays from earlier rock chip sampling at Tupagai returned some significant values.
Target areas have now been identified for further assessment. Results of earlier field work at Liawin area have also been encouraging.

Elsewhere, three target areas have been identified and follow-up field work has commenced. The targets identified were

based on coincident geochemical and geophysical anomalies in favorable litho structural positions within the Porgera Transfer Zone.

Life of Mine

The Proven and Probable Ore Reserves of the Porgera Joint Venture at December 31, 2005, are estimated at 8.1 million

ounces of gold with a projected life of 11 years. Our 16% attributable share of estimated Proven and Probable Ore Reserves as at
December 31, 2005, before Ore Reserve depletion, is 1.3 million ounces. Our attributable 16% share of the Proven and Probable Ore
Reserves in the Porgera Joint Venture is based on the Ore Reserve information disclosed by Placer Dome Inc. in its earnings release
for the period ended December 31, 2005, as released on February 20, 2006 in accordance with US GAAP. At December 31, 2005,
Placer Dome held a 75% stake in the Porgera Joint Venture pending being acquired subsequently by Barrick. At June 30, 2006, our
attributable Ore Reserves decreased by 5.4%, or 0.1 million ounces, from fiscal 2005 and Ore Reserves decreased by 6.0%, or 0.1
million ounces, from fiscal 2004, mainly due to the open pit mining depletion. For Porgera, the reserve information was provided by
Barrick and was reviewed by Mr. Richard Johnson (AusIMM).

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.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we have estimated that our attributable

portion of total costs for Porgera, based on information provided by the operator, Barrick, in current monetary terms as at June 30, 2006,
is $7.6 million. This has been included in the provision for environmental rehabilitation, reclamation and closure costs.

56

Current Production

Our 20% interest in the Porgera Joint Venture was acquired with effect from October 14, 2003. Attributable production at

June 30, 2006 amounted to 128,238 ounces at a cash cost and total cost per ounce of $289 and $467, respectively. Barrick, 75% owner of
the mine, had predicted lower production in calendar 2006 due to a shift of operations from Stage 4 to Stage 5 of the open pit, which has
harder ore and lower grades. Performance in fiscal 2006 has been negatively affected, however, by the impact of heavy rains on the
stability of the pit’s West Wall. Work on the West wall cutback as at November 30, 2006 was 72% complete and the joint venture expects
mining of ore from the open pit to begin in calendar 2007.

The following table details the attributable operating and production results from the Porgera Joint Venture for fiscal 2006.

Year ended June 30,

2006

2005

2004

Production

Surface and underground operations (only surface operations in 2002)

Ore mined ('000 tons) ........................................................................................................................

1,209

1,324

1,038

Recovered grade (oz/ton)...................................................................................................................

0.106

0.148

0.142

Gold produced (ounces)..................................................................................................................... 128,238

195,394

147,475

Results of Operations ($)

Revenues ('000)...................................................................................................................................

64,991

82,793

60,445

Production cost ('000) ......................................................................................................................... 37,021

36,210

31,650

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

1

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

289

185

215

Total cost per ounce of gold ($)

1

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

467

273

291

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 acquired all the shares in Dome which we did not already own.

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.

As at June 30, 2006, the mine is a low capacity (18,000 tpm capacity), high-grade (0.39 ounces per ton) operation and

employs 778 people, including 143 contractors.

1

Cash cost per ounce and total cost per ounce are non-US GAAP financial measures 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 production costs see
Item 5A: “Operating Results.”

57

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). For a summary of our exploration licenses see “Exploration Projects” in Item 4D: “Property, Plant
and Equipment.”

All current mining activities are carried out under the terms of Mining Lease 104 (ML104), granted under Section 38 of the

Papua New Guinea Mining Act of 1992 and Mining Regulations 1992. The lease is granted for a term of 20 years expiring on
August 29, 2012, and is renewable for further periods not exceeding 10 years each.

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. As a result, approximately 17% of
the production costs of the mine are spent on transportation and logistics, including the cost of jet fuel. 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 their main river.

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 effectively we held 88.3% of Emperor who in turn
holds the 100% interest in Tolukuma.

Exploration and Development

Exploration within the mining lease, ML104, has recently been expanded with the purchase of two underground diamond

drill rigs, including one with long hole capability, and an additional rig for surface drilling. This brought the number of rigs on site to
five. An air-driven Kempe rig, commissioned in December 2003, is used for short holes underground, currently targeting the down dip
extension of the Tinabar ore body and an LMA90 drill rig, commissioned in January 2004, is used for longer exploration holes,
initially in the Gulbadi south area and the Milaihamba structural target. Another manportable DT600P was purchased to support the
existing manportable DT250P on surface drilling of ML104 and later the Saki, Sere Sere, Taula and Taula North prospects in
Exploration License 580 followed by other regional targets. The LY44 is also currently drilling ML104 targets.

Drilling during fiscal 2005 concentrated mainly within ML104, testing the extensions of known mineralized structures such

as the Zine, 120, Gulbadi, Tolukuma, and Tinabar veins, with the aim of delineating and defining additional mineralized materials for
mill feed. Drilling in fiscal 2005 continued at new structures that have been identified for drill testing including the Loch, Tofun, and
Banana vein structures.

58

During fiscal 2006, we announced the discovery of two zones of high-grade gold mineralization in the Zine structure, a

significant regional structure that is parallel to the main Tolukuma structure. We continued to maintain eleven Exploration Licenses,
or EL, covering 8,183 square kilometers. Seven tenements have been granted namely EL683, 1297, 1379, 1284, 1271, 1352 and 1366;
and four tenements EL580, 894, 1264 and 1327 awaiting renewal.

In fiscal 2006, exploration expenditure of $2.1 million was incurred.

Geology and Mineralization

The Tolukuma deposit is a narrow epithermal low sulphidation gold/silver/quartz/adularia vein system noted for its high-

grade “bonanza” style mineralization. The primary structures extend 4.4 miles (7 kilometers) on strike with economic mineralization
usually occurring in well-defined zones on dip and along strike.

The Tolukuma deposit is comprised of two sub-parallel structures that are connected by a series of linked structures trending

generally from north west to south east. Individual quartz veins average 0.6 feet to 6.6 feet (0.2 meters to 2.0 meters) in width over a
strike length of more than 0.9 mile (1.4 kilometers). Likewise, the Zine and 120 veins located approximately 250 meters to the east,
have similar geological features. These are connected by a series of linked structures tending generally in a south east to north west
direction.

All the current Ore Reserves are located within these veins in five sections that have different geological characteristics.

These zones include from north to south, Tolukuma, Tolimi, Tinabar and Gulbadi. The Gulbadi zone includes the Gulbadi and Gulbadi
X-veins. Clay zones of variable width are located in the intersections on two or more structures. Minor loops off the main veins, minor
splay veins and minor cross veins are excluded from the potential reserves, although they are mined at times. Infill diamond drilling of the
Zine and 120 veins is continuing and an underground diamond drilling program has commenced.

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 currently 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 at
June 30, 2006 is 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).

Several capital projects were conducted over the period from fiscal 2004 to fiscal 2006, including expansion of the mobile plant,

additions to equipment in the plant and acquisition of plant and equipment. Mine development during fiscal 2006 amounted to
$2.8 million and $1.5 million was spent on heavy equipment.

59

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.

Lead, mercury, cyanide and arsenic occur naturally in the ore processed at Tolukuma. Cyanide is associated with the mining process

and is discharged into the riverine system as a result of the inability of Tolukuma to use conventional tailings dams. Prior to discharge, the
cyanide is degraded in a detoxification process and levels are monitored daily.

Through visits with local communities by mine staff members, we have been informed that communities located downstream from

the Tolukuma Mine do not generally use water from the Auga/Angabanga river system for consumption as these communities rely on
water from creeks, tributaries and strategically placed wells, many of which we have provided, and we are not aware of any adverse
health effects on communities associated with the Tolukuma Mine.

Furthermore, we are not aware of any scientific or engineering report that states that the level of mercury discharges from the

Tolukuma Mine into the Auga/Angabanga river system are harmful to human life. In November 2002, Oxfam Community Aid Abroad
released their “Mining Ombudsman Annual Report 2001-2002” which we believe made inaccurate and unsubstantiated references to
mercury output and other findings contained in an internally prepared study on Tolukuma done in 2000. This study was not conclusive on
the mercury output at Tolukuma and the results of this study were not scientifically tested. Nonetheless, as discussed above, we increased
our environmental management systems in response to this study.

Two water quality and geochemical investigations were conducted by an independent consultant in July 2000 and June 2002. These

investigations concluded that there was little difference between mercury concentrations in mining sediment from the Tolukuma Mine
being dumped into the Auga/Angabanga river system and the naturally occurring sediments in the area. Although mercury is detectable in
the mining derived sediments immediately adjacent to the discharge point, these levels are immediately diluted to levels below detectable
limits upon meeting with the Alabule River. This area consists of steep gorges and fast, turbid currents. The result is a high dilution of
mining sediments and, therefore, negligible impact on the lower Angabanga floodplain and oxbow lakes which are located downstream
from the Tolukuma Mine. An additional study took place during June 2003, reinforcing earlier findings. Further water quality and
geochemical monitoring performed by an independent consultant in December 2005 on the Auga/Angabanga river system, reported
findings to be within compliance. The mill tailings analyzed by the Australian Laboratory Services in Brisbane for filtered metals,
ammonia, cyanide, conductivity and total suspended solids are also within compliance criteria.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we have estimated that the total cost

for Tolukuma, in current monetary terms as at June 30, 2006, is $1.5 million. This has been included in the provision for environmental
rehabilitation, reclamation and closure costs on our balance sheet.

60

Life of Mine

Our attributable Proven and Probable Ore Reserves for Tolukuma, as at June 30, 2006, were 0.195 million ounces, determined

assuming a gold price of K1,840 per ounce ($582 per ounce). Based on a gold price of $381 per ounce and an exchange rate of K3.45 =
$1.00, at June 30, 2005, the Proven and Probable Ore Reserves of Tolukuma were 0.22 million ounces. The decrease in Ore Reserves is
primarily due to the reduction in our attributable portion of ounces from 100% to 79% as a result of the purchase and sale agreement with
Emperor.

A Mineral Resource competent person is appointed at each operation to review our Ore Reserves calculations for accuracy. For

Tolukuma, Mr. Richard Johnson (AusIMM) is the appointed Mineral Resource competent person. As at June 30, 2006, Tolukuma has
been assessed with a two year life of mine for its underground operations.

Current Production

Total gold production for fiscal 2006 was 54,790 ounces compared to 76,314 ounces for fiscal 2005. Tolukuma also produced

117,636 ounces of silver in fiscal 2006 compared to 168,314 ounces of silver in fiscal 2005. Gold production was adversely affected by a
lack of available face in the first half of fiscal 2006 and the consequent treatment of low-grade underground stockpiles. Extensive
underground development from the second half of fiscal 2006 began to redress this issue by the end of fiscal 2006. Cash costs increased
to $610 per ounce of gold in fiscal 2006 from $331 per ounce of gold in fiscal 2005, primarily due to lower gold production, the higher
cost of fuel and the logistics involved in keeping the mine supplied with consumables and services. Inclement weather also affected
logistics, in particular helicopter access to the mine. As a consequence, supplies of critical consumables such as diesel were disrupted.
Going forward, a second hydro plant will reduce the level of dependence on diesel fuel as a power source. In fiscal 2006 the total cost per
ounce increased to $767 per ounce from $434 per ounce in fiscal 2005.

The following table details the operating and production results from Tolukuma for the past three fiscal years.

Year ended June 30,

2006

2005

2004

Production

Underground Operations

  Ore mined ('000 tons) ..............................................................................................................................

213

235

218

  Recovered grade (oz/ton).........................................................................................................................

0.26

0.33

0.39

  Gold produced (ounces)...........................................................................................................................

54,790

76,314

85,715

Results of Operations ($)

Revenues ('000)..........................................................................................................................................

29,085

32,446

32,743

Production cost ('000) ................................................................................................................................

33,448

25,278

19,821

Non US GAAP Financial Data

Cash cost per ounce of gold ($)

1

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

610

331

231

Total cost per ounce of gold ($)

1

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

767

434

355

1

Cash cost per ounce and total cost per ounce are non-US GAAP financial measures 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 production costs see
Item 5A: “Operating Results.”

61

Fiji

Vatukoula

Overview

As of July 30, 2004, we owned, through DRD (Isle of Man), 45.33% of Emperor, the owner of the Vatukoula Mine. The mine

located at Vatukoula on the South Pacific island nation of Fiji, has been in operation since 1933 with 6.8 million ounces of gold produced
since operations commenced. The Vatukoula Mine is a multi-shaft underground mine. The Vatukoula Mine is Fiji's second largest private
employer with 1,856 employees at June 30, 2006.

On July 11, 2005, Emperor announced the finalization of a financial and operational restructuring package aimed at returning

Emperor to positive cash flow and creating a sustainable, long-term future for the company and its operations. An A$10.0 million
Convertible Loan Facility was negotiated by the independent directors of Emperor. The financing package also included an agreement
with ANZ Bank, subject to a number of conditions, to a restructuring of Emperor’s debt servicing obligations to assist them with their
restructuring plan. The ANZ Bank also consented to the Convertible Loan Facility and the related security. The Convertible Loan Facility
was approved by the shareholders of Emperor on August 29, 2005 (we did not participate in the voting). In addition, in July 2005 we
entered into an operational support agreement negotiated on behalf of Emperor’s independent directors, pursuant to which we provided
Emperor with management and technical services.

On November 16, 2005, we concluded a sale and purchase agreement with Emperor, who held a 100% stake in the Vatukoula

mine in Fiji. Pursuant to this agreement, on April 6, 2006, Emperor acquired our wholly owned subsidiary, DRD (Isle of Man), which in
turn holds our PNG assets, comprising of the 20% interest in the Porgera Joint Venture, the 100% interest in Tolukuma and all of our
exploration tenements in PNG. We held 88.3% of Emperor and subsequently, our shareholding was diluted to 78.72%, following a
number of share issues in which we did not participate.

In October 2006, we committed to a $10.0 million working capital facility for Emperor. We advanced funds to Emperor

under this facility of $2.0 million on October 5, 2006, $5.0 million on November 6, 2006 and $3.0 million on November 27, 2006. The
loan bears interest at LIBOR plus 3% per annum and is repayable on December 31, 2007.

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 has been placed on a care and
maintenance program.

Property

The Vatukoula mine is situated 60km on the north east of the city of Nadi, off the coast of the island of Viti Levu, the main

island of Fiji. Gold mineralization is associated with a volcanic caldera, and occurs in both flat-lying and steeply-dipping structures,
typically less than a meter in width, principally on the western fringe of the caldera. The mine can be accessed via the highway from
Nadi to the Vatukoula Mine. Mining is conducted underground from four main shafts exploiting the ore bodies in the southwest
portion of the volcanic margin to the Tavua Caldera, a large shield volcano about 9 miles (15 kilometers) in diameter and the recently
accessed R1 ore bodies situated within the caldera. The main mining licenses include Special Mining Lease 54, 55 and 56.

History

1930

Discovery of alluvial gold in the Nasivi river in Vatukoula.

1933

Commencement of mining activities at the Vatukoula mine.

1950s

Emperor secured ownership of the Vatukoula mining field.

1992

Western Mining Corporation relinquished its joint venture with respect to the Emperor Gold Mine.

2003

We acquired a 19.81% interest in Emperor.

2004

In July 2004, we increased our shareholding in Emperor to 45.33% through a conditional takeover offer. Emperor appointed
our Executive Chairman, Mr. M.M. Wellesley-Wood as Managing Director and our Divisional Director: Australasia,
Mr. R Johnson as Non-Executive Director, both with effect from August 3, 2004.
In November 2004, Emperor’s rights offer closed and we subscribed for our entitlement under the rights offer.

2005

In August 2005, the shareholders approved a convertible loan facility to assist with Emperor’s restructuring plan. An
operational and support agreement was also signed pursuant to which we will provide Emperor with management and
technical services.

2006

We concluded a sale and purchase agreement with Emperor, where effectively we held 88.3% of Emperor.
On December 5, 2006, after an extensive three-month review of Vatukoula, the mine ceased production. Pending completion
of a strategic review to optimize the value of Vatukoula and other Fijian land holdings, the mine has been placed on a care
and maintenance program.

62

Geology and Mineralization

Vatukoula is a low-sulphidation epithermal gold deposit associated with alkaline type igneous rocks in a volcanic setting. This

volcanic setting and rock type is typical of several major gold mines in the southwest Pacific region, such as Porgera. The ore deposits lie
along the margin of Tavua volcanic caldera and consist of various types of quartz-adularia-telluride-auriferous-pyrite fillings deposited in
fractured, faulted and shattered volcanic rocks.

The majority of the Vatukoula Mine's ore bodies are situated in the southwest portion of the volcanic margin of the Tavua

volcanic caldera, a large shield volcano about 9 miles (15 kilometers) in diameter. The R1 ore bodies are, however, situated within the
caldera.

Volcanism commenced about 5 million years ago and ceased about 3.5 million years ago. The ore bodies were the last major

geological event and mineralized fractures persist throughout the very late stage sediments that filled in the central part of the caldera. The
gold is found as native gold, auriferous pyrite, and as gold tellurides.

Mining and Processing

Most of the known ore bodies at Vatukoula are relatively narrow, flat dipping structures previously mined by room and pillar

methods. They are now mined predominantly by longwall stoping, although throughout the mine a number of other mining methods, such
as sub-level stoping and caving, cut-and-fill, shrinkage stoping and up-dip mining, are also practiced. The remnants of 50 years of room
and pillar mining are also currently being successfully exploited.

Until April 2006, production at the Vatukoula mine came from four mining sections that are named according to the shaft or

drive access: Smith Shaft, Philip Shaft, R1-Cayzer Shaft and the Emperor Decline Shaft. In April 2006, production from all sections was
shutdown following which Philip Shaft production was gradually restarted in June 2006.

The Emperor plant, built in 1997, consists of two parallel grinding mills, namely a Smith grinding mill and a larger

Morgardshammer mill. There are also two flotation circuits, one for slimes washed from the ore, and a conventional sulphide circuit for
the grinding circuit product. Both circuits are combined in a thickener and roasted before passing through a CIP circuit. Loaded carbon is
stripped and the gold-rich solution is combined with the calcine rich solution for zinc precipitation and to be able to smelt into bars.

Implementation of the mine’s new ACDTP during fiscal 2006, involved a temporary shutdown of the mine on April 20, 2006

and a gradual start-up early in June 2006. The ACDTP has been designed to introduce flexibility to production areas, improve
infrastructure and increase the productivity of the workforce. The plan includes development of higher grade areas at Philip Shaft and
upgrading of associated shaft infrastructure. In addition, the entire workforce will undergo comprehensive assessment, re-skilling and
retraining. On December 5, 2006, the mine was placed on a care and maintenance program.

Exploration and Development

Emperor holds three mining tenements. Special Mining Lease:

•

S54 – covers an area of approximately 610 square meters

and expires on March 21, 2025;

•

S55 – covers an area of approximately 400 square meters

and expires on March 21, 2025; and

•

S56 – covers an area of approximately 250 square meters

and expires on March 21, 2025.

Additionally, Emperor holds 100% of Special Prospecting Licenses, or SPLs, for tenements 1201, 1283, 1296, 1344, 1360, 1411

and 1435.

Environmental and Closure Aspects

Emperor is subject to Fiji environmental regulations in respect of its exploration and mining activities. The policy of Emperor’s

board of directors is to work with Government environmental protection agencies to ensure compliance with all relevant regulations. In
addition, Emperor undertakes environmental projects to ensure compliance with all relevant regulations.

Emperor has an internal reporting system with regard to environmental activities, and operational managers are required to

provide monthly updates on performance to the Managing Director who brings, and allows, operational managers to bring, major issues
to the attention of the full board of directors.

63

During fiscal 2006, environmental monitoring continued with full cyanide compliance at the Upper Lololevu, Golf, Nasivi

rivers, the Dakavono dam discharge and the Dakavono creek. We are not aware of any environmental issues in Emperor that could have a
material adverse impact on the Group’s business.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we have estimated that the total cost

for Vatukoula, in current monetary terms as at June 30, 2006, is $1.0 million. This has been included in the provision for environmental
rehabilitation, reclamation and closure costs on our balance sheet.

Life of Mine

Based on a gold price of approximately $582 per ounce (A$820 per ounce) at an exchange rate of A$1.41 = $1 at June 30, 2006,

our attributable share of the Proven and Probable Ore Reserves of Emperor was 0.7 million ounces. Vatukoula’s life-of-mine plan at
June 30, 2006 reflected 8 years, however on December 5, 2006, the mine was placed on a care and maintenance program. A Mineral
Resource competent person is appointed at each operation to review our Ore Reserves calculations for accuracy. For Emperor, Mr. Greg
MacDonald (AusIMM) is the appointed Mineral Resource competent person.

Current Production

Vatukoula’s production or related revenue and costs are consolidated into our results from April 6, 2006. Attributable gold

production in fiscal 2006 was 28,397 ounces compared with 45,426 ounces in fiscal 2005. The decrease in production resulted primarily
from the temporary shut down of the mine to implement the ACDTP. On December 5, 2006, the mine was placed on a care and
maintenance program, which will further impact production for fiscal 2007.

The following table details our attributable share of the production results from Vatukoula for fiscal 2006:

Period ended June 30

2006

2005

1

Production

Underground operations

Ore mined ('000 tons) ..........................................................................................................................

177

234

Recovered grade (oz/ton).....................................................................................................................

0.16

0.19

Gold produced (ounces).......................................................................................................................

28,397

45,426

Results of Operations ($)

Revenues ('000)......................................................................................................................................

2,440

-

Production cost ('000) ............................................................................................................................

7,453

-

Non US GAAP Financial Data

Cash cost per ounce of gold ($)

2

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

3,620

-

Total cost per ounce of gold ($)

2

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

4,188

-

1

We increased our ownership in Emperor to 45.33% with effect from July 30, 2004. Emperor is now consolidated from April 6, 2006

(previously accounted for using the equity method). As a result we have not disclosed the attributable portion of Vatukoula’s
production results for fiscal 2004.

2

Cash cost per ounce and total cost per ounce are non-US GAAP financial measures 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 production costs see
Item 5A: “Operating Results.”

64

Exploration Projects

Our exploration and project development activities during fiscal 2006 continued to enhance our growth strategy by growing

Tolukuma (through both brownfields and greenfields exploration). Total exploration and project expenditure for fiscal 2006 was
$2.1 million for Tolukuma. During fiscal 2006, we lodged an application for a prospecting right in respect of the Argonaut area in
South Africa. ERPM also lodged an application for a prospecting right over the Sallies area in South Africa. Both these applications
were approved and prospecting permits issued by the DME.

South Africa

Argonaut Project

The Argonaut Project represents the southern down-dip extension of the Central Rand Goldfield. The strike length of the area

covered by the mineral rights covers approximately 19 miles (30 kilometers) from Durban Deep in the west to ERPM in the east with the
possible exploitation of part of the potential mineralized material striking 3 miles (5 kilometers) east/west from City Deep Mine to
Robinson Deep Mine and extending from 9,900 feet to 13,200 feet (3,018 meters to 4,023 meters) below surface. Most of the main
exploration target area incorporated by our 42 square kilometers of mineral rights above the 5,000 meter depth contour of the Main
Reef Leader is covered by urban residential development. The mining activity may, as a result, give rise to an increase in seismicity and
associated environmental pollution in the immediate proximity of the mine. If operated, this would be the first mine in the world to
operate at such depths and the seismicity associated with the mining activity and the impact on the health and safety of the mine
employees working in the underground section are unknown at this stage.

In utilizing a comprehensive computerized database of historical underground sample and borehole core assay values of the

Main Reef and Main Reef Leader, sedimentological and structural interpretations of these major gold-bearing ore bodies across the
former Central Rand have been undertaken with the objective of defining sedimentological facies trends and delineating geozones for
statistical and geostatistical estimation purposes and predictive analysis. A log-linear extrapolation technique was applied to the trend
directions exhibited within the data for each geodomain, enabling the calculation of the likely distances over which the gold
accumulation decreases within the respective geodomains down the palaeoslope. The end product is a grade block model for the Main
Reef Leader showing the rapid downdip decrease in the gold accumulation in all of the defined geodomains.

Renewed focus had been placed on progressing the Argonaut Project by reviewing the geological modeling in the project

target area and valuation model. The results were a substantial downgrading of the estimated mineralized material from that previously
reported. Due to unreliable data, no estimate of mineralized material was deduced for the Main Reef. Future work will include the
drilling of three additional boreholes to test the model and extrapolations and estimates, as well as upgrade and increase the
mineralized material estimate within our mineral rights area.

During fiscal 2004, progress on advancing the Argonaut Project towards a bankable feasibility study was hampered by the

low Rand gold price and the enactment of the MPRD Act which delayed the issuing of a prospecting permit by the DME. Under the
MPRD Act, the prospecting permit is classified as a pending application and, as a result, only geological modeling and resource
estimation took place.

During fiscal 2005, the Argonaut mineral rights reverted to the South African Government. We lodged an application for a

prospecting right covering an area of 969 hectares in respect of the Argonaut area, which was issued by the DME on February 6, 2006.
The Argonaut Project still represents a promising, yet challenging deep-level mining development opportunity which is dependent on
significant increases in the Rand gold price before becoming viable.

At June 30, 2006, no Ore Reserves have been included in the Proven and Probable Ore Reserve statement. The lead time to

mining any reserves is estimated to be in excess of 10 years. In order to support drilling, an application for an extension to the current
prospecting right by an additional 4,002 hectares has been submitted to the DME. On approval, a Mineral Resource for the revised
area will be declared.

65

ERPM Extension

On January 14, 2006, DRDGOLD SA obtained a four-year prospecting right covering an area of 1,252 hectares of the

adjacent Sallies Mine, referred to as ERPM Extension 1. The rationale behind the application is to pursue the high-grade Composite
Reef payshoot currently being exploited at ERPM through the existing mine boundary.

The regional geology of the area indicates that there will be a strike change owing to faulting associated with an east-west

trending sinistral tear fault. In order to confirm the anticipated change in the geological structure and hence payshoot orientation, it is
envisaged that prospecting will take place through the development situated 50 meters in the footwall. Owing to the high induced
stress experienced at depth, it will be necessary to protect the excavation by means of concurrent over-stoping on the reef plane.
Although this is the safest option, permission must first be sought from the DME.

The development will be supplemented by 1,340 meters of exploration diamond drilling, conducted from exploration cross-

cut drilling platforms. As a consequence of Measured and Indicated Resources being defined by grade extrapolation, an application to
convert the prospecting right to a mining right will be submitted in fiscal 2007. On approval, the Measured and Indicated Resource
will be upgraded to Ore Reserves. An application to extend ERPM’s existing prospecting right eastwards into the Rooikraal/Withok
area, incorporating the southern sections of the old Van Dyk mining lease area and a small portion of the Sallies Mine has been
submitted to the DME. The additional area, referred to as ERPM Extension 2, totals 5,500 hectares, with a potential exploration target
of some 7.0 million ounces to 11.0 million ounces of gold and could result in a deep level mine with a life in excess of 15 years.

Papua New Guinea

Tolukuma

Tolukuma maintains eleven Exploration Licenses, or ELs, with seven being granted and four tenements awaiting renewal, as

well as one new EL application and a Mining Lease 104, or ML104. The ML104 covers an area of 7.68 square kilometers and has
extensive exploration tenements in the vicinity of the mine covering approximately 9,937 square kilometers and within 40 minutes
flying radius of the mine site. Tolukuma is being explored using geophysical surveys, interpretation of satellite images, mapping and
sampling of streams. This is followed up by detailed mapping, trenching and drilling of prospective target areas.

Exploration within the mining lease was expanded with the purchase of two underground diamond drill rigs, including one

with long hole capability, and an additional rig for surface drilling. This brought the number of rigs on site to five in fiscal 2004. No
new drills were added during fiscals 2005 and 2006. The short-term focus will continue to be on increasing the resource base at and
around Tolukuma.

Mine lease exploration during fiscal 2005 was focused on finding resources for mill feed. Much of this work involved

diamond drilling concentrated mostly within ML104. A total of 68 holes have been drilled for a total of 23,487 meters. Some regional
exploration was also carried out in a few of the outer ELs.

The short-term exploration focus will continue to be on increasing the resource base at and around Tolukuma. In fiscal 2006,

exploration via an underground exploration drive extending from current operations has discovered two zones of high grade gold
mineralization in the Zine Structure, a significant regional structure that is parallel to the main Tolukuma Structure and approximately
350 meters to the east.

Based on the model that structures at Tolukuma host bonanza grade gold mineralization, underground exploration has

commenced along the Zine Structure. Significant mineralization has been intersected in the vicinity of a cross structure called the
Tinabar Structure. Intersecting structures often form dilation zones where gold can precipitate.

Most recent exploration activities have focused on the drilling of Zine, with minor work being completed on the Banana

West-Wossa Ridge and Fundoot areas. Encouraging results have continued to be returned on the Zine Structure, whilst a recently
discovered vein set in the Fundoot area has returned encouraging results from trenching across this structure.

66

Exploration development and underground diamond drilling at Tolukuma continued to intersect high grade gold

mineralization on the Zine Structure, as well as in a newly discovered splay off the Zine Structure. The Zine Structure is now being
developed in two drives on the 1,525 meter RL and 1,495 meter RL levels respectively. To date more than 140 meters of strike length
of the Zine Structure has been sampled as mineralized on 1,525 meter RL level and 30 meters on 1,495 RL meter level. An
exploration drive along the new Zine Splay structure has sampled 97 meters of mineralized strike length. This discovery of the
mineralized splay structure off the main Zine Structure is considered very significant as it is the first high grade mineralized vein to be
found extending eastwards from the known vein array that has been mined at Tolukuma. It indicates the potential for an entirely new
mineralized corridor to the east, as well as a new internal target area along the potential north-west extension.

As part of understanding the controls of mineralization at Tolukuma, a program of ridge and spur sampling and creek

traversing was completed between the Gulbadi and Kunda prospects, to define surface anomalism that would be associated with the
continuation of these known structures. This data will be used to define the location of the multiple vein corridors in the area and
generate further targets for trenching and drilling. Several significant geochemical anomalies found will be followed up by trenching
and drilling.

Elsewhere on the mining lease in the Fundoot/Degot area, visible gold has been returned from a thin 40 centimeter wide vein

parallel to the Fundoot Structure. Rock chip samples of this vein have returned encouraging values of up to 404 g/t, most likely as
result of supergene enrichment. This area is currently being mapped and trenched and will be targeted with drilling in the near future.

Recent exploration activities included commencement of field work in EL 1284 and EL 1297, and completion of a major

technical exploration review of all eleven tenements. The major technical review of all exploration tenements which began in July
2005 has neared completion. Much of the “modern” exploration from the past (1960s onward), has been sourced, reviewed and
synthesized and has greatly assisted in defining individual prospects, their potential and the broader regional opportunity. Together
with recently acquired Landsat 7 thematic images and an Aster (15m) digital terrain model, a comprehensive base now exists for
future exploration planning on the existing tenements and the immediate regions.

The tenements contain mineralization and anomalies at all scales from individual porphyry stocks (silver-gold) to the

Tolukuma epithermal vein (gold) system. These evaluations have highlighted and ranked in excess of 30 separate prospects with
several at an advanced stage requiring major drilling and exploration. This exploration review establishes the basis for the aggressive
$11.0 million (A$15 million) exploration program.

In March 2006, work commenced in the Belavista prospect area consisting of ridge and spur soil sampling, trenching and

creek mapping as a follow up of the discovery of intrusive (diorite) float with encouraging gold values from an inferred porphyry
source. The most significant exposure to date is a vegetation anomaly (similar to the Tolukuma vegetation anomaly) on a prominent
hill. Trenching and detailed sampling of this wider area has been conducted and interpretation of the results is in progress.

In fiscal 2006, work commenced on ridge and spur soil sampling, creek mapping and trenching at Ioma, also investigating a

porphyry or intrusion related anomaly. Prospecting along extensive areas of the Oi and Milton Creeks encountered pervasive alluvial
gold throughout and in perched alluvial banks but failed to realize significant zones of hydrothermal alteration to indicate a major
primary mineralization source. Future work includes completion of soil lines and reconnaissance sampling of the Gira Circular
Structure as well as the Green Creek prospect in EL 1366 to the south and the Baranuma Prospect area in EL 1327 to the northwest of
Ioma.

Exploration tenements remain in good standing and our mine lease ML104, expires on August 29, 2012. Below is a summary of

exploration licenses:

EL No

No of Sub blocks

Area under EL (sq km)

Status

Expiry date

580

68

230

current

April 4, 2007

683

30

102

current

April 3, 2007

894

75

254

current

April 3, 2007

1264

75

254

current

April 29, 2007

1271

564

1,909

current

January 4, 2007

1284

58

196

under renewal

April 18, 2006

1297

75

254

under renewal

August 30, 2006

1327

146

494

current

June 23, 2007

1352

275

931

under renewal

October 18, 2006

1366

403

1,364

current

January 4, 2007

1379

648

2,194

current

May 3, 2007

Totals

2,417

8,183

67

Closed Operations

North West Operations

Overview

We owned 100% of the North West Operations through our wholly owned subsidiary, Buffelsfontein Gold Mines Limited,

which in turn owns 100% of Hartebeestfontein Gold Mining Company Limited and Duff Scott Hospital (Pty) Limited. The consolidated
mining operations of the North West Operations consisted of Buffels and Harties, which lie adjacent to each other within the Klerksdorp
Goldfield on the northwestern rim of the Witwatersrand Basin.

Since its inception in 1949, Buffelsfontein Gold Mines Limited has produced over 32 million ounces of gold, with 20,100 tons

of uranium as a by-product.

Mining activity at Harties, including exploration, development and production dates back to 1949 with gold production from the

area totaling over 38 million ounces, with uranium oxide, sulfuric acid, pyrite and silver being recovered as by-products.

On July 21, 2003, we entered into a 60-day review period on our North West Operations designed to restore the operations to

profitability. An agreement was reached with all labor organizations and the process was completed on September 21, 2003, with
approximately 3,000 employees retrenched and the placing of No. 6 Shaft of Harties on a “care and maintenance” program, effectively
suspending the use of the asset. On March 16, 2004, we reopened the No. 6 Shaft at Harties to mine high grade areas on a selective basis.
We recalled approximately 800 employees previously retrenched from the North West Operations to man this shaft. On
February 18, 2004, we announced the closure of the No. 11 Shaft at Buffels after the revised work practices implemented based on the
operational review proved to be unsustainable. As a result, approximately 1,000 employees were retrenched. The total cost of the
July 21, 2003 and March 16, 2004 retrenchments was $7.1 million.

With the continuing strength of the Rand and the decline in the Rand gold price, we entered into a 60-day review period at

Buffels at our North West Operations on June 26, 2004, in order to restore profitability. An agreement was reached with all the relevant
parties early in August 2004 to close the No. 9 Shaft, but to keep the No. 10 and 12 Shafts in operation, on the condition that certain
defined sustainability thresholds are met. This agreement resulted in the retrenchment of 120 employees at this mining operation during
fiscal 2005, at a cost of R 3.7 million ($0.6 million). At October 31, 2004, approximately 600 employees were employed at No. 10 and 12
Shafts.

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. 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.
On March 22, 2005, application was made to the High Court of South Africa for the provisional liquidation of Buffelsfontein Gold Mines
Limited, which order was granted on the same day. For further details, see the “Legal Proceedings” section of Item 4D: “Property Plant
and Equipment.”

On October 6, 2005, we concluded an agreement with Simmer and Jack Limited, or S&J, for the sale of our shareholdings in

Buffelsfontein subject to certain conditions. These include indemnifying us against any liabilities or obligations that could arise relating to
environmental rehabilitation and the management and pumping of underground water. The proposed scheme of arrangement was
conditional upon the following:

•

Department of Water Affairs and Forestry, or DWAF, agreeing to substitute us with S&J to the extent that DWAF envisaged
imposing further responsibility on us;

•

the acceptance by the High Court of South Africa and the majority of Buffelsfontein’s creditors of a scheme arrangement
proposed by S&J; and

•

approval by the Competition Commission of South Africa.

On October 21, 2005, the scheme of arrangement for the acquisition of Buffelsfontein proposed by S&J and accepted by the

majority of Buffelsfontein creditors, including us, was approved and sanctioned by the High Court of South Africa. Buffelsfontein applied
to the High Court for the lifting of its provisional liquidation which was granted on November 1, 2005.

68

Property

The North West Operations were located in the Klerksdorp Goldfield of the Witwatersrand Basin approximately 100 miles (161

kilometers) southwest of Johannesburg near the towns of Stilfontein and Klerksdorp, North West Province, and are reached via the R12
Johannesburg-Potchefstroom-Kimberley 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 mines’ infrastructure included the shaft complexes, metallurgical plants, engineering workshops and its associated tailings

dams. Buffels had mining title to 17,575 acres (7,113 hectares) and freehold title to 4,893 acres (1,980 hectares). Harties had mining title
to 15,560 acres (6,297 hectares) and freehold title to 375 acres (152 hectares), all held in the name of Buffels. Buffels consisted of one
mining license, ML4/2001 in respect of statutory mining rights, and one prospecting permit, RP54/2002 in respect of statutory mining
rights and mineral rights held by Buffels.

Accommodation for staff was situated on the property as well as in the neighboring towns of Stilfontein and Klerksdorp. In

addition to mining its lease area, Buffelsfontein operated and mined the adjoining Harties mineral rights areas and another area pursuant
to royalty-based tribute agreements with Lucas Block Minerals Limited, a South African company, and Harties.

The average mining depth at Harties was 5,322 feet (1,622 meters), 961 feet (293 meters) below mean sea level and at Buffels

was 6,099 feet (1,859 meters), 1,790 feet (546 meters) below mean sea level.

History

1949

Hartebeestfontein Gold Mining Company Limited, or Hartebeestfontein, was incorporated as a public company in South
Africa on June 20, 1949. The company is dormant and no longer trades.

1995

Buffelsfontein Gold Mines Limited was incorporated and registered as a public company in South Africa on September 20,
1995, under the name Camelian Investments (Pty) Limited. Camelian Investments changed its name to Buffelsfontein Gold
Mines Limited on December 29, 1995. As of December 31, 1995, Buffels acquired the assets and liabilities of the
Buffelsfontein mine division of Buffelsfontein Gold Mines Company Limited previously managed by Gencor Limited, a
South African mining company.

1997

We acquired Buffels on September 15, 1997.

1999

On August 16, 1999, Buffels acquired both the Harties business assets and Hartebeestfontein from Avgold Limited.

2003

On July 21, 2003, we entered into a 60-day review period of our North West Operations. The process was completed on
September 21, 2003, with approximately 3,000 employees retrenched at a cost of $6.5 million and the placing of certain
infrastructure (No. 6 Shaft at Harties) on a “care and maintenance” program.

2004

In March 2004, the No. 6 Shaft at Harties was reopened to mine high grade areas on a selective basis. We recruited 800 staff
previously retrenched to man this shaft.
In April 2004, the No. 11 Shaft at Buffels was closed as the shaft reached the end of its economic life. Approximately 1,000
employees were retrenched at a cost of $0.6 million.
In September 2004, the No. 9 Shaft at Buffels was closed as the shaft reached the end of its economic life.

2005

On March 9, 2005, the North West Operations suffered the effects of an earthquake of 5.3 on the Richter scale.
On March 16, 2005, further seismic activity in the area occurred and we closed the No. 2 Shaft because of concerns for the
employees’ safety.
On March 22, 2005, an application was made to the High Court of South Africa for the provisional liquidation of
Buffelsfontein Gold Mines Limited, which order was granted on the same day.
On October 6, 2005, we concluded an agreement with Simmer and Jack Limited, or S&J for the sale of its shareholding in
Buffelsfontein Gold Mines Limited subject to certain conditions.
On October 21, 2005, the scheme of arrangement for the acquisition of Buffelsfontein Gold Mines Limited proposed by S&J
and accepted by the majority of Buffelsfontein creditors, including us, was approved and sanctioned by the High Court of
South Africa.
Buffelsfontein applied to the High Court for the lifting of its provisional liquidation which was granted on November 1, 2005.

2006

On October 21, 2005, the scheme of arrangement for the acquisition of Buffelsfontein proposed by S&J and accepted by the
majority of Buffelsfontein creditors, including us, was approved and sanctioned by the High Court of South Africa.
Buffelsfontein applied to the High Court for the lifting of its provisional liquidation which was granted on November 1, 2005.

69

Geology and Mineralization

Buffels and Harties, were predominantly underground operating mines located within a geographical region known as the

Witwatersrand Basin, that exploit gold bearing reefs consisting of Vaal Reef ore and surface sources from previously discarded low-grade
rock dumps. The Vaal Reef is an oligomictic, quartz-pebble conglomerate no more than 20 inches (50 centimeters) thick. Gold is
present throughout the reef horizon, but is concentrated on the bottom contact, where carbon commonly forms as a thin seam.

Buffels exploited the Vaal Reef, occurring within the Central Rand Group of the Witwatersrand Supergroup, at the base of

the Strathmore formation. The bulk of Buffels Ore Reserves had been mined-out but the infrastructure is being used to access remnant
reserves and blocks originally bypassed because of structural complexity. Access from the surface to the underground workings of the
mine was through vertical and underground incline shafts. Mining of the reef took place in stope panels. Holes were drilled into the solid
rock and were charged with explosives and blasted. The loosened rock was removed from the stope panels and was conveyed to the shaft,
tipped into the ore-pass systems, hoisted to the surface and conveyed to the metallurgical plant for gold extraction.

Similar to Buffels, Harties exploited the Vaal Reef within the Central Rand Group of the Witwatersrand Supergroup. Gold

production at Harties started in 1955 on the Vaal Reef. By the late 1990s the mine had reached a position where its life was dependent on
the mining of shaft pillars and scattered remnants. Harties has been converted from a high-grade mine with a short life to a medium-grade
mine with a longer life. This has been achieved in three stages, firstly, by the conversion of the previous owners' mine plan and operating
method, secondly, by dropping the pay limits and putting in place a medium-term operational plan including the opening up of old mining
areas for remnant mining, and thirdly, developing a sustainable life of mine plan that will be supported by areas not included in the
previous owners' mining plan due to high pay limits.

Mining and Processing

Metallurgical processing facilities at the North West Operations included two operating plants. All the underground ore was

processed by the Buffels or South Plant. All the surface material was processed in the North Plant previously known as the Low Grade
Gold Plant, or LGGP, with limited underground material. These plants had a combined operating capacity of 260,000tpm.

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 the
North West Operations is provided from the Kardell and Hermies substation located between Stilfontein and Orkney in the Buffels area.
Electricity is supplied directly from the national power grid to these substations at 88,000 volts. Further 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 852 gigawatt hours, or GWHr
and the maximum demand is about 92 megawatts.

Environmental and Closure Aspects

Dust pollution was addressed through an active vegetation program and selective ridge plowing in areas marked for

rehabilitation. The vegetation program for the tailings dams was preceded by a detailed scientific and site-specific evaluation of the
tailings complex. Based on the results of geo-chemical analyses performed, the tailings medium was prepared for vegetation by the
addition of lime to neutralize the natural acidic conditions and fertilizer. Vegetation was then established and care was taken to select
species endemic to the area. A variety of species selected were then planted to ensure species diversity using either the leaching
(irrigation) or dry land method. Regular monitoring was conducted. To address dust pollution in unvegetated areas, in the short-term, the
open surface areas on top of the tailings dam were ridge ploughed mechanically. This method significantly reduced dust re-suspension.
As an additional measure in inaccessible areas, environmentally friendly chemical and organic dust suppressants were employed, where
necessary.

With the sale of Buffelsfontein to S&J, any liabilities or obligations in connection with the environmental rehabilitation of

Buffelsfontein, as well as the management and pumping of underground water are the responsibility of S&J. S&J will have the benefit,
however, of drawing down against the rehabilitation trust fund which was transferred to the DME upon the provisional liquidation of
Buffelsfontein.

70

Prior Years’ Production

The following table details the operating and production results from the North West Operations for fiscal 2005 and fiscal 2004

noting that the fiscal 2005 results are represented up until March 22, 2005, the date that Buffelsfontein was placed into provisional
liquidation:

Year ended June 30,

2005

1

2004

Production

Surface Operations

Ore mined ('000 tons)..................................................................................................................................

976

1,647

Recovered grade (oz/ton)............................................................................................................................

0.028

0.026

Gold produced (ounces)..............................................................................................................................

27,328

43,180

Underground Operations

Ore mined ('000 tons)..................................................................................................................................

1,088

1,834

Recovered grade (oz/ton)............................................................................................................................

0.159

0.163

Gold produced (ounces)..............................................................................................................................

172,522

298,681

Total ounces produced ................................................................................................................................

199,850

341,861

Results of Operations ($)

Revenues ('000).............................................................................................................................................

81,538

130,036

Production cost ('000) ...................................................................................................................................

100,695

134,465

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

2

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

504

393

Total cost per ounce of gold ($)

2

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

630

441

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 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 ($0.2 million), was granted an option to acquire Durban Deep’s mine village for
R15.0 million ($2.2 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 have since repudiated our agreement with M5 and have notified Rand Leases Properties Limited that we do not
intend offering the property to them. Both parties have indicated to us their intentions to institute legal proceedings for the sale and
transfer of the property. To date we have received no service of legal process related to this matter

.

1

These operating and production results for the Buffels and Harties sections are for the period ending March 22, 2005, which is the

date that Buffelsfontein Gold Mine Limited was placed under provisional liquidation.

2

Cash cost per ounce and total cost per ounce are non-US GAAP financial measures 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 production costs see
Item 5A: “Operating Results.”

71

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 2006, 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, 2006, is $7.0 million. This has been included in the provision for
environmental rehabilitation, restoration and closure costs on the balance sheet. A total of $2.1 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 held 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.

72

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 is 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 owns 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 $1.1 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.

73

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 the 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, 2006, is $1.6 million. This has been included in the provision for
environmental rehabilitation, restoration and closure costs on the balance sheet. A total of $1.8 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

Securities class action

On June 13, 2005, a securities class action was filed in the United States District Court for the Southern District of New York

against us and two of our officers. Since then, four nearly identical securities class action complaints have been filed against us and the
same officers. The cases have been consolidated and a consolidated amended complaint has been filed. To date, neither us, nor the
individual defendants have been formally served with any complaint regarding these matters.

The actions are allegedly filed on behalf of purchasers of our shares during two purported class periods spanning from

October 23, 2003 to February 25, 2005. The complaints allege generally that we and the individual defendants made false and misleading
public statements regarding, among other things:

•

the restructuring of our North West Operations in South Africa;

•

our ability to reduce the negative impact of the increasing value of the South African Rand; and

•

the strength of our balance sheet.

Based on our review of the complaints, we believe the lawsuits are without merit and intend to vigorously defend ourselves and

our officers named in the complaints. Our attorneys have filed an application to dismiss the plaintiffs’ case. We are currently awaiting
direction from court on a date to present argument on the application, if the judge decides to hear oral argument, or for a ruling on the
application, should he decide not to hear argument.

Invalid Issuance of Ordinary Shares in Connection with the Rawas Acquisition

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 of the other
ordinary shares resulting in their identity being lost. This meant that 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.

74

We have not instituted 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, DRDGOLD Limited, Australasia (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. The following claims are being pursued:

•

R69.6 million ($11.2 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 ($1.2 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 ($10,827) being the costs of issuing our shares;

•

R77.0 million ($12.3 million) being profits made by third parties who were issued our shares at the time; and

•

R4.7 million (0.8 million) being costs incurred to validate the shares invalidly issued.

Pleadings in these matters have closed. Attempts at settling this case with JCI have failed. We are currently awaiting the

allocation of a trial date which has not yet been set by the High Court of South Africa.

The Supreme Court in Western Australia has ordered the dispute to be submitted to mediation before a mediation registrar.

Liquidation of Buffelsfontein

On March 22, 2005, Buffelsfontein (which owns the North West Operations) was placed under provisional liquidation after an

earthquake damaged its No. 5 Shaft. Buffelsfontein had up until the date of provisional liquidation, maintained the underground water
levels in the area by pumping water from underground to surface at three of its own shafts, as well as the Margaret Shaft of the
neighboring Stilfontein Gold Mines Limited, or Stilfontein. The latter arrangement occurred in terms of an agreement entered into in 1992
between Stilfontein and Hartebeestfontein Gold Mines Limited, or Hartebeestfontein. Hartebeestfontein became a wholly-owned
subsidiary of Buffelsfontein when Buffelsfontein subsequently acquired Hartebeestfontein.

In April 2005, AngloGold Ashanti Limited, or AngloGold Ashanti, brought proceedings before the High Court of South Africa

for an order to compel us to continue with the pumping operations after it was announced that Buffelsfontein had been placed into
provisional liquidation. Relief was also sought against the relevant government departments to either assume responsibility for, or
contribute to the pumping of underground water. These proceedings were postponed after the DWAF issued various directives under
Section 19 of the Water Affairs Act against us, the provisional liquidators of Buffelsfontein, Harmony Gold, AngloGold Ashanti and
Stilfontein to continue with pumping operations and to contribute to pumping costs in equal shares. A total of three directives have been
issued, the last of which expired on October 21, 2005.

On October 6, 2005, we entered into an agreement with S&J for the sale of our shareholding in Buffelsfontein subject to certain

conditions and approval by the High Court of South Africa. These conditions included indemnifying us against any liabilities or
obligations that could arise relating to environmental rehabilitation and the management and pumping of underground water. The
proposed scheme of arrangement was conditional upon DWAF agreeing to substitute us with S&J to the extent that DWAF envisaged
imposing further responsibility on us. On October 21, 2005, the scheme of arrangement for the acquisition of Buffelsfontein proposed by
S&J and accepted by the majority of Buffelsfontein creditors, including us, was approved and sanctioned by the High Court of South
Africa. Buffelsfontein applied to the High Court for the lifting of its provisional liquidation which was granted on November 1, 2005.

In terms of the DWAF directives, subsequent to the provisional liquidation of Buffelsfontein, we incurred pumping costs of

approximately R8.2 million ($1.3 million).

75

Other Proceedings

In 2000 we became aware of certain irregular transactions and we are currently pursuing the recovery of losses resulting from

these irregular transactions through legal claims.

The Supreme Court of Western Australia has ordered all parties to submit to mediation their dispute to be held before a

mediation registrar. The following actions are to be mediated:

•

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 ($1.9 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 ($238,560) 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
($3.4 million) in connection with the purchase of 11,150,000 shares, of Continental Goldfields Limited, a publicly traded
company in Australia.

•

In March 21, 2003, DRD Australasia Aps and DRD Australia (Pty) Limited instituted action against Mr. C. Mostert in relation to
the over payment to Goldspark Limited of A$260,000 ($0.2 million) pursuant to an agreement for the purchase of 7,140,000
shares in Dome from Goldspark Limited as well as an undue and unauthorized payment to Transit Securities Inc of
A$2.0 million ($1.2 million).

Mr. M. Silver and Fairchoice Limited have 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. We believe that this action is without merit and will continue to vigorously defend against it. The trial on the matter was
heard on April 4 and 15, 2005 and September 12 to 14, 2005. At this stage it is not certain when judgment will be delivered.

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 executive chairman, Mr. M.M. Wellesley-Wood and Associated Intelligence Network (Pty) Limited, or AIN. AIN is a private
investigator firm. Their claim is 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 seek compensation for damages suffered as a result of these alleged
actions in an amount of R1.0 million ($0.2 million) each from us, Mr. M.M. Wellesley-Wood and AIN jointly and severally. In addition,
they seek punitive damages in a total amount of R10 million ($1.6 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 has ruled against us on a technicality, making a ruling to the effect that the trial court will hear and
adjudicate this issue. We will continue to defend against these claims. We are currently awaiting the allocation of a trial date.

On May 22, 2003, we issued a summons in the High Court of Johannesburg against Mr. R.A.R. Kebble in which we seek

payment of R3.2 million ($0.5 million) plus interest. This amount represents 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 has repudiated and/or materially breached the provisions of this agreement. We have,
accordingly, cancelled the agreement and we seek restitution of the amounts paid. Mr. R.A.R. Kebble has lodged a counterclaim,
claiming cancellation of an agreement providing for the payment of retirement benefits ($0.3 million), and challenging the cancellation of
share-options that he held at the time of his resignation from the our board. Both these claims are being defended.

76

On April 22, 2002, we issued a summons in the High Court of Johannesburg against JCI Limited and CAM Limited for payment

of R21.6 million ($3.4 million) plus interest for option fees on shares that we held in Randgold & Exploration Limited, and in respect of
which we extended an option to purchase to JCI Limited and CAM Limited against payment of an agreed option fee, plus a further claim
for the reimbursement of costs, totaling R3.0 million ($0.5 million) which we had incurred on behalf of the defendants in the attempted
corporate reconstruction of Western Areas Limited and Randfontein Estates Gold Mine Limited. The matter was heard on August 30,
2004. At this date partial settlement of certain small claims related to the larger JCI Limited and CAM Limited claim, to the value of R2.4
million ($0.4 million), was awarded to us by the High Court of Johannesburg. On October 21, 2004, the High Court of Johannesburg
ordered JCI Limited and CAM Limited to pay us an amount of R35.7 million ($5.5 million), plus interest and costs, including the costs of
two of our legal counsel. JCI Limited’s and CAM Limited’s counterclaim to recover the earlier part-payment was also dismissed with
costs. JCI Limited and CAM Limited made an application to the High Court of Johannesburg for leave to appeal, which was rejected. In
fiscal 2005, we received full payment of this claim.

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 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. Evidence by a number of witnesses was adduced before the Competition Tribunal during March and April 2006 and the
matter was set down for November 29 and 30, 2006, for argument. At the Tribunal all parties presented their arguments and the Tribunal
will reserve judgment to be delivered on a later date.

On August 2, 2006 and September 4, 2006, two virtually identical applications were brought against the Company and its

directors for relief under the MPRD Act, 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 MPRD Act. 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 Kagiso, engaged the new owners of deposition sites, Mogale who recognize these tailings as an inferred resource,
in discussion to and in collaboration with us, implement interim dust suppression measures pending Mogale’s initiatives to
obtain prospecting and mining permits for these sites.

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
($0.2 million), was granted an option to acquire Durban Deep’s mine village for R15.0 million ($2.2 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 have since
repudiated our agreement with M5 and have notified Rand Leases Properties Limited that we do not intend offering the property to
them. Both parties have indicated to us their intentions to institute legal proceedings for the sale and transfer of the property. To date
we have received no service of legal process related to this matter

.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

77

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 US GAAP. 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.

78

5A. OPERATING RESULTS

Business overview

We are a gold mining company engaged in underground and surface gold mining, including exploration, extraction,

processing and smelting. We have operations comprising underground and open-pit mining and surface retreatment operations,
including the requisite infrastructure and metallurgical processing plants. Our operations are located in South Africa, Papua New
Guinea and Fiji. 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 Crown surface retreatment
operation.

•

Australasia comprising Tolukuma, a 20% interest in the unincorporated Porgera Joint Venture, or Porgera, and
Vatukoula.

In fiscal 2006, the South African Operations accounted for 60% of our attributable production, 76% of our Ore Reserves, a

$16.3 million net loss after tax and 28% of our total assets. The Australasian Operations accounted for 40% of our production, 24% of
our Ore Reserves, a net loss after tax of $10.3 million and 72% of our total assets.

Exploration activities are undertaken in South Africa, Papua New Guinea, Fiji and Australia.

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. Since 1999 our focus has been 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).

An increase in revenue, offset by increased operational costs and a profit arising from our offshore restructuring has resulted

in an improvement in our results for fiscal 2006 in comparison to fiscals 2005 and 2004. In fiscal 2006, there was a notable increase in
our mining assets, following the acquisition of Crown, ERPM and Emperor, as well as $41.0 million spent on capital expenditure
during the year. Our working capital deficit in fiscal 2006 has, however, increased primarily as a result of the classification of the
Senior Convertible Notes as current liabilities.

As at June 30, 2006, we had Ore Reserves of approximately 8.8 million ounces, compared to 5.6 million ounces as at

June 30, 2005.

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 local currencies;

•

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 in the
developing countries in which we operate.

79

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 2006, 2005 and 2004 fiscal years:

2006 fiscal year

2005 fiscal year

% increase

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

8%

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%

2005 fiscal year

2004 fiscal year

% increase

Opening gold spot price on July 1,...................................

$396 per ounce

$346 per ounce

14%

Closing gold spot price on June 30, .................................

$437 per ounce

$396 per ounce

10%

Lowest gold spot price during the fiscal year...................

$387 per ounce

$343 per ounce

13%

Highest gold spot price during the fiscal year..................

$454 per ounce

$427 per ounce

6%

Average gold spot price for the fiscal year ......................

$421 per ounce

$389 per ounce

8%

2004 fiscal year

2003 fiscal year

% increase

Opening gold spot price on July 1,...................................

$346 per ounce

$315 per ounce

10%

Closing gold spot price on June 30, .................................

$396 per ounce

$346 per ounce

14%

Lowest gold spot price during the fiscal year...................

$343 per ounce

$302 per ounce

14%

Highest gold spot price during the fiscal year..................

$427 per ounce

$382 per ounce

12%

Average gold spot price for the fiscal year ......................

$389 per ounce

$334 per ounce

16%

A significant upward trend in the Dollar gold price has been noted over the past three fiscal years. Our production has been

sourced from our South African Operations and Australasian Operations, therefore during those three 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) has moved from R2,684 per ounce, in fiscal 2004, to R2,619 per
ounce in fiscal 2005 (a 2% decrease from fiscal 2004) and R3,381 per ounce in fiscal 2006 (a 29% increase from fiscal
2005).

•

Australian gold price (based on average prices for the year) has increased from A$545 per ounce, in fiscal 2004, to
A$562 per ounce in fiscal 2005 (a 3% increase from fiscal 2004) and A$705 per ounce in fiscal 2006 (25% increase
from fiscal 2005).

80

Gold production and production costs

Attributable gold production from our continuing operations, totaled 527,401 ounces during fiscal 2006, in comparison to

569,036 ounces in fiscal 2005, and 588,088 ounces in fiscal 2004. The North West Operations (our discontinued operation) recorded
production of 199,850 in fiscal 2005 and 341,861 in fiscal 2004.

Our costs and expenses consist primarily of production costs, royalties and depreciation and amortization. Production costs

include labor, contractor services, stores, electricity and other related costs, incurred in the production of gold. Labor is the largest
component of production costs, constituting 35% of production costs for fiscal 2006, as the majority of our mining operations are deep
level underground mines which are more labor intensive.

At our continuing South African Operations (including our attributable share of production from our associates), production

decreased from 329,972 ounces in fiscal 2004, produced from 10.6 million tonnes milled at an average yield of 1.97g/t, to 251,902
ounces in fiscal 2005, produced from 9.8 million tonnes milled at an average yield of 0.80g/t, and then increased to 315,976 ounces
produced from 12.3 million tonnes milled at an average yield of 0.80g/t in fiscal 2006. During fiscal 2006, the average Rand gold
price strengthened by 28%, in comparison to a declining average Rand gold price recorded over the preceding two fiscal years. This
created an opportunity to mine ore grades that were previously seen to be unprofitable. During fiscal 2005, our South African
Operations increasingly focused on mining higher grade ore panels, to achieve an increased yield from the tonnages milled, as a result
of the declining Rand gold price experienced at that time. Blyvoor produced 159,693 ounces from 4.3 million tonnes milled at an
average yield of 1.15g/t in fiscal 2006, in comparison with 161,878 ounces from 3.5 million tonnes milled at an average yield of
1.43g/t in fiscal 2005 and 233,094 ounces, produced from 3.1 million tonnes milled at an average yield of 2.33g/t in fiscal 2004. The
decrease in the grade noted in fiscals 2006 and 2005 was due to a decision taken to move out of seismically active areas, resulting in
lower grades being mined. Crown produced 75,959 attributable ounces from 6.2 million attributable tonnes milled at an average yield
of 0.38g/t in fiscal 2006, in comparison with 45,424 attributable ounces from 3.6 million attributable tonnes milled at an average yield
of 0.40g/t in fiscal 2005 and 51,982 attributable ounces, produced from 4.1 million attributable tonnes milled at an average yield of
0.40g/t in fiscal 2004. ERPM produced 80,324 attributable ounces from 1.8 million attributable tonnes milled at an average yield of
1.37g/t in fiscal 2006, in comparison with 44,600 attributable ounces from 0.9 million attributable tonnes milled at an average yield of
1.55g/t in fiscal 2005 and 44,896 attributable ounces, produced from 0.3 million attributable tonnes milled at an average yield of
4.41g/t in fiscal 2004. The fiscal 2006 production at Crown and ERPM represents 100% of the production from December 1, 2005: Prior
to this date we owned 40% of Crown and ERPM.

At our Australasian Operations (including our attributable share of production from our associate) production increased from

258,116 ounces in fiscal 2004, produced from 1.1 million tonnes milled at an average yield of 7.06g/t, to 317,134 ounces, produced
from 1.6 million tonnes milled at an average yield of 6.07g/t in fiscal 2005, and then decreased to 211,425 ounces, produced from 1.5
million tonnes milled at an average yield of 4.53g/t in fiscal 2006. Our 20% interest in Porgera contributed 128,238 attributable
ounces in fiscal 2006, produced from 1.1 million attributable tonnes milled at an average yield of 3.64g/t, in comparison with
195,394 attributable ounces, produced from 1.2 million attributable tonnes milled at an average yield of 5.06g/t in fiscal 2005 and
147,475 attributable ounces, produced from 0.9 million attributable tonnes milled at an average yield of 4.87g/t in fiscal 2004
(acquired October 14, 2003). The decrease in fiscal 2006 was due to structural challenges experienced in the west wall cutback,
resulting in delayed production. Tolukuma has performed poorer in fiscal 2006, producing 54,790 ounces from 0.2 million tonnes milled
at an average yield of 8.83g/t, in comparison with 76,314 ounces from 0.2 million tonnes milled at an average yield of 11.25 g/t in fiscal
2005 and 85,715 ounces from 0.2 million tonnes milled at an average yield of 13.60g/t in fiscal 2004. This was due to poor weather
conditions preventing continuous freight movement to the mine site by helicopter, ultimately resulting in several plant shutdowns and
underground flooding caused by heavy rainfall during fiscal 2006. Vatukoula also performed poorer in fiscal 2006, producing 28,397
attributable ounces from 0.2 million attributable tonnes milled at an average yield of 5.49g/t, in comparison with 45,426 attributable
ounces from 0.2 million attributable tones milled at an average yield of 6.63 g/t in fiscal 2005 and 24,926 attributable ounces from
0.1 million attributable tonnes milled at an average yield of 6.83g/t in fiscal 2004. Implementation of Vatukoula’s new Accelerated
Development and Training Program, or ACDTP, involved a temporary shutdown of the mine on April 20, 2006, and a gradual start-up
early in June 2006. Consequently, gold production for the fourth quarter was 88% lower than that of the comparative period in fiscal
2005. The ACDTP has been designed to introduce flexibility to production areas, improve infrastructure and increase the productivity of
the workforce. The plan includes development of higher grade areas at Philip Shaft and upgrading of associated shaft infrastructure. In
addition, the entire workforce will undergo comprehensive assessment, re-skilling and retraining. The fiscal 2006 production at Vatukoula
represents 100% of the production from April 6, 2006; prior to this we owned 39.52% (2005: 45.33% and 2004: 19.78%).

81

Due to the accessibility of the Ore Reserves at our Australasian Operations and the high yield per tonne milled, these operations

produced at a cash cost

1

of $421 per ounce and a total cost

2

of $473 per ounce in fiscal 2006, compared with our South African

Operations that produced at a cash cost of $482 per ounce and a total cost of $579 per ounce in fiscal 2006.

General economic factors

As at November 30, 2006, we have six operations in three countries (South Africa, Papua New Guinea and Fiji), and we are

exposed to a number of factors, which could impact on our profitability, resulting from exchange rate fluctuations, inflation and other
risks relating to these specific countries. 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, 2006, approximately 61% of our total revenues were generated in South Africa, and

approximately 39% of our total revenues were generated from our Australasian Operations. Most of our production costs, therefore,
are denominated in local currencies, such as the South African Rand, the Papua New Guinean Kina and the Fiji Dollar. In fiscal 2006,
we derived 100% of our revenues in Dollars and incurred approximately 80% of our production costs in these local currencies. Fiscal
2006 was marked by more consistency in the Dollar, leading to a weakening in the Rand-Dollar exchange rate, which accounted for a
$16 per ounce, or 3%, decrease in cash costs per ounce for our South African Operations from fiscal 2005 to fiscal 2006. This follows
the trend noted in fiscal 2005 which was marked by a stabilization of the prior year trends of the weakening of the Dollar against the
Rand. However, in fiscal 2005, this currency movement still accounted for approximately $4 per ounce, or 6%, of the total increase in
cash costs per ounce for our South African Operations from fiscal 2004. As the price of gold is denominated in Dollars and we realize
our revenues in Dollars, the depreciation of the Dollar against these local currencies reduces our profitability, whereas the appreciation
of the Dollar against these local currencies increases our profitability. Based upon average rates during the respective years, the Rand
weakened by 3% against the Dollar in fiscal 2006 compared to fiscal 2005 and strengthened 10% from fiscal 2004 to fiscal 2005. This
has led to an effective increase of 4% in the average Rand gold price in comparison to June 30, 2005 and a decrease of 10% in fiscal
2005, compared to fiscal 2004. The Kina, based on average rates in the respective fiscal years, weakened by 7% against the Dollar in
fiscal 2006 compared to fiscal 2005 and strengthened by 4% in fiscal 2005 compared to fiscal 2004. The Australian Dollar, based on
average rates in the respective fiscal years, strengthened by 1% against the Dollar in fiscal 2006 compared to fiscal 2005 and
weakened by 5% in fiscal 2005 compared to fiscal 2004, respectively.

As a predominantly 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 of the Rand, Kina, Fiji Dollar and Australian Dollar. 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 total costs per ounce for the continuing operations of our subsidiaries, as well as Porgera, was
$525 per ounce of gold produced in fiscal 2006, $449 per ounce in fiscal 2005 and $418 per ounce in fiscal 2004. The average gold
price received, from continuing operations, was $531 per ounce in fiscal 2006, $423 per ounce in fiscal 2005 and $393 per ounce in
fiscal 2004.

In addition, to fund local operations and comply with South African exchange controls, we hold funds in local currencies,

such as the Rand, Kina, Fiji Dollar and Australian Dollar. The Dollar value of these currencies may be affected by exchange rate
fluctuations and, as a result, our cash and cash equivalents reported in Dollars could change. At June 30, 2006, approximately 52% of
our cash and cash equivalents (including restricted cash), being $35.3 million, were held in such currencies, compared with 64%, or
$14.8 million, at June 30, 2005, and 66%, or $14.8 million, at June 30, 2004.

1

Cash costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating
Results.”

2

Total costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating
Results.”

82

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, Papua New Guinea and Fiji, 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 movement in the Rand/Dollar exchange rate, based upon average rates during the periods presented, and the local annual

inflation rate, as measured by the South African Consumer Price Index, or CPIX, are set out in the table below:

Year ended June 30,

2006

(%)

2005

(%)

2004

(%)

The average Rand/Dollar exchange rate weakened/(strengthened) by

3.3

(9.8)

(23.9)

Less: CPIX (inflation rate).............................................................................................................

4.3

3.5

4.8

Net effect .......................................................................................................................................

(1.0)

(13.3)

(28.7)

The South African CPIX inflation rate has increased in fiscal 2006, following a decreasing trend noted from fiscal 2004 in

comparison to historical trends. However, historically the effect of the movements in the exchange rate has exacerbated the effect on
profitability experienced as a result of the movement in the CPIX inflation rate, as illustrated above.

The movement in the Kina/Dollar exchange rate, based upon average rates during the respective years, and the local annual

inflation rate, as measured by the Papua New Guinea CPIX, are set out in the table below:

Year ended June 30,

2006

(%)

2005

(%)

2004

(%)

The average Kina/Dollar exchange rate weakened /(strengthened) by

6.6

(3.9)

(13.7)

Less: CPIX (inflation rate).............................................................................................................

1.9

0.9

1.9

Net effect .......................................................................................................................................

4.4

(4.8)

(15.6)

The Papua New Guinea CPIX inflation rate has been reasonably consistent from fiscal 2004 to fiscal 2006. However,

historically the strengthening of the Kina against the Dollar has exacerbated the effect on profitability experienced as a result of the
movement in the CPIX inflation rate.

The movement in the Fiji Dollar/Dollar exchange rate, based upon average rates during the respective years, and the local

annual inflation rate, as measured by the Fiji Island Bureau of Statistics, are set out in the table below:

Year ended June 30,

2006

(%)

2005

(%)

2004

(%)

The average Fiji Dollar/Dollar exchange rate weakened /(strengthened) by

1.6

(4.9)

(12.5)

Less: CPIX (inflation rate).............................................................................................................

2.0

2.8

1.3

Net effect .......................................................................................................................................

(0.4)

(7.7)

(13.8)

The Fiji CPIX inflation rate has decreased in fiscal 2006 following an increase in fiscal 2005 compared to fiscal 2004, with

significant movements in the exchange rate noted in fiscals 2005 and 2004.

South African political, economic and other factors

We are a South African company with a large portion of our operations 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.”

83

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.”

Papua New Guinea and Fiji political, economic and other factors

Our operations based in Papua New Guinea and Fiji are also subject to political and economical uncertainties, including the

risk of civil rebellion, expropriation, nationalization, renegotiation of existing contracts, mining licenses and permits, changes in laws
or taxation policies, currency exchange restrictions and international monetary fluctuations.

To enable cash surpluses from Papua New Guinea companies to be applied to entities in Australia or Fiji, the exchange

control and taxation regimes of Papua New Guinea must be complied with. If a Papua New Guinea operating company is to lend
money to, borrow money from or pledge security to, for or on behalf of an Australian or Fiji entity an approval will be required from
the Papua New Guinea Central Bank. Whether that approval is granted depends on the precise nature and terms of the proposed
transaction. The Papua New Guinea Central Bank does not provide prospective rulings. Before any funds can be remitted out of Papua
New Guinea over a limit of Kina 200,000 in any one calendar year a tax clearance must be obtained from the Internal Revenue
Commission of Papua New Guinea. This applies to both the remittance of declared dividends and the remittance of advanced funds. If
the Papua New Guinea operating company has outstanding filings or taxes due, the approval will be withheld until the taxation affairs
are put in order. There is a dividend withholding tax on funds remitted out of Papua New Guinea as dividends and if funds are
borrowed from overseas a withholding tax on interest. There are certain special arrangements applicable to borrowings by mining
companies and if structured appropriately the Papua New Guinea operating entities might be able to avail themselves of certain
exemptions from interest withholding tax. The Papua New Guinea requirements will be additional to any requirements of Fiji or
Australian authorities on the other end of any intercompany transaction.

Due to a change in Fijian tax legislation, a withholding tax is now payable on interest on intercompany loans.

Recent acquisitions and dispositions

The global gold mining industry has experienced active consolidation and rationalization activities in recent years.

Accordingly, we have been, and expect to continue to be, involved in a number of 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 acquiring low cost, high margin mines in other global regions.

On November 16, 2005, we concluded a sale and purchase agreement with Emperor, in terms of which Emperor acquired our

wholly owned subsidiary, DRD (Isle of Man), which in turn holds our Papua New Guinea assets, comprising a 20% interest in the
Porgera Joint Venture, a 100% interest in Tolukuma and all of the exploration tenements in Papua New Guinea. Implementation of the
transaction required the restructuring of our offshore operations, whereby DRD (Isle of Man) transferred the following material assets
to our new wholly owned subsidiary, DRD (Offshore) on January 1, 2006:

•

our 39.52% (previously 45.33%) interest in Emperor;

•

our 50.25% interest in Net-Gold Services; and

•

our rights and obligations of a $7.6 million (A$10.0 million) convertible loan facility, which DRD (Isle of Man) advanced to
Emperor, in terms of which we can elect to convert such debt facility into additional Emperor shares at $0.23 (A$0.30) per
Emperor share.

On March 31, 2006, we sold DRD (Isle of Man) to DRD (Offshore) and on April 6, 2006, DRD (Offshore) sold DRD (Isle of

Man) to Emperor. 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 completion
of the transaction on April 6, 2006. The purchase consideration was settled by the issue of 751,879,699 new Emperor shares at $0.266
per share (valued at $200.0 million) to DRD (Offshore), a cash consideration of $32.3 million and a short-term loan provided by DRD
(Offshore) to the value of $5.0 million.

84

This transaction was accounted for as a reverse acquisition of Emperor by DRD (Isle of Man). The transfer of DRD (Isle of

Man) to Emperor was negotiated in conjunction with the Company obtaining control of Emperor, therefore the sale and purchase
transactions could not be separated and are accounted for as one transaction. The transaction has been accounted for by the Company as a
partial sale of DRD (Isle of Man) and a partial acquisition of Emperor. Accordingly a profit has been recognized by the Company on the
portion of DRD (Isle of Man) sold to minority shareholders. The Company has revalued the assets and liabilities of Emperor to the extent
acquired and has revalued the assets and liabilities of DRD (Isle of Man) to the extent that DRD (Isle of Man) was acquired by the
minority shareholders at the date of acquisition. The purchase consideration is the fair value of the assets transferred to Emperor and the
fair value of the additional interest acquired in Emperor.

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 has been placed on a care and
maintenance program.

On July 6, 2005, we signed a Memorandum of Understanding with our black economic empowerment partner KBH, regarding

the acquisition by Khumo Gold of a 15% stake in our South African Operations, with the intention to bring us into full compliance with
the 10-year, 26% black economic empowerment equity requirement as stipulated in the Mining Charter. On October 27, 2005, our board
of directors approved the black economic empowerment transaction. In addition, on July 20, 2005, we acquired, from the IDC all of its
Crown and ERPM debt through the issue of 4,451,219 shares, which at the date of issue represented $4.5 million (R28.9 million).

The new structure resulted in Khumo Gold acquiring, as a first step, a 15% interest in a newly created vehicle, DRDGOLD SA,

which includes ERPM, Crown and Blyvoor. We have retained an 85% interest in DRDGOLD SA. In the second step, Khumo Gold has
been granted an option, exercisable over the next three years, to acquire a further 11% interest in DRDGOLD SA for the payment
consideration of $1.4 million (R9.3 million). This further equity tranche will include a 6% stake to be placed in a new, proposed
Employee Trust. The transaction was financed by the issuance of $4.8 million (R31.8 million) new Khumo Gold preference shares, to
which we subscribed. The proceeds from these preference shares were used by Khumo Gold to settle an existing loan to KBH of
$1.2 million (R7.9 million), subscribe for $0.6 million (R4.1 million) new preference shares in ERPM, subscribe for $0.4 million
(R2.7 million) new preference shares in Crown, subscribe for $0.6 million (R3.9 million) new preference shares in Blyvoor and
subscribe for an initial 15% of the issued ordinary shares in DRDGOLD SA for $2.0 million (R13.2 million).

On December 11, 2006, Khumo Gold exercised the option granted by us pursuant to the option agreement concluded between

the parties in October 2005. Khumo Gold acquired from us a further 50,000 ordinary shares in DRDGOLD SA for $0.6 million
(R4.3 million). After exercising the option, Khumo Gold's shareholding in DRDGOLD SA increased by 5% 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 $0.7 million (R5.1 million). After exercising the option, the trust's shareholding in
DRDGOLD SA is 6%. We will finance the transaction, on condition that the terms of the finance are determined by independent
experts to be fair and reasonable to our shareholders. It is proposed that we will subscribe for preference shares in Khumo Gold and
extend a loan to the trustees of the trust.

We concluded an agreement with M5 on July 21, 2005, in terms of which M5, against payment of a non-refundable fee of

$0.2 million (R1.5 million), was granted an option to acquire the Durban Deep mine village for $2.2 million (R15.0 million). On
November 18, 2005, M5 exercised the option and provided a guarantee for payment. Prior to registration of 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, and demanding that the property be sold to them on similar terms. We have
since repudiated the agreement of sale with M5, but have also notified Rand Leases Properties Limited that we do not intend offering
the property to them. Both parties have indicated that they intend to institute legal proceedings for the sale and transfer of the property
and we await service of legal process

.

For further details on these transactions refer to Item 4A.: “History and Development of the Company.”

85

Key financial and operating indicators

We consider the key performance measures for the growth of our business and its profitability to be gold revenue, production,

production costs, cash costs per ounce and total costs per ounce, capital expenditure and Ore Reserves. The following table presents
the key performance measurement data for the past three fiscal years:

Operating data

Continuing operations

1

Year ended June 30,

2006

2005

2004

Revenues ($'000)............................................................................................................................... 245,301

183,609

183,254

Gold production (ounces).................................................................................................................

462,058

433,586

466,284

Production costs ($'000)...................................................................................................................

211,559

136,520

143,026

Revenue ($/oz) ................................................................................................................................

531

423

393

Cash costs ($/oz)

2

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

458

315

307

Total costs ($/oz)

3

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

536

449

418

Capital expenditure ($'000)...............................................................................................................

40,957

21,339

21,406

Ore Reserves (ounces) .....................................................................................................................

8,833,000

5,567,000

5,969,000

Discontinued operation

4

Year ended June 30,

2005

2004

Revenues ($'000)................................................................................................................................

81,538

130,036

Gold production (ounces)..................................................................................................................

199,850

341,861

Production costs ($'000)....................................................................................................................

100,695

134,465

Revenue ($/oz) ..................................................................................................................................

408

380

Cash costs ($/oz)

2

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

504

393

Total costs ($/oz)

3

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

630

441

Capital expenditure ($'000)................................................................................................................

3,524

5,511

Ore Reserves (ounces) .......................................................................................................................

- 5,047,000

1

For part of fiscal 2006 and for fiscal 2005 and fiscal 2004 the operating data excludes our 40% share of our equity accounted

associate Crown, which owned ERPM, and our 39.52% (2005: 45.33% and 2004: 19.78%) investment in Emperor, prior to these
entities becoming subsidiaries. The operating data includes our 20% attributable interest in the proportionately consolidated Porgera
Joint Venture.

2

Cash costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating
Results.”

3

Total costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating
Results.”

4

On March 22, 2005, the North West Operations were placed under provisional liquidation. As a result we report the 2005 and 2004

information as a discontinued operation and all other operations as continuing operations.

86

Revenue

Revenue is derived from the sale of gold. The following table analyzes the revenue per operation:

Year ended June 30,

Continuing operations

2006

$'000

2005

$'000

2004

$'000

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

83,635

68,370

90,066

Crown

1

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

31,310

-

-

ERPM

1

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

33,840

-

-

Total South African Operations..........................................................................................................

148,785

68,370

90,066

Porgera Joint Venture

2

................................................................................................................................ 64,991

82,793

60,445

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

29,085

32,446

32,743

Vatukoula

3

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

2,440

-

-

Total Australasian Operations..........................................................................................................

96,516 115,239

93,188

Total .....................................................................................................................................................

245,301 183,609 183,254

Discontinued operation

North West Operations

4

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

-

81,538 130,036

For fiscal 2006, revenue from continuing operations increased from $183.6 million in fiscal 2005 to $245.3 million, with the

average gold price received by us increasing to $531 per ounce, compared to $423 per ounce in fiscal 2005 and production increasing
from 433,586 ounces in fiscal 2005 to 462,058 ounces in fiscal 2006. The effect on revenue of the increased gold price was offset
marginally by the weakening of local currencies against the Dollar and widespread production problems, especially in the Australasian
Operations.

For fiscal 2005, revenue from continuing operations increased marginally from $183.3 million in fiscal 2004 to

$183.6 million, with the average gold price received by us increasing to $423 per ounce, compared to $393 per ounce in fiscal 2004.
The effect on revenue of the increased gold price was offset by the decrease in production of 32,698 ounces from fiscal 2004. On
March 22, 2005 we announced the provisional liquidation of the North West Operations. Revenues from the North West Operations
for the period ended March 22, 2005 were $81.5 million compared to $130.0 million in fiscal 2004. These operations have been
treated as a discontinued operation.

1

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 an associate.

2

With effect from October 14, 2003, we acquired a 20% interest in the unincorporated Porgera Joint Venture. This interest is

proportionately consolidated from that date.

3

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% and 2004: 19.78%) of Emperor, which was treated as an associate.

4

On March 22, 2005, the North West Operations were placed under provisional liquidation. As a result we report the 2005 and 2004

information as a discontinued operation and all other operations as continuing operations. We have adjusted the results for prior
reporting periods accordingly.

87

Gold production

The following table analyzes the attributable production per operation:

Production in ounces

Year ended June 30,

Continuing operations

2006

2005

2004

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

159,693

161,878

233,094

  Surface operations....................................................................................................................

39,515

23,920

34,883

  Underground operations...........................................................................................................

120,178

137,958

198,211

Crown

1

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

75,959

45,424

51,982

ERPM

1

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

80,324

44,600

44,896

Surface operations....................................................................................................................

20,325

9,208

707

Underground operations...........................................................................................................

59,999

35,392

44,189

Total South African Operations ......................................................................................

315,976

251,902

329,972

Porgera Joint Venture

2

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

128,239

195,394

147,475

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

54,790 76,314 85,715

Vatukoula

3

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

28,397

45,426

24,926

Total Australasian Operations ........................................................................................

211,425          317,134           258,116

Total attributable production ..........................................................................................

527,401

569,036

588,088

Attributable production of associates included above

1 3

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

(65,343)

(135,450)

(121,804)

Total production ...............................................................................................................

462,058

433,586

466,284

Discontinued operation

North West Operations

4

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

-

199,850

341,861

  Surface operations....................................................................................................................

-

27,328

43,180

  Underground operations...........................................................................................................

-

172,522

298,681

For fiscal 2006, our total attributable gold production from continuing operations (including our attributable production from

associates) decreased by 41,635 ounces, or 7%, to 527,401 ounces from 569,036 ounces produced in fiscal 2005.

Attributable gold production from our continuing South African Operations increased by 25% from 251,902 ounces produced

in fiscal 2005 to 315,976 ounces in fiscal 2006. This increase was mainly as a result of the restructuring of the South African
Operations, which included the acquisition of 60% of Crown and ERPM on December 1, 2005. At Blyvoor an increasing level of
seismicity was experienced in the high-grade No. 5 Shaft areas in the first half of fiscal 2006. Consequent concerns for employee
safety prompted the development of a volume-driven mine plan involving less mining from the affected high-grade No. 5 Shaft areas
and more mining from the lower-grade No. 6 Shaft areas. While rock dump material declined both in volume and grade as forecast,
the slimes dam retreatment project at Blyvoor showed improvement both in terms of volume and grade, notwithstanding setbacks due
to higher than average summer rainfall.

1

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 an associate.

2

With effect from October 14, 2003, we acquired a 20% interest in the unincorporated Porgera Joint Venture. This interest is

proportionately consolidated from that date.

3

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% and 2004: 19.78%) of Emperor, which was treated as an associate.

4

On March 22, 2005, the North West Operations were placed under provisional liquidation. As a result we report the 2005 and 2004

information as a discontinued operation and all other operations as continuing operations. We have adjusted the results for prior
reporting periods accordingly.

88

Attributable gold production at the Australasian Operations decreased by 33%, from 317,134 ounces in fiscal 2005, to

211,425 ounces in fiscal 2006, as a result of a decrease in production at all Australasian Operations. Remediation work following the
failure of the west wall at Porgera in fiscal 2005, leading to reliance on low-grade, long-term stockpile material as the primary ore
feed, together with damage to access infrastructure caused by heavy rainfall, power failures and a strike related to a change of
management from Placer Dome to Barrick, had a negative impact on production at Porgera. At Tolukuma production was adversely
affected by a lack of available face in the first half of fiscal 2006 and the consequent treatment of low-grade underground stockpiles,
as well as production disruptions caused by underground flooding. At Vatukoula production for fiscal 2006 was adversely affected by
an amalgam of factors including a lack of available face, shaft infrastructure problems, ageing underground equipment, inflows of hot
water, high underground working temperatures and deteriorating ground conditions.

For fiscal 2005, our total attributable gold production from continuing operations (including our attributable production from

associates and joint venture) decreased by 19,052 ounces, or 3%, to 569,036 ounces from 588,088 ounces produced in fiscal 2004.

Attributable gold production from our continuing South African Operations decreased by 24% from 329,972 ounces

produced in fiscal 2004 to 251,902 ounces in fiscal 2005. This was as a result of the poor recoveries at the Slimes Dam Project at
Blyvoor and the restructuring, which impacted productivity, completed in the second quarter of fiscal 2005 at Blyvoor. At Crown the
Knights plant’s absorption of tonnage from ERPM’s Cason surface retreatment operations was relatively smooth, however the Crown
plant did not meet expectations largely due to a general decrease in grade, less reclamation site flexibility and pipeline failures.

Attributable gold production at the Australasian Operations increased by 23% from 258,116 ounces in fiscal 2004 to 317,134

ounces in fiscal 2005. This was as a result of improved production at Porgera in the first two quarters of fiscal 2005, reflecting higher
grades and the installation of a secondary crusher. Vatukoula faced operational problems during fiscal 2005, ranging from halted
production at the Philip Shaft, where a winder failed, lower than expected grades and delays in the supply of components needed to
rebuild the heavy vehicles.

The North West Operations were placed under provisional liquidation on March 22, 2005, following a series of events

culminating in a devastating earthquake, and were therefore treated as a discontinued operation.

A more detailed review of gold production at each of our operations is provided under Item 4D.: “Property, Plant and

Equipment.”

89

Cash costs

1

and total costs

2

per ounce

Our operational focus is to increase production, improve productivity and reduce costs. For fiscal 2006, cash costs from our

continuing operations increased to $458 per ounce of gold from $315 per ounce of gold in fiscal 2005. Total costs from our continuing
operations increased to $536 per ounce of gold from $449 per ounce of gold in fiscal 2005.

In fiscal 2006, the cash costs per ounce from our continuing South African Operations increased by 4%, from $464 per ounce

to $482 per ounce, compared to fiscal 2005. Cash costs per ounce for the Australasian Operations increased by 86%, from $226 per
ounce to $421 per ounce, compared to fiscal 2005. The marginal increase in cash costs per ounce at our South African Operations was
mainly due to price increases in key consumables (labor, consumables and electricity) and a decrease in production at Blyvoor,
partially offset by the relatively lower cash costs per ounce at Crown and ERPM. The increase in cash costs per ounce at our
Australasian Operations was primarily attributable to operational problems at Tolukuma, costs associated with the West Wall
remediation at Porgera and a six-week shut down of operations in the fourth quarter of fiscal 2006 at Vatukoula.

In fiscal 2005, the cash costs per ounce from our continuing South African Operations increased by 18%, from $393 per

ounce to $464 per ounce, compared to fiscal 2004. Cash costs per ounce from our Australasian Operations increased by 2%, from $221
per ounce to $226 per ounce, compared to fiscal 2004. The increase in cash costs per ounce at our South African Operations was
mainly attributable to the strengthening of the Rand against the Dollar, price increases in key consumables, a decrease in production
due to the poor recoveries at the Slimes Dam Project and the restructuring completed in the second quarter of fiscal 2005 at Blyvoor.
The increase in cash costs per ounce at our Australasian Operations was due to less efficient mining and increased costs associated
with consumables and services, especially the cost of fuel.

Our total cost per ounce from continuing operations, increased from $449 per ounce in fiscal 2005 to $536 per ounce in fiscal

2006. This increase was primarily attributable to operational difficulties experienced at the Australasian Operations.

Our total cost per ounce from continuing operations, increased from $418 per ounce in fiscal 2004 to $449 per ounce in fiscal

2005. This increase was mainly due to employment termination costs of $4.2 million ($10 per ounce) at Blyvoor and our head office
in South Africa in fiscal 2005, unrealized foreign exchange losses of $9.3 million ($15 per ounce) recorded in fiscal 2005, compared
to unrealized foreign exchange gains of $10.7 million ($26 per ounce) recorded in fiscal 2004.

1

Cash costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating
Results.”

2

Total costs per ounce is a non-US GAAP 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 production costs see Item 5A.: “Operating
Results.”

90

Reconciliation of cash costs per ounce, total costs and total costs per ounce

Cash costs of production include costs for all mining, processing, administration, royalties and production taxes, but exclude

depreciation, depletion and amortization, rehabilitation, employment termination costs, corporate administration costs, capital costs
and exploration costs. Cash costs per ounce are calculated by dividing production costs by ounces of gold produced. Cash costs per
ounce have been calculated on a consistent basis for all periods presented.

Total production 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 production costs, plus other operating and non-operating income,

finance charges 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 ounce are calculated by dividing total costs
by attributable ounces of gold produced. Total costs and total costs per ounce have been calculated on a consistent basis for all periods
presented.

Cash costs per ounce, total costs and total costs per ounce are non-US GAAP financial measures that should not be

considered by investors in isolation or as alternatives to production costs, net (loss)/profit applicable to common stockholders,
(loss)/profit before tax and other items or any other measure of financial performance presented in accordance with US GAAP 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 ounce, total costs and total costs per ounce 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 ounce, total costs and total costs per ounce 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 ounce, by comparison of the cash costs per ounce by mine to the price of gold; and

•

a benchmark of performance to allow for comparison against other mines and mining companies.

A reconciliation of production costs to total costs, cash costs per ounce and total costs per ounce, for each of the three years in

the period ending June 30, 2006, is presented below. In addition, we have also provided below details of the ounces of gold produced
by each mine for each of those periods.

91

For the year ended June 30, 2006
(in $'000, except as otherwise noted)

Blyvoor

Crown

1

ERPM

1

Other

2

Total South

African

Operations

Porgera

3

Tolukuma Vatukoula

4

Other

2

Total

Australasian

Operations

Total

Production costs

5

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

76,936

26,697

28,642

1,362

133,637

37,021

33,448

7,453

-

77,922 211,559

Plus:

Depreciation and amortization .......................

3,697

2,338

2,027

49

8,111

10,014

3,930

2,694

27

16,665

24,776

Movement in rehabilitation provision,
reclamation and closure costs .......................

(979)

(392)

(176)

1,802

255

2,246

356

(423)

-

2,179

2,434

Total production costs ...................................

79,654

28,643

30,493

3,213

142,003

49,281

37,734

9,724

27

96,766 238,769

Plus:

-

-

Employment termination costs ........................

-

-

-

153

153

-

-

722

-

722

875

Movement in gold in process............................

315

(67)

8

-

256

1,879

(1,546)

(1,134)

-

(801)

(545)

Non-operating loss/(income) ............................

63

(36)

1,824

2,389

4,240

(88)

(92)

293 (16,661) (16,548) (12,308)

Interest expense ...............................................

494

90

61

9,795

10,440

350

363

308

-

1,021

11,461

Impairment of assets ........................................

-

-

-

3

3

-

-

-

-

-

3

Management and consulting fees.......................

235

-

273

1,446

1,954

-

-

-

453

453

2,407

Profit on derivative instruments........................

-

-

- (5,388)

(5,388)

-

-

(4,413)

(966)

(5,379) (10,767)

Profit on sale of mining assets ..........................

(13)

-

-

(3)

(16)

-

-

(34)

(967)

(1,001)

(1,017)

Selling, administration and general
charges ............................................................

2,267

1,221

1,331

1,951

6,770

8,524

5,552

3,158 (4,994)

12,240

19,010

Total costs........................................................

83,015

29,851

33,990

13,559

160,415

59,946

42,011

8,624 (23,108)

87,473 247,888

Gold produced (ounces)

6

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

159,693

56,000

61,278

-

276,971 128,238

54,790

2,059

-

185,087 462,058

Cash costs per ounce ($ per ounce)..................

482

477

467

-

482

289

610

3,620

-

421

458

Total costs per ounce ($ per ounce) ................

520

533

555

-

579

467

767

4,188

-

473

536

1

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 an associate.

2

Relates to other non-core operating entities within the Group.

3

With effect from October 14, 2003, we acquired a 20% interest in the unincorporated Porgera Joint Venture.

4

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% and 2004:

19.78%) of Emperor, which was treated as an associate.

5

Production costs equate to cash costs of production.

6

For part of fiscal 2006, 2005 and 2004 the gold production numbers exclude our 40% share of our equity accounted associate Crown, which owned ERPM, and our 39.52%

(2005: 45.33% and 2004: 19.78%) investment in Emperor, prior to these entities becoming subsidiaries. The operating data includes our 20% attributable interest in the
proportionately consolidated Porgera Joint Venture.

92

For the year ended June 30, 2005
(in $'000, except as otherwise noted)

Continuing operations

Discontinued

operations

Blyvoor

Other

1

Total South

African

Operations

Porgera

2

Tolukuma

Other

Total

Australasian

Operations

Total North West

3

Production costs

4

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

73,814

1,218

75,032

36,210

25,278

-

61,488

136,520

100,695

Plus:

Depreciation and amortization.....................

2,716

(2,773)

(57)

11,613

3,336

(1,095)

13,854

13,797

971

Movement in rehabilitation provision,
reclamation and closure costs .................... (1,353)

1,667

314

2,424

(1)

-

2,423

2,737

1,023

Total production costs ................................

75,177

112

75,289

50,247

28,613

(1,095)

77,765

153,054

102,689

Plus:

Employment termination costs .....................

3,050

1,151

4,201

-

-

-

-

4,201

224

Movement in gold in process.........................

(421)

-

(421)

(1,182)

(114)

-

(1,296)

(1,717)

383

Non-operating income ...................................

(220)

2,313

2,093

265

955

3,074

4,294

6,387

(320)

Interest expense .............................................

607

9,927

10,534

-

-

831

831

11,365

70

Impairment of assets .....................................

-

664

664

-

-

-

-

664

39,451

Management and consulting fees...................

307

5,599

5,906

493

-

252

745

6,651

-

Loss/(profit) on derivative instruments.........

388

(4,004)

(3,616)

-

-

-

-

(3,616)

-

Profit on sale of mining assets ......................

-

(2)

(2)

-

-

-

-

(2)

-

Profit on disposal of subsidiary....................

-

-

-

-

-

-

-

-

(18,105)

Selling, administration and general
charges ........................................................

1,786

5,169

6,955

3,427

3,702

3,693

10,822

17,777

1,505

Total costs....................................................

80,674

20,929

101,603

53,250

33,156

6,755

93,161

194,764

125,897

Gold produced (ounces)

5

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

161,878

-

161,878

195,394

76,314

-

271,708

433,586

199,850

Cash costs per ounce ($ per ounce)..............

456

-

464

185

331

-

226

315

504

Total costs per ounce ($ per ounce) ............

498

-

628

273

434

-

343

449

630

1

Relates to other non-core operating entities within the Group.

2

With effect from October 14, 2003, we acquired a 20% interest in the Porgera Joint Venture.

3

On March 22, 2005, the North West Operations were placed under provisional liquidation. As a result we report the 2005 and 2004 North West Operations’ information as a

discontinued operation and all other operations as continuing operations. We have adjusted the results for prior reporting periods accordingly.

4

Production costs equate to cash costs of production.

5

The gold production numbers exclude production from our 40% held associate, Crown, which owned ERPM, and our 45.33% associate, Emperor, but include our 20%

attributable interest in the Porgera Joint Venture.

93

For the year ended June 30, 2004
(in $'000, except as otherwise noted)

Continuing operations

Discontinued

operation

Blyvoor

Other

1

Total South

African

Operations

Porgera

2

Tolukuma

Other

Total

Australasian

Operations

Total

North West

Operations

3

Production costs

4

..................................... 90,366

1,189

91,555

31,650

19,821

-

51,471

143,026

134,465

Plus:

Depreciation and amortization....................

2,643

(1,199)

1,444

9,260

7,340

7,931

24,531

25,975

4,160

Movement in rehabilitation provision,
reclamation and closure costs .................

779

79

858

180

148

63

391

1,249

2,206

Total production costs .............................

93,788

69

93,857

41,090

27,309

7,994

76,393

170,250

140,831

Plus:

Employment termination costs ..................

899

-

899

-

-

-

-

899

7,064

Movement in gold in process......................

579

-

579

(1,499)

-

-

(1,499)

(920)

(80)

Non-operating income ................................

(192)

(23,261)

(23,453)

(9)

(118)

11,602

11,475

(11,978)

(881)

Interest expense ..........................................

906

6,800

7,706

1,103

226

(1,285)

44

7,750

162

Impairment of assets ..................................

-

2,990

2,990

-

-

-

-

2,990

1,276

Management and consulting fees.................

198

1,850

2,048

244

-

156

400

2,448

-

Loss/(profit) on derivative instruments.......

1,376

(334)

1,042

-

-

-

-

1,042

124

Loss/(profit) on sale of mining assets .........

56

(1)

55

-

-

-

-

55

-

Selling, administration and general
charges .......................................................

2,037

24,733

26,770

1,979

3,032

(9,181)

(4,170)

22,600

2,344

Total costs................................................... 99,647

12,846

112,493

42,908

30,449

9,286

82,643

195,136

150,840

Gold produced (ounces)

5

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

233,094

-

233,094

147,475

85,715

-

233,190

466,284

341,861

Cash costs per ounce ($ per ounce).............

388

-

393

215

231

-

221

307

393

Total costs per ounce ($ per ounce) ...........

427

-

483

291

355

-

354

418

441

1

Relates to other non-core operating entities within the Group.

2

With effect from October 14, 2003, we acquired a 20% interest in the Porgera Joint Venture.

3

On March 22, 2005, the North West Operations were placed under provisional liquidation. As a result we report the 2005 and 2004 North West Operations’ information as a

discontinued operation and all other operations as continuing operations. We have adjusted the results for prior reporting periods accordingly.

4

Production costs equate to cash costs of production.

5

The gold production numbers exclude production from our 40% held associate, Crown, which owned ERPM, and our 19.78% investment in Emperor, but include our 20%

attributable interest in the Porgera Joint Venture.

94

Capital expenditure

During fiscal 2006, total capital expenditure relating to continuing operations was $41.0 million, compared to $21.3 million

in fiscal 2005, which represents a $19.7 million, or 92%, increase in capital expenditure on a Group level. At our continuing South
African Operations, capital expenditure increased from $0.8 million in fiscal 2005 to $14.1 million in fiscal 2006, mainly due to
$8.8 million spent on opening up and development related to implementation of the new mine plan at Blyvoor, infrastructural
improvements of $1.6 million at ERPM and $2.0 million towards the installation of the new mills at the Knights plant at Crown.
Capital expenditure in the Australasian Operations, increased from $20.5 million in fiscal 2005, to $26.9 million in fiscal 2006. Of this
expenditure $17.2 million related to Porgera, as a result of capitalized deferred stripping costs and remediation work following the
failure of the west wall in fiscal 2005. In addition, $11.1 million was spent at Vatukoula in the initial phase of upgrading the Philip
Shaft infrastructure, $5.2 million of which was in fiscal 2006 since becoming a subsidiary, the replacement of outdated underground
equipment, and improved underground environmental control. Tolukuma has spent $2.8 million on mine development and
$1.5 million on heavy equipment in fiscal 2006.

Total capital expenditure relating to continuing operations during fiscal 2005 was $21.3 million, compared to $21.4 million in

fiscal 2004. At our continuing South African Operations, capital expenditure decreased from $9.2 million in fiscal 2004, to
$0.8 million in fiscal 2005, due to an increased focus on efficient utilization of existing assets. This expenditure included the
installation of a Knelsen concentrator and Acacia reactor at the Blyvoor plant. Capital expenditure in the Australasian Operations,
increased from $12.2 million in fiscal 2004, to $20.5 million in fiscal 2005. Of this expenditure $17.2 million related to Porgera,
mostly as a result of capitalized deferred stripping costs of $11.1 million and $3.4 million to Tolukuma.

Ore Reserves

As at June 30, 2006, our Ore Reserves from continuing operations were estimated at 8.8 million ounces, as compared to

approximately 5.6 million ounces at June 30, 2005, representing a 59% increase year-on-year. Excluding the effect of depletion, our Ore
Reserves have increased by 3.8 million ounces, or 68%. This is primarily due to the acquisition of Crown and ERPM and the stronger
gold price. As at June 30, 2005, our Ore Reserves from continuing operations were estimated at 5.6 million ounces, as compared to
approximately 6.0 million ounces at June 30, 2004, representing a 7% decrease. Excluding the effect of depletion, the reserves had in fact
increased by 3% due to continued efforts to explore and prove up Ore Reserves at Tolukuma.

We seek to increase our Ore Reserves through development and to acquire additional new Ore Reserves through acquisitions.

Year ended June 30,

('000 ounces)

2006

2005

2004

Continuing operations

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

5,255

3,998

4,329

Crown

1

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

424

339

329

ERPM

1

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

1,003

342

176

Total South African Operations ...........................................................................

6,682

4,679

4,834

Porgera Joint Venture

2

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

1,278

1,351

1,437

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

195

218

203

Vatukoula

3

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

678

305

217

Total Australasian Operations .............................................................................

2,151

1,874

1,857

Total attributable Ore Reserves ...........................................................................

8,833

6,553

6,691

Attributable Ore Reserves of associates included above

1 3

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

-

(986)

(722)

Total Ore Reserves.........................................................................................................

8,833

5,567

5,969

Discontinued operation

North West Operations

4

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

-

-

5,047

1

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 an associate.

2

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, 2005.

3

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% and 2004: 19.78%) of Emperor, which was treated as an associate.

4

On March 22, 2005, the North West Operations were placed under provisional liquidation. As a result we report the 2005 and 2004

information as a discontinued operation and all other operations as continuing operations. We have adjusted the results for prior
reporting periods accordingly.

95

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:

•

Mining assets

•

Deferred stripping costs

•

Impairment of mining assets

•

Deferred income and mining taxes

•

Reclamation and environmental costs

•

Collectability of receivables

•

Post-retirement medical benefits

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.

Mining assets

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. Amortization is calculated on a mine-by-mine basis (i.e. the cost pools are the
individual mines) using the units of production method. Under the units of production method, we estimate the amortization rate based on
actual production over total Proven and Probable Ore Reserves of the particular mine. This rate is then applied to actual costs capitalized
to date to arrive at the amortization expense for the period. Proven and Probable Ore Reserves of the particular mine reflect estimated
quantities of economically and legally recoverable reserves, as determined in accordance with the SEC's Industry Guide 7 under the US
Securities Exchange Act of 1934. 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 amortization charges recorded in our consolidated financial statements.

Deferred stripping costs

We have only one significant open-pit operation, at Porgera, where stripping costs incurred during the production phase to

remove additional waste are charged to operating costs on the basis of the average life of mine stripping ratio. For other open-pit
operations stripping costs are expensed in the period in which they are incurred. Stripping costs included in mining assets as at
June 30, 2006, for Porgera were $23.6 million (June 30, 2005: $12.5 million; June 30, 2004: $3.5 million) with $12.9 million capitalized
to mining assets during fiscal 2006 (fiscal 2005: $11.1 million; fiscal 2004: $4.1 million). During fiscal 2006, the average stripping ratio
for Porgera was 9.2 in comparison with the life of mine stripping ratio of 10.2. Wedge and mudstone failure on the West Wall of the
Stage 5 pit at Porgera at the end of fiscal 2005 created unplanned waste material, which is in the process of being removed, which has
negatively affected the life of mine stripping ratio. The stripping ratio is determined based on the life of mine plan. The estimate of the
total reserves of a mine could be materially different from the actual gold mined and from the actual usage of a mine due to changes in the
factors used in determining the economic value of our mineral reserves and deferred stripping costs, such as the gold price and foreign
currency exchange rates. Any change in management’s estimate of the total expected future life of a mine would impact the amortization
charge recorded and deferred stripping capitalized in our consolidated financial statements.

96

Impairment of mining assets

The impairment of long-lived assets is accounted for in accordance with the Statement of Financial Accounting Standards, or

SFAS, No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” or SFAS 144.

Under SFAS 144, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the

carrying amount of an asset or group of assets may not be recoverable, including a reduction in the extent to which a gold plant is used, a
dramatic change in the manner in which the Ore Reserves are used, a substantial drop in the gold price, a change in the law or
environment in the country in which the Ore Reserves are based or gold is sold, forecasts showing lack of long-term profitability or
production costs are in excess of an amount originally expected when the asset was acquired or constructed. Recoverability of an asset or
asset group is assessed by comparing the carrying amount of an asset or group of assets to the estimated future undiscounted net cash
flows of the asset or group of assets. Estimates of future cash flows include estimates of future gold prices and foreign exchange rates.
Therefore, changes could occur which may affect the recoverability of our mining assets. If an asset or asset group is considered to be
impaired, the impairment which is recognized is measured as the amount by which the carrying amount of the asset or group of assets
exceeds the discounted future cash flows expected to be derived from that asset or group of assets. The expected future cash flows are
discounted at a market rate commensurate with the risk in the respective geographic locations in which our assets are held. The asset or
asset group is the lowest level for which there are identifiable cash flows that are largely independent of other cash flows. In carrying out
the economic valuations, an assessment is made of the future cash flows expected to be generated by these assets, taking into account
current market conditions and the expected lives of our assets. The lowest level for which there are identifiable cash flows that are largely
independent of other cash flows is calculated on a mine-by-mine basis. We make the analysis periodically on a mine-by-mine basis or
when indicators of impairment exist. During fiscal 2006, $nil was recorded as an impairment and during fiscal 2005 and 2004,
$0.7 million and $1.4 million (from the discontinued operation), respectively, were recorded as an impairment by applying these
principles.


Deferred income and mining taxes

We follow the liability method of accounting for deferred income and mining tax whereby we recognize the tax consequences of

temporary differences by applying current statutory tax rates applicable to future years to differences between financial statement
amounts and the tax bases of certain assets and liabilities. Changes in deferred tax assets and liabilities include the impact of any tax rate
changes enacted during the year.

A valuation allowance is raised against deferred tax assets which are not considered more likely than not to be realizable. These

determinations are based on the projected realization of tax allowances and tax loss carry forwards. Assessing the recoverability of
deferred tax assets requires management to make significant estimates related to expectations of future taxable income. If these tax assets
are not more likely than not to be realized, an adjustment to the valuation allowance would be required, which would be charged to
income in the period that the determination was made. If we determine that it is more likely than not that we would be able to realize the
tax assets in the future, in excess of the recorded amount thereof, an adjustment to reduce the valuation allowance would be recorded.
Management considers historical taxable positions in determining if a tax asset will be utilized, specifically with reference to the
immediately preceding three fiscal years. As a result of these determinations, increases in the valuation allowance of $0.3 million,
$10.1 million and $16.9 million were recorded during fiscal 2006, 2005 and 2004, respectively. The bulk of these related to our
continuing South African Operations. In addition, an increase in the valuation allowance relating to our discontinued operation, the North
West Operations, amounting to $70.2 million was recorded in fiscal 2004.

Reclamation and environmental costs

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 143, “Accounting

for Asset Retirement Obligations,” or SFAS 143. SFAS 143 came into effect for fiscal years beginning after June 15, 2002 and we
adopted it on July 1, 2002. SFAS 143 requires that the fair value of liabilities for asset retirement obligations be recognized in the period
in which they are incurred. A corresponding increase to the carrying amount of the related asset, where one is identifiable, is recorded and
is depreciated over the life of the asset. Prior to the adoption of SFAS 143, we accrued for the estimated reclamation and closure liability
through annual charges to earnings over the estimated life of the mine.

97

The provision for asset retirement obligations relates to expected costs associated with the demolition of gold plants, shaft

headgear and shaft infrastructure. Estimates of these costs are based on our knowledge at the time of creating the provision. Determining
these costs is complex and requires management to make estimates and judgments because most of the removal obligations will be
fulfilled in the future and contracts and regulations often have vague descriptions of what constitutes removal. These estimates are subject
to changes in regulations and unexpected movements in inflation rates and are, therefore, subject to annual review to ensure that the asset
and liability is a fair reflection of the expected reclamation and closure costs as at June 30 of every year. The actual liability for
rehabilitation costs can vary significantly from our estimate, if our assessment of these costs changes. As we use the expected cash flow
technique to determine our future liability, the liability is determined by discounting the estimated cash flows using a credit-adjusted risk-
free rate. Thus, the effect of our credit standing is reflected in the discount rate rather than in the estimated cash flows. As at
June 30, 2006, the discount rate was determined to be 7.26%.

As a result of changes in estimates $7.5 million, $0.1 million and $2.0 million were raised in fiscal 2006, 2005 and 2004,

respectively, including movements related to the discontinued operation. Accretion expense of $2.4 million, $3.7 million and $1.5 million
was recorded in fiscal 2006, 2005 and 2004, respectively, including the discontinued operation.

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.

Collectability of receivables

In determining the collectability of receivables, management judgment is required in instances where uncertainty exists over the

period and amount of cash flows which will be received. In determining this expectation, operational and economic circumstances
affecting the receivable are considered. These principles were applied in evaluating the collectability of the receivables owed by Crown
and ERPM (prior to these operations becoming subsidiaries), as well as KBH and Mogale. Advances to the value of $1.9 million were
provided for in fiscal 2004. No further advances were made during fiscal 2005 and 2006, however we provided for $0.6 million against
the receivable owed by Mogale in fiscal 2005. In fiscal 2006 an agreement was signed with the IDC pursuant to which we acquired all of
the IDC loans, including the rights securing payment of such loans, to Crown and ERPM for a purchase consideration of $4.5 million. As
uncertainty over the repayment of the loans existed subsequent to their acquisition, an allowance of $4.5 million was raised.

Post-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. The Group has an obligation to provide medical benefits to certain of its 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. At June 30, 2006 a provision
of $2.3 million (June 30, 2005: $nil) for post-retirement medical benefits has been raised. During fiscal 2006, we expensed
$0.5 million (2005: $nil; 2004: $nil) 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.

98

Operating results

Comparison of financial performance for the fiscal year ended June 30, 2006 with fiscal year ended June 30, 2005

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 2006 in comparison to fiscal 2005:

Impact of change in volume

$’000

Total

revenue

2005      Acquisitions

Internal

decline

Impact of

change in

price

Net

change

Total

revenue

2006

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

68,370

-

(923)

16,188

15,265

83,635

Crown

1

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

-

31,310

-

-

31,310

31,310

ERPM

1

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

-

33,840

-

-

33,840

33,840

Total South African Operations ...............

68,370

65,150

(923)

16,188

80,415

148,785

Porgera Joint Venture....................................

82,793

-

(28,456)

10,654

(17,802)

64,991

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

32,446

-

(9,151)

5,790

(3,361)

29,085

Vatukoula

2

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

-

2,440

-

-

2,440

2,440

Total Australasian Operations...................

115,239

2,440

(37,607)

16,444 (18,723)

96,516

Total .............................................................

183,609

67,590

(38,530)

32,632

61,692

245,301

Revenue for fiscal 2006 increased by $61.7 million, or 34%, to $245.3 million, primarily due to the acquisition of Crown,

ERPM and Emperor. The negative impact of production problems experienced, especially at Porgera and Tolukuma, were partially
offset by an increase in the Dollar gold price received at all the operations. The average gold price received by us increased from $423
per ounce in fiscal 2005 to $531 per ounce in fiscal 2006.

1

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 an associate.

2

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% and 2004: 19.78%) of Emperor, which was treated as an associate.

99

Production costs

The following table illustrates the year-on-year change in production costs from continuing operations by evaluating the

contribution of each segment to the total change on a consolidated basis for fiscal 2006 in comparison to fiscal 2005:

Impact of change in volume

$’000

Total

production

costs

2005     Acquisitions

Internal

decline

Impact of

change in

costs

Foreign

exchange

Net

change

Total

production

costs

2006

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

73,814

-

(996)

6,535

(2,417)

3,122

76,936

Crown

1

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

-

26,697

-

-

-

26,697

26,697

ERPM

1

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

-

28,642

-

-

-

28,642

28,642

Other

2

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

1,218

-

-

144

-

144

1,362

Total South African Operations .

75,032

55,339

(996)

6,679

(2,417)

58,605

133,637

Porgera Joint Venture.......................36,210

-

(12,445)

11,693

1,563

811

37,021

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

25,278

-

(7,130)

14,106

1,194

8,170

33,448

Vatukoula

3

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

-

7,453

-

-

-

7,453

7,453

Total Australasian Operations....

61,488

7,453

(19,575)

25,799

2,757

16,434

77,922

Total ...............................................

136,520

62,792

(20,571)

32,478

340

75,039

211,559

The following table lists the components of production costs for each of the years set forth below:

Years ended June 30,

Costs

2006

2005

Labor ............................................................................................................................................

35%

51%

Contractor Services.......................................................................................................................

22%

19%

Inventory .....................................................................................................................................

31%

19%

Electricity.....................................................................................................................................

12%

11%

As gold mining in South Africa is very labor intensive, labor costs and contractor services are the largest components of

production costs in that region. Production costs are linked directly to the level of production of a specific fiscal year. Production costs
in fiscal 2006 increased by 55% to $211.6 million compared to production costs of $136.5 million in fiscal 2005. This increase was
primarily attributable to production and trough-put problems at the Australasian Operations as well as the acquisition of Crown,
ERPM and Emperor.

At Blyvoor production costs increased from $73.8 million in fiscal 2005 to $76.9 million in fiscal 2006, with a decrease in

volume from 161,878 ounces to 159,693 ounces produced, due to an increasing level of seismicity experienced in the high-grade No. 5
Shaft areas in the first half of the year. Consequent concerns for employee safety prompted the development of a volume-driven mine
plan involving less mining from the affected high-grade No. 5 Shaft areas and more mining from the lower-grade No. 6 Shaft areas.
While rock dump material declined both in volume and grade as forecast, the slimes dam retreatment project at Blyvoor showed
improvement, both in terms of volume and grade, notwithstanding setbacks due to higher than average summer rainfall. At Crown and
ERPM, production costs were $26.7 million and $28.6 million from December 1, 2005, producing 56,000 ounces and 61,278 ounces,
respectively, during this time.

1

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 an associate.

2

Relates to non-operating entities within the Group.

3

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% and 2004: 19.78%) of Emperor, which was treated as an associate.

100

Production costs at Porgera increased from $36.2 million in fiscal 2005 to $37.0 million in fiscal 2006. Remediation work

following the failure of the West Wall towards the end of fiscal 2005, led to reliance on low-grade material as the primary ore feed.
This, together with damage to access infrastructure caused by heavy rainfall, power failures and a strike related to a change of
management from Placer Dome to Barrick, had a negative impact on production. At Tolukuma production was adversely affected by a
lack of available face in the first half of fiscal 2006 and the consequent treatment of low-grade underground stockpiles, as well as
production disruptions caused by underground flooding, leading to an increase in production costs from $25.3 million in fiscal 2005 to
$33.4 million in fiscal 2006. At Vatukoula, production costs from April 6, 2006, amounted to $7.5 million. Production costs at
Vatukoula were adversely affected by an amalgam of factors including a lack of available face, shaft infrastructure problems, ageing
underground equipment, inflows of hot water, high underground working temperatures and deteriorating ground conditions.

Rehabilitation provision and amounts contributed to environmental trust funds

As of June 30, 2006, we estimate our total rehabilitation provision, being the discounted estimate of future costs, to be

$46.8 million, $36.5 million relating to the South African Operations and $10.3 million relating to the Australasian Operations, as
compared to $22.6 million at June 30, 2005. Accretion of $2.4 million was recorded in fiscal 2006, and $2.7 million (relating to
continuing operations only) was recorded in fiscal 2005.

A total of $8.3 million was invested in our various environmental trust funds as at the end of fiscal 2006, as compared to

$6.4 million for fiscal 2005. The increase is mostly attributable to the acquisition of Crown and ERPM. Additional contributions were
also made during the year under review, due to under-funding of the liability at certain South African Operations. 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 and amortization

Depreciation and amortization charges relating to the continuing operations were $24.8 million for fiscal 2006 compared to

$13.8 million for fiscal 2005. This increase is mainly due to the consolidation of Crown, ERPM and Emperor in fiscal 2006.

Employment termination costs

Employment termination costs decreased to $0.9 million in fiscal 2006 from $4.2 million for fiscal 2005. In fiscal 2006, these

costs related to the retrenchment of four employees that had been seconded to the North West Operations, at a cost of $0.2 million,
and the retrenchment of 120 employees, at a cost of $0.7 million, after the temporary shut down in April 2006 of Vatukoula for
restructuring.

Impairment of assets

During fiscal 2006 an impairment of $nil was recorded compared to an impairment of $0.7 million in fiscal 2005.

Management and consulting fees

Management and consulting fees in fiscal 2006 decreased by $4.3 million to $2.4 million compared to $6.7 million in fiscal

2005. These expenses mostly relate to the evaluation of possible acquisitions. Costs have decreased due to tighter cost controls being
instituted.

Profit/(loss) on derivative instruments

Changes in the fair value of derivative instruments in fiscal 2006 resulted in a gain of $10.8 million, as compared with a gain

of $3.6 million in fiscal 2005. This relates to a gain on gold option contracts entered into by DRD (Isle of Man), of $1.0 million, a gain

on forward sale commodity contracts entered into by Emperor of $4.4 million, and the fair value adjustment on the derivative
component of the senior convertible loan notes, a profit of $5.4 million (2005: $3.8 million)

.

Selling, administration and general charges

The selling, administration and general charges increased in fiscal 2006 to $19.0 million as compared to $17.8 million in

fiscal 2005, an increase of $1.2 million. The increase is mainly due to the consolidation of Crown, ERPM and Emperor in fiscal 2006.

101

Interest and other income

Interest and other income decreased from $2.4 million in fiscal 2005 to $1.7 million in fiscal 2006. In fiscal 2005, we earned

more interest as a result of investing excess cash from borrowings and capital raising in high interest bearing accounts held at financial
institutions.

Unrealized foreign exchange (losses)/gains

Our functional currency is the Rand for our South African Operations, the Kina for our Papua New Guinean Operations and

the Fiji Dollar for our operation based in Fiji. The unrealized foreign exchange loss of $6.8 million for fiscal 2006, compared to a loss
of $9.3 million for fiscal 2005, represents the effect of the translation of monetary items, primarily external debt, which is
denominated in currencies other than our functional currencies.

Profit on disposal of subsidiaries

During fiscal 2006, a $17.2 million profit was realized as a result of the sale of a portion of our interest in DRD (Isle of Man)

to the shareholders of Emperor. The transaction has been accounted for as a partial sale of DRD (Isle of Man) and a partial acquisition of
Emperor. Accordingly a profit has been recognized on the portion of DRD (Isle of Man) sold to minority shareholders. This profit
represents the excess of the portion of the fair value of DRD (Isle of Man) sold over that portion of its historical cost. In fiscal 2006, we
also realized a profit on the sale of Stand 752 Parktown Extension (Pty) Limited (a subsidiary which owned our corporate offices) of
$0.1 million.

Interest expense

Our interest expense increased to $11.5 million for fiscal 2006 as compared to $11.4 million for fiscal 2005. This expense is

consistent with the prior year despite an increase in our total long-term debt from $79.0 million in fiscal 2005 to $126.4 million in
fiscal 2006. The increase in the long-term debt, however, mostly relates to borrowing facilities with the ANZ Banking Group Limited,
held by Emperor and its subsidiaries. Emperor became our subsidiary in April 2006, therefore the interest expense relating to these
facilities has not been included in the consolidated results for the entire year.

Income and mining tax expense

The net tax expense of $4.1 million for fiscal 2006 comprises a current taxation charge of $2.4 million mainly relating to

Porgera and a deferred tax charge of $1.7 million relating to the Australasian Operations. This compares to a current tax charge of
$12.6 million and a net deferred tax benefit of $6.8 million in fiscal 2005. The decrease in the current taxation charge is due to the
decreased profitability of our Australasian Operations. The increase in the deferred tax charge was mainly as a result of the increase in
the life of mine of Porgera.

Equity in loss from associates

A loss of $19.9 million was recorded during fiscal 2006 in relation to Emperor and Crown, which were previously our

associates. Of this amount $15.4 million relates to the recognition of losses in Emperor after which the investment in Emperor was
carried at nil value, until April 6, 2006, from which date Emperor has been consolidated as a subsidiary. Furthermore, during fiscal
2006, we acquired loans from the IDC, which the IDC previously held with Crown, our previous associate, and its subsidiary, ERPM.
These loans were acquired as part of the restructuring of the South African Operations. As uncertainty over the repayment of the loans
existed subsequent to their acquisition, an allowance of $4.5 million was raised. The investment in Crown was carried at nil value until
December 1, 2005, the date that Crown became a subsidiary.

Profit from discontinued operation, net of taxes

In fiscal 2006 we recovered costs of $2.9 million from the liquidator relating to the liquidation of Buffelsfontein Gold Mines

Limited, our subsidiary which owned the North West Operations.

102

Comparison of financial performance for fiscal year ended June 30, 2005 with fiscal year ended June 30, 2004

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 2005 in comparison to fiscal 2004:

$’000

Total

revenue

2004

Impact of

change in

volume due to

internal

growth/

(decline)

Impact of

change in

price

Net change

Total

revenue

2005

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

90,066

(27,989)

6,293

(21,696)

68,370

Total South African Operations ..................

90,066

(27,989)

6,293

(21,696)

68,370

Porgera Joint Venture.......................................

60,445

18,833

3,515

22,348

82,793

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

32,743

(3,695)

3,398

(297)

32,446

Total Australasian Operations.....................

93,188

15,138

6,913

22,051

115,239

Total ................................................................

183,254

(12,851)

13,206

355

183,609

Revenue from continuing operations, for fiscal 2005, was consistent at $183.6 million compared to $183.3 million in fiscal

2004, as a result of revenue from the Australasian Operations, negating the effect of a significant decrease in production volumes at
the continuing South African Operations, because of poor recoveries at the Slimes Dam Project, the restructuring completed in the
second quarter of our financial year at Blyvoor and the yield at these operations decreasing in fiscal 2005. The decrease in production
in fiscal 2005 was partially offset by a stronger Dollar gold price received during the year. The average gold price received by us was
$423 per ounce in fiscal 2005, compared to $393 per ounce in fiscal 2004.

Production costs

The following table illustrates the year-on-year change in production costs from continuing operations by evaluating the

contribution of each segment to the total change on a consolidated basis for fiscal 2005 in comparison to fiscal 2004:

$’000

Total

production

costs

2004

Impact of

change in

volume due to

internal

growth/

(decline)

Impact of

change in

costs

Foreign

exchange

Net change

Total

production

costs

2005

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

90,366

(21,844)

(3,664)

8,956

(16,552)

73,814

Other

1

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

1,189

-

29

-

29

1,218

Total South African Operations ........

91,555

(21,844)

(3,635)

8,956

(16,523)

75,032

Porgera Joint Venture.............................

31,650

14,698

(11,374)

1,236

4,560

36,210

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

19,821

(2,884)

7,567

774

5,457

25,278

Other

1

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

-

-

-

-

-

-

Total Australasian Operations............

51,471

11,815

(3,808)

2,010

10,017

61,488

Total ......................................................

143,026

(10,030)

(7,443)

10,966

(6,506)

136,520

1

Relates to non-operating entities within the Group.

103

The following table lists the components of production costs for each of the years set forth below:

Years ended June 30,

Costs

2005

2004

Labor .............................................................................................................................................

51%

50%

Contractor Services.......................................................................................................................

19%

19%

Supplies ........................................................................................................................................

19%

20%

Electricity......................................................................................................................................

11%

11%

As gold mining in South Africa is very labor intensive, labor costs and contractor services are the largest components of our

production costs in that region. Production costs are linked directly to the level of production of a specific fiscal year. We incurred
production costs of $136.5 million in fiscal 2005, compared to $143.0 million in fiscal 2004. The decrease of 5% is mostly as a result
of a decrease in production volumes at the continuing South African Operations which have been partially offset by an increase in
production at the Australasian Operations. The majority of our production costs are incurred in local currencies and foreign exchange
movements on these costs also contributed to the increase in production costs.

Rehabilitation provision

As of June 30, 2005, we estimated our total rehabilitation provision being the discounted estimate of future costs, to be

$22.6 million ($nil of this balance relating to the discontinued North West Operations) as opposed to $39.1 million at June 30, 2004
($18.5 million of this balance relating to the discontinued North West Operations). Accretion of $2.7 million was recorded in fiscal
2005 and $1.2 million was recorded in fiscal 2004, relating to the continuing operations. The total rehabilitation provision of
$19.6 million on March 22, 2005, relating to the North West Operations, was transferred to the liquidators.

A total of $6.4 million was invested in our various environmental trust funds at the end of fiscal 2005, as compared to

$22.8 million for fiscal 2004. Growth in the environmental trust funds amounted to $0.8 million during fiscal 2005, with $16.9 million
of the fiscal 2004 balance having been transferred to the liquidators of Buffelsfontein Gold Mine Limited (the North West
Operations). The shortfall relating to the continuing operations is expected to be financed by ongoing financial contributions to the
Environmental Rehabilitation Trust Funds of the respective mining operations.

Depreciation and amortization

Depreciation and amortization charges were $13.8 million for fiscal 2005 as compared to $26.0 million for fiscal 2004. This

decrease relates to a reduction in depreciation on mine development at Tolukuma, due to a decrease in the life of mine for
underground operations and non-recurring amortization charges during fiscal 2004, which were associated with the restructuring of
Tolukuma.

Employment termination costs

Employment termination costs increased to $4.2 million for fiscal 2005 as compared to $0.9 million for fiscal 2004. For fiscal

2005, these costs mostly relate to a retrenchment process following a 60-day review at Blyvoor, where 1,619 employees were
retrenched at a cost of $3.1 million, by October 5, 2004. In addition, retrenchments at our head office, to improve corporate
efficiencies and minimize corporate expenditure, gave rise to an expense of $1.2 million in fiscal 2005.

Impairment of assets

During fiscal 2005, real estate located at the Durban Deep mine was written down by $0.7 million to $2.2 million, being the

estimated fair value of these assets. We negotiated the sale of this real estate and the estimated fair value was determined during these
negotiations.

Management and consulting fees

Management and consulting fees in fiscal 2005 increased by $4.3 million to $6.7 million compared to $2.4 million in fiscal

2004. These expenses mostly related to consulting fees for the evaluation of possible acquisitions in fiscal 2005, preparatory work for
complying with the Sarbanes-Oxley Act of 2002 and capital raisings.

104

Profit/(loss) on derivative instruments

The profit/(loss) on derivative instruments in fiscal 2005 was a gain of $3.6 million, as compared with a loss of $1.0 million

in fiscal 2004. In fiscal 2004, 265,000 ounces were closed out on the Eskom gold for electricity contract, realizing a loss of
$1.4 million compared to the remaining 50,000 ounces which were closed out in fiscal 2005, realizing a loss of $0.4 million. Due to
higher interest rates in fiscal 2005, the fair value adjustment on the interest rate swap was a profit of $0.2 million compared to a loss of
$1.6 million in fiscal 2004. The fair value adjustment on the derivative portion of the senior convertible notes was a profit of
$3.8 million in fiscal 2005 (2004: $2.0 million).

Selling, administration and general charges

In fiscal 2005, the selling, administration and general charges decreased by $4.8 million to $17.8 million from $22.6 million

in fiscal 2004. In fiscal 2005, management instituted tighter cost controls together with retrenchments at corporate level, which
contributed to the reduction of these expenses.

Interest and other income

Interest and other income increased by $1.2 million, or 100%, from $1.2 million during fiscal 2004 to $2.4 million during

fiscal 2005. This was mainly as a result of investing excess cash from borrowings and capital raising, in high interest bearing accounts
held at financial institutions.

Unrealized foreign exchange gains

Our functional currency is the Rand for our South African Operations and the Kina for the Papua New Guinea Operations.

The unrealized foreign exchange loss of $9.3 million for fiscal 2005, compared to a gain of $10.7 million for fiscal 2004, represented
the effect of the translation of monetary items, primarily external debt, which is denominated in currencies other than our functional
currencies.

Interest expense

Our interest expense increased to $11.4 million for fiscal 2005 as compared to $7.8 million for fiscal 2004. The increase was

primarily as a result of obtaining new borrowing facilities from Investec Bank Limited and Investec Bank (Mauritius) Limited during
fiscal 2005.

Income and mining tax expense

The net tax expense for fiscal 2005 comprised a deferred tax benefit of $6.8 million and a current tax charge of $12.6 million.

This compares to a deferred tax charge of $6.8 million and a current tax charge of $7.4 million in fiscal 2004. In fiscal 2005, the
increase in the current tax charge mostly related to the inclusion of Porgera for a full year compared to nine months in fiscal 2004. In
fiscal 2004, $5.5 million of the deferred tax charge related to the South African Operations and $1.3 million related to the Australasian
Operations. Valuation allowances of $30.5 million were raised against the deferred tax assets of the South African Operations in fiscal
2005, compared to $96.4 million in fiscal 2004. The decrease is primarily as a result of the liquidation of the North West Operations in
fiscal 2005.

Equity in loss from associates

A loss of $20.5 million was recorded during fiscal 2005 in relation to our associate, Emperor, $13.3 million relating to an

impairment of the carrying amount of the investment and $7.2 million relating to losses recognized against our equity investment. No
amount was recorded for Crown, as no further advances were made to this associate during fiscal 2005 and the investment is carried at
nil value in fiscal 2005 (2004: $nil). An impairment of $8.8 million was recognized in fiscal 2004 relating to advances made during
that fiscal year to Crown, which were seen by management to be irrecoverable.

105

Loss from discontinued operation, net of taxes

On March 22, 2005, application was made to the High Court of South Africa for the provisional liquidation of Buffelsfontein

Gold Mines Limited, our subsidiary which owns the North West Operations, which order was granted on the same day. As a result of
the liquidation, a profit of $18.1 million was recorded in fiscal 2005. Included in the calculation of this profit is expenditure of $7.3
relating to the liquidation. This expenditure includes additional wages of $4.5 million, $1.5 million set aside for a social plan, $0.8
million relating to essential services, such as pumping, and $0.5 million relating to legal and other costs.

Revenue from the sale of gold from our discontinued operation, for fiscal 2005, was $81.5 million and for fiscal 2004 was

$130.0 million.

During fiscal 2004, the production focus at the North West Operations shifted towards the mining of high-grade ore panels.

This continued during fiscal 2005, with the production of 199,850 ounces of gold from 1.9 million tonnes of ore mined, resulting in a
yield of 3.32 g/t. During fiscal 2004, 341,861 ounces of gold were produced from 3.2 million tonnes of ore milled, with a yield of
3.37 g/t.

On June 26, 2004, we entered into a further 60- day review period at Buffelsfontein designed to restore the operations to

profitability. Proposals were received in a consultative forum in which both management and organized labor participated, and were
distributed to the Department of Labor and the Department of Minerals and Energy, for their input. Agreement was reached with all
the relevant parties early in August 2004 to close the No. 9 Shaft, but to keep the No. 10 and 12 Shafts in operation on condition that
certain defined sustainability thresholds were met. This agreement resulted in the retrenchment of 120 employees at this mining
operation during fiscal 2005 at a cost of R3.7 million ($0.6 million).

At December 31, 2004, due to the poor operational results at the North West Operations, we evaluated the carrying amount of

these mining assets and determined that the carrying value was not recoverable. The difference between the carrying amount and fair
value of the North West Operations’ mining assets was recognized as an impairment loss of $39.5 million for the year ended June 30,
2005. The fair value was determined by calculating the present value of future cash flows of the North West Operations’ mining assets
discounted at the credit adjusted rate.

106

5B. LIQUIDITY AND CAPITAL RESOURCES

Net cash utilized by operating activities

Net cash of $2.4 million was utilized by operating activities for fiscal 2006 as compared to cash utilized by operating activities

of $23.8 million for fiscal 2005 and cash utilized by operating activities of $25.1 million for fiscal 2004. During fiscal 2006, the net
working capital movement represented an outflow of cash of $6.4 million, compared to an inflow of $1.6 million in fiscal 2005. With the
acquisition of Emperor, the liability relating to the derivative instruments has increased resulting in an increase in the cash outflow
associated with these instruments in fiscal 2006. In fiscal 2006, $5.8 million was used to settle a portion of the forward gold contracts in
Emperor. In fiscal 2005, $3.6 million was used to close out the remaining balance of the Eskom gold for electricity contract. The decrease
in cash utilized by operating activities in fiscal 2006 compared with fiscal 2005 was primarily due to improved profitability from our
South African Operations.

Net cash utilized in investing activities

Net cash utilized in investing activities decreased to $30.3 million in fiscal 2006 from $31.6 million in fiscal 2005 and

$94.1 million in fiscal 2004.

Cash utilized in investing activities during fiscal 2006, included capital expenditure of $41.0 million net of cash acquired from

the acquisitions of Crown, ERPM and Emperor of $7.1 million and cash received on the disposal of Stand 752 Parktown Extension (Pty)
Limited of $0.6 million. In fiscal 2005, cash utilized in investing activities included $6.9 million with regards to taking up our share of
the Emperor Rights offering, $1.7 million relating to costs of the Emperor share offer and capital expenditure of $21.4 million relating to
our continuing operations and $3.5 million relating to our discontinued operation (North West Operations). Cash utilized in investing
activities in fiscal 2004 comprised funds advanced to Crown and ERPM of $8.8 million, our acquisition of a 20% interest in the Porgera
Joint Venture for $59.2 million, net of cash acquired, our acquisition of a 50.25% interest in Net-Gold Services Limited for $0.6 million,
net of cash acquired, and capital expenditure at our continuing operations of $21.4 million and $5.5 million at our discontinued operation.

Total capital expenditure for fiscal 2006 was $41.0 million. Capital expenditures were predominantly on Ore Reserve

development and new underground mining equipment at all operations. Significant capital projects for fiscal 2006 included:

•

Ore Reserve development at Blyvoor at a cost of $8.8 million;

•

Installation of new mills at Crown’s Knights Plant at a cost of $2.0 million;

•

Improvement of infrastructure at ERPM at a cost of $1.6 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 $ 5.2 million; and

•

Contributions to the West Wall refurbishment at Porgera of $15.8 million.

Total capital expenditure for fiscal 2005 was $24.9 million. In fiscal 2005, capital expenditures were predominantly on mining

equipment and development, upgrading existing underground operations and upgrading metallurgical plants. Redundant capital
equipment was sold during the year, the proceeds of which amounted to $2.2 million. Significant capital projects for fiscal 2005 included:

•

Ore Reserve development at the North West Operations at a cost of $3.5 million;

•

Investment in mobile motor vehicle equipment at Tolukuma of $1.5 million;

•

Improvements to the plant and equipment at Porgera of $1.4 million; and

•

Capitalization of $11.1 million of deferred stripping costs at Porgera.

Total capital expenditure for fiscal 2004 was $26.9 million. In fiscal 2004, capital expenditures were predominantly on Ore

Reserve development, building a slimes dam reclamation facility at the Blyvoor Section and the inclusion of our 20% share of the capital
expenditure of Porgera. Redundant capital equipment was sold during the year, the proceeds of which amounted to $3.4 million.
Significant capital projects for fiscal 2004 included:

•

Ore Reserve development at the North West Operations at a cost of $2.2 million;

•

Construction of the processing facilities at No. 4 and 5 Slimes Dams at Blyvoor at a cost of $6.9 million;

•

Extensions to the No. 6 Slimes Dam at Blyvoor at a cost of $0.7 million;

•

Expansion of and additions to the mobile plant and equipment at Tolukuma at a cost of $2.5 million; and

•

Capital expenditure of $8.7 million with respect to our 20% interest in Porgera, which includes the capitalization of deferred
stripping costs of $4.1 million.

107

We anticipate increasing our capital expenditure in fiscal 2007 by about 50% from our capital expenditure for fiscal 2006.

We expect to incur $54.2 million of capital expenditure on mining equipment and development, upgrading existing underground
operations and upgrading current metallurgical plants as follows:

•

Blyvoor - $8.4 million;

•

Crown - $5.4 million;

•

ERPM - $3.7 million;

•

Porgera - $6.2 million (our 20% attributable share);

•

Tolukuma - $6.1 million;

•

Vatukoula - $24.2 million (pending completion of a strategic review to optimize the value of Vatukoula and other Fijian land
holdings, the mine has been placed on a care and maintenance program and this capital expenditure will be reviewed); and

•

Corporate - $0.3 million.

Net cash generated in financing activities

Net cash generated from financing activities was $52.6 million in fiscal 2006 compared to $67.4 million in fiscal 2005 and

$88.6 million in fiscal 2004.

During fiscal 2006, we issued 18,445,044 shares for proceeds of $25.9 million. Of these shares, we issued 17,815,945 shares to

Investec raising $25.4 million in settlement of financing facilities and 629,009 shares to the share option scheme for a consideration of
$0.5 million. In addition we issued 4,451,219 shares to the IDC for loans we acquired from them for $4.5 million, which the IDC
previously held with Crown and ERPM. Furthermore, 932,857 shares were issued as payment for consulting services rendered of
$1.2 million.

During fiscal 2005, we issued a total of 56,230,705 shares to raise $65.9 million. On October 14, 2004, DRD (Isle of Man)

entered into a facility of $15.0 million with Investec (Mauritius), of which $10.0 million had been drawn down at June 30, 2005. Of the
total shares issued in fiscal 2005, we issued 17,000,000 shares to Baker Steel by way of a specific issue raising $14.4 million, 15,804,116
shares through a claw-back rights offer raising $13.3 million and 23,348,465 shares to Investec raising $38.2 million, in settlement of
financing facilities acquired in the fourth quarter of fiscal 2004 and the first and second quarters of fiscal 2005.

On March 8, 2004, we announced a conditional takeover offer to acquire all of the outstanding shares in Emperor that were not

already owned by us for a consideration of one of our shares for every five shares in Emperor held. On June 10, 2004, we announced a
revised final offer of five of our shares for every twenty two shares in Emperor held. The revised offer represented a 14% increase over
the previous offer. On July 30, 2004, our offer to Emperor’s shareholders closed with us having received acceptances from Emperor’s
shareholders representing approximately 25.55% of Emperor’s issued capital, thereby increasing our shareholding in Emperor to 45.33%.
Accordingly, we issued 6,612,676 shares in exchange for the 29,097,269 Emperor shares to the value of $16.6 million, based on the
market value of our shares on the date issued, with share issue and transaction costs associated with the take over offer amounting to $1.7
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:

Senior Convertible Notes

On November 12, 2002, we issued $66,000,000 aggregate principal amount of 6% Senior Convertible Notes due November

2006, in a private placement to qualified institutional buyers and to non-US persons. We issued the notes at a purchase price of 100% of
the principal amount thereof. If not converted or previously redeemed, the notes could be repaid at 102.5% of their principal amount plus
accrued interest on the fifth business day following their maturity date in November 2006. The notes were convertible into our ordinary
shares, or, under certain conditions, ADSs, at a conversion price of $3.75 per share or ADS, subject to adjustment in certain events. We
were entitled to redeem the notes at their accreted value plus accrued interest, if any, subject to certain prescribed conditions being
fulfilled, after November 12, 2005. As of June 30, 2006, the effective interest rate on the convertible notes was 16.08% per annum and the
outstanding balance was $66.9 million. On November 15, 2006, we paid a total of $69.6 million to the holders of the notes from our
available cash resources and borrowing facilities in full and final settlement of our obligations under the notes.

108

Industrial Development Corporation Loan

On July 18, 2002, Blyvoor entered into a loan agreement with IDC for R65.0 million ($10.4 million) to finance capital

expenditures incurred by Blyvoor in completing the Blyvoor expansion project. The loan bears interest at 1% below the prime rate of
First National Bank of Southern Africa Limited on overdraft. The loan is repayable in 48 monthly installments. Repayments were
suspended in January 2005 until January 2006. The loan is secured by means of a general notarial bond over the Blyvoor metallurgical
plant.

The loan agreement prohibits us from disposing of or further encumbering the secured assets and places restrictions over our

ability to change the business of Blyvoor. Current restructuring changes have not impacted on the terms of the loan agreement.

As of June 30, 2006, we have drawn down R19.4 million ($2.7 million) under this facility. As of June 30, 2006, the interest rate

on this loan was 10.0%. At November 30, 2006, the outstanding balance was R11.9 million ($1.7 million) with an applicable interest rate
of 10.5%.

Investec Bank Limited and Investec Bank (Mauritius) Limited

We have entered into funding facilities with Investec Bank Limited, or Investec, or its affiliates:

On October 14, 2004, our subsidiary, DRD (Isle of Man) entered into a facility of $15.0 million with Investec Bank

(Mauritius) Limited, or Investec (Mauritius). The facility bears interest at the three-month London Inter-bank Offered Rate, or
LIBOR, plus 300 basis points. Funds advanced and interest on this facility must be repaid in cash in equal installments every three
months from the date of the relevant advance so that the amount of the advance is paid in full to Investec (Mauritius) on or before
November 12, 2007. The facility was secured by DRD (Isle of Man)’s shares in Emperor, DRD (Porgera) Limited and Tolukuma. The
loan agreement prohibited us from disposing of or further encumbering the secured assets. The facility restricted the flow of payments
from DRD (Isle of Man) to the Company through requiring that all net operating cash or cash distributions received by DRD (Isle of
Man) in respect of the secured assets must be used to first service our interest and principal payment obligations under the facility by
requiring that we hold, in a debt servicing account, sufficient cash to cover our quarterly principal payments. Any funds in excess of
these repayment requirements could be transferred to the Company. Investec (Mauritius) had the option to require DRD (Isle of Man)
to pay 50% of any payments, which are a distribution, by or on behalf of DRD (Isle of Man) to or for the account of the Company as a
prepayment of the facility. The facility agreement contained a number of additional customary restrictive covenants. At June 30, 2005,
$10.0 million had been drawn down under this facility. During fiscal 2006 this facility was fully repaid.

On December 10, 2004, we entered into a facility of R100.0 million ($15.0 million) with Investec. The facility bears interest

at the three-month Johannesburg Inter-bank Acceptance Rate, or JIBAR, plus 300 basis points. During fiscal 2005, we had drawn
down R60.0 million ($9.0 million) under this facility. and settled this amount by issuing 8,060,647 ordinary shares to the value of
R60.0 million ($9.6 million), based on the market value at the date of issue. In fiscal 2006 we drew down a further R40.0 million
($6.2 million) under this facility and repaid this amount by issuing 4,129,915 ordinary shares to the value of R40.0 million
($6.2 million). This facility is not renewable.

On March 3, 2005, an additional acquisition facility of $35.0 million was entered into with Investec (Mauritius). The

acquisition facility of $35.0 million was on similar terms as the $15.0 million facility entered into on October 14, 2004, and had
similar restrictions on the flow of funds and could be settled through the issue of shares. As at June 30, 2005, this facility had not been
utilized. During fiscal 2006, we had drawn down $14.4 million under this facility, which was fully repaid by March 16, 2006, by the
issue of 8,498,250 of our ordinary shares to the value of $14.4 million (including interest). On September 13, 2006, the $35.0 million
acquisition facility was amended. The terms are similar to the previous agreement except for the facility now being secured over our
shareholding in Emperor. The facility is renewable. At November 30, 2006 we had drawn down $33.0 million under this facility.

Baker Steel Capital Managers LLP

On April 5, 2005, we entered into a subscription agreement and an underwriting agreement pursuant to which we raised, in

aggregate, R180.4 million ($27.7 million) through the issue of new shares by way of:

•

a specific issue of 17 million new shares at a cash price of R5.50 each to Baker Steel Capital Managers LLP, or BSCM,
clients to raise R93.5 million ($14.4 million); and

•

a claw-back offer of 15,804,116 shares at an issue price of R5.50 each to our shareholders to raise R86.9 million ($13.3
million) in accordance with the terms of a separate offering circular to our shareholders. The funds from the claw-back offer
were received on April 12, 2005.

109

In terms of the subscription agreement, BSCM clients subscribed for 17 million new shares at a subscription price of R5.50

per share, which was equivalent to the volume weighted average price of our shares on the JSE for the ten trading days immediately
prior to April 5, 2005. The specific issue shares rank pari passu with our shares already in issue. At a general meeting of our
shareholders held on May 20, 2005, a specific resolution was passed to authorize our directors to allot and issue these shares. The
funds from the specific issue were received on June 1, 2005.

ANZ Banking Group Limited

There are four loan facilities from the ANZ Banking Group Limited, or ANZ Bank, to Emperor and they comprise the

Vatukoula loan facility, project loan facilities, a property loan and a gold call option facility.

The Vatukoula loan facility is secured by Emperor Gold Mining Company Limited (Fiji) as follows:

(1) a first registered deed of charge over all present and future assets and undertakings of Emperor other than excluded

assets (Certain Special Prospecting Leases and all the shares in Tuvatu Gold Mining Company Limited);

(2) a first registered mortgage over all freehold and leasehold land;
(3) a first registered mortgage over Special Site Rights 6, 7, 8 and Special Mining Leases 54, 55 and 56; and
(4) a first registered Bill of Sale over its motor vehicles.

Agreement was reached with ANZ Bank prior to June 30, 2006 to restructure this loan facility with the first loan repayment

due on April 30, 2007 to the value of $1.9 million. Further biannual repayments are to be made of this amount beginning on
October 31, 2007 with a final payment of $0.9 million due on October 31, 2009. The loan bears interest at LIBOR plus 2.5% per
annum. The balance on this loan at June 30, 2006 was $9.8 million.

On March 21, 2006 Emperor announced the signing of documentation with ANZ Bank for project loan facilities totaling

$42.0 million. These facilities comprise a $35.0 million senior facility with a 59 month tenor and a $7.0 million revolving working
capital facility. The security in relation to this facility was as follows:

(1) fixed and floating charges over the assets of Tolukuma in Papua New Guinea and Western Australia;
(2) fixed and floating charges over the assets of the Porgera Joint Venture, other than which require the consent of the

Porgera Joint Venture partners, in Papua New Guinea and Western Australia;

(3) mortgages over the shares of DRD (Porgera) Limited and Tolukuma Gold Mines Limited;
(4) tripartite agreements with key suppliers and contract counterparties;
(5) mortgage over the Tolukuma Tenements; and
(6) fixed and floating charge over the assets of DRD (Isle of Man) Limited.

The facilities bear interest at LIBOR plus 2% per annum. The balance on this loan at June 30, 2006 was $43.1 million.

The property loan represents a mortgage over a property purchased in Brisbane during May 2006. The loan attracts interest

payments only for the first five years of the mortgage. A First Registered Mortgage by Emperor over the property situated at 45
Milman St, Clayfield, Queensland, Australia will be held by ANZ Bank as security for this loan. The loan bears interest at 6.79% per
annum. The balance on this loan at June 30, 2006 was $1.1 million.

The gold call option facility was implemented to purchase gold call options from ANZ Bank. The term of the facility is 12

months from April 6, 2006 and the loan bears interest at LIBOR plus 2.1% per annum. The original drawdown in relation to this
facility was $4.0 million of which $2.0 million has been repaid. The settlement of this facility will coincide with closing out the call
options for which the facility was implemented. The balance on this loan at June 30, 2006 was $2.0 million.

The carrying amount of assets pledged as security for these facilities at June 30, 2006 was as follows:

(1) Property, plant and equipment, $96.6 million
(2) Non-current inventories, $30.2 million
(3) Cash and cash equivalents, $12.3 million
(4) Receivables, $6.1 million
(5) Current inventories, $23.9 million
(6) Current derivative instruments, $2.9 million

Cash and cash equivalents pledged as security have been classified as restricted cash and cash equivalents on the balance

sheet for fiscal 2006.

110

At June 30, 2006, the weighted average interest rate on these loans was 7.7% and the outstanding balance was $56.0 million. At

November 30, 2006, the outstanding balance was $55.9 million with an applicable interest rate of 7.7%.

Finance lease

Finance leases are effectively secured over vehicles with a carrying value of $1.7 million at June 30, 2006, as the rights of the

leased assets revert to the lessor in the event of default.

At June 30, 2006, the interest rate on this lease was 7.7% and the outstanding balance was $0.8 million. At November 30, 2006,

the outstanding balance was $0.6 million, with an applicable interest rate of 7.7%.

Compliance with Loan Covenants

We have been in compliance with all material covenants contained in the above mentioned convertible notes indenture and

loan agreements during the periods covered by our financial statements included in this Annual Report

.

Anticipated funding requirements and sources

At June 30, 2006, we had cash and cash equivalents of $67.3 million (including restricted cash), and negative working capital

(defined as current assets less current liabilities) of $46.2 million, compared to cash and cash equivalents of $36.1 million and positive
working capital of $11.6 million at June 30, 2005 and cash and cash equivalents of $22.5 million and negative working capital of
$25.0 million at June 30, 2004. At November 30, 2006, our cash and cash equivalents were $28.3 million.

As at June 30, 2006, we estimated that our anticipated commitments for fiscal 2007 would be between $140.0 million and

$145.0 million, which included capital expenditure of $54.2 million as discussed above, interest payments on and the settlement of our
convertible notes of $69.6 million, the current portion of other long-term loans of $9.2 million and working capital of approximately
$3.0 million. As at June 30, 2006, we expected to finance these commitments from cash resources of $67.3 million at that date, net
cash generated by operations and undrawn borrowing facilities of $44.3 million.

Our management believes that existing cash resources, net cash generated from operations and additional funding will be

sufficient to meet our anticipated commitments for fiscal 2007 as described above. In making this statement, management has
assumed that there will be an increase in production from our South African Operations and a decrease in production from our
Australasian Operations. Management has assumed a current gold price and exchange rate.

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;

•

we default on our borrowing arrangements, including the Investec (Mauritius) facilities or the ANZ Bank facilities, and we
are therefore required to accelerate the repayment of funds; 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.

111

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

The split of attributable gold production between the South African and Australasian operations was 315,976 ounces and

211,425 ounces, respectively.

In South Africa, Crown and ERPM continued to perform well, but Blyvoor was the focus of attention following a serious

build-up in seismicity and the intrusion of the Alpha Dyke into planned mining areas in fiscal 2006. Production is being concentrated
in other areas of the mine and the volume ramp-up to 70,000 tonnes per month will be achieved in February 2007. This is following a
production interruption at No. 6 Shaft, which required limited refurbishment. The No. 6 Shaft refurbishment was completed in
October 2006 and the shaft will be back to full production in January 2007.

The three Australasian operations encountered their worst conditions in their respective mine histories in fiscal 2006. A new

management team has been put in place to attempt to improve production, but the largest shortfall in production was at the Barrick-
managed Porgera mine in Papua New Guinea. Emperor’s share of production fell to 128,239 ounces in fiscal 2006 compared with
195,394 ounces in fiscal 2005 due to the program to mitigate the failure of the West Wall of the open pit. The Company took
operational control over Emperor’s Vatukoula mine in Fiji in July 2005 and immediately implemented an investigative strategy to
understand the value of the orebody and to combat the higher costs induced by higher fuel prices. This culminated in the ACDTP
which resulted in the temporary closure of the mine on April 13, 2006. This planned closure provided for a reduction in the workforce
and necessary repairs to Philip Shaft that would result in the concentration on higher grade mining without jeopardizing the integrity
of the orebody. The mine returned to production in June 2006 and the ramp-up to the planned levels of 10,000 ounces per month was
on track. On October 14, 2006, during the testing of the shaft conveyance, a skip-cage fell down the Philip Shaft causing damages to
the surface winder mechanism. Repairs to the damaged shaft were completed on November 14, 2006 and production resumed. 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 has been placed on a care and maintenance program.

In fiscal 2006, $41.0 million was spent on capital. A large portion of this amount was the Company’s contribution to the

West Wall refurbishment at Porgera, of $15.8 million, while the installation of new mills at Crown’s Knights Plant in South Africa
accounted for approximately $2.0 million. The remainder has been spent on ore reserve development and the upgrading of mine
infrastructure. In the forthcoming year, we had planned to invest a further US$54.2 million in capital, approximately 45% of which
would have been spent in Australasia to support the turnaround there, however pending completion of a strategic review to optimize
the value of Vatukoula and other Fijian land holdings, the planned capital expenditure will be revised.

As part of our strategic growth objective we plan to diversify our production base outside South Africa through organic

growth at existing mines and acquisitions of gold mining operations that meet our strategic criteria. As discussed in Item 3D.: “Risk
Factors” there are inherent risks involved in acquisitions. In addition, we would need to find financing for these acquisitions through
additional borrowings or equity offerings which may not be available on favorable terms, or at all. We could also seek to use our
shares as consideration for acquisitions as we have done in the past, but this will be dependent on market conditions, our share price
and our ability to satisfy listing requirements for any such share issues.

5E. OFF-BALANCE SHEET ITEMS

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.

112

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

$’000

$’000

$’000

$’000

$’000

Long-term loans (including interest)............................................

126,369

76,117

20,907

11,504

17,841

Purchase obligations – contracted capital expenditure

1

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

16,146

16,146

-

-

-

Environmental rehabilitation, reclamation and closure costs

2

...

46,777

-

1,645

8,613

36,519

Total contractual cash obligations

3

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

189,292

92,263

22,552

20,117

54,360

5G.

SAFE HARBOR

See “Special Note regarding Forward-Looking Statements.”

1

Represents planned capital expenditure for which contractual obligations exist.

2

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 18 “Provision
for environmental rehabilitation, reclamation and closure costs” to our financial statements.

3

The above contractual obligations do not include royalties payable on production. 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.

113

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, 2006, our board

consisted of six directors, while as of June 30, 2005, our board consisted of seven 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 Directors

Mark Michael Wellesley-Wood (55) Chief Executive Officer. Mr. M.M. Wellesley-Wood was appointed Non-Executive

Chairman in May 2000 and Chairman and Chief Executive Officer in November 2000. He resigned as Chief Executive Officer and was
appointed Executive Chairman on December 19, 2003. In February 2005, when Dr. Paseka Ncholo was appointed as Non-Executive
Chairman, he resumed his role as Chief Executive Officer (and has remained in this position since Geoffrey Campbell became Non-
executive Chairman in October 2005). Mr. M.M. Wellesley-Wood holds a Bachelor of Science degree in Mining Engineering from the
Royal School of Mines, Imperial College London and a Postgraduate Diploma in Business Studies from London Metropolitan University.
He is a Chartered Engineer, a Member of the Institution of Mining and Metallurgy, a former Member of the London Stock Exchange, a
Fellow of the Securities Institute and a Member of the Society of Investment Professionals. He resigned as a director of Emperor Mines
Limited on June 26, 2006. On November 2, 2006, Mr. M.M. Wellesley-Wood announced his retirement from the Company. The effective
date of Mr. M.M. Wellesley-Wood’s retirement will be December 31, 2006. Furthermore, Mr. M.M. Wellesley-Wood was appointed
Non-Executive Chairman of DRDGOLD SA with effect from January 1, 2007.

John William Cornelius Sayers (60) Chief Financial 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. Mr. J.W.C. Sayers is also a Non-
Executive Director of Emperor Mines Limited and their acting Chief Financial Officer. On December 11, 2006, Mr. J.W.C. Sayers was
appointed as Chief Executive Officer with effect from January 1, 2007.

Non-Executive Directors

Geoffrey Charles Campbell (45). 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.

Robert Peter Hume (66). Mr. R.P. Hume was appointed as a Non-Executive Director in 2001. He has forty two years' experience

in the auditing field of which the last eighteen years were spent as a partner in the East London (South Africa) office of KPMG. Since
retirement in 1999, he has spent seven 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 (62). 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.

114

James Turk (59). 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.

Senior Management - Corporate

Jacob Hendrik Dissel (48) Group Financial Manager. Mr. J.H. Dissel holds a B.Comm Honors degree and joined the Company

as Group Financial Manager in October 1999 from AngloGold, where he was financial manager responsible for financial systems. He has
23 years’ experience in the mining industry. Mr. J.H. Dissel was appointed as acting Chief Financial Officer with effect from
January 1, 2007.

Ilja David Graulich (34) Group Strategic Development Officer. Mr. I.D. Graulich, who joined the Company in February 2003 as

General Manager Investor Relations, was appointed Group Strategic Development Officer in January 2006. He is a former financial
journalist and has 7 years’ experience across a number of media sectors. He has an MBA, is a director of Net-Gold Services Limited,
G.M. Network Limited, Emperor Mines Limited and an alternate director of Rand Refinery Limited.

Themba John Gwebu (42) Company Secretary. Mr. T.J. Gwebu (B Juris, 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 his current position of Company
Secretary in April 2005.

Amanda Roxanne Hoosen (28) 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 (42) Group Strategic Manager 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 (MDP). He was appointed a director of
DRDGOLD SA in January 2006. Mr. A.N. Weir has 18 years’ experience in the mining industry.

Mark Craig Munroe (37) Chief Executive Officer DRDGOLD Capital Limited. Mr. M.C. Munroe joined the Company in 2002

and was appointed General Manager at Blyvoor in September 2004. Prior to this he was Manager New Business and Growth Projects. A
B.Comm graduate, Mr. M.C. Munroe holds a National Diploma and a National Higher Diploma in Metalliferous Mining. He obtained his
Mine Manager’s Certificate of Competency in 1999. He has 20 years’ experience in the mining industry. He was appointed Chief
Executive Officer of DRDGOLD Capital Limited in July 2006.

Senior Management - South Africa

Craig Clinton Barnes (36) Chief Financial Officer: DRDGOLD SA. 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 eight years’ financial experience. He was appointed as Chief Financial
Officer of DRDGOLD SA in July 2006. He is an alternate director of G.M. Network Limited and Net-Gold Services Limited.

Manuel Da Silva (36) General Manager: ERPM. Mr. M. Da Silva is a BSc (Mining engineering) graduate of Wits University

and obtained his Mine Manager’s Certificate in 1995. He joined the Company as Production Manager at Blyvoor in 2002 and was
appointed to his current position in August 2005. He has 14 years’ experience in the mining industry.

Henry Gouws (37) General Manager: Crown. Mr. H. Gouws graduated from Technicon Witwatersrand and obtained a National

Higher Diploma in Extraction Metallurgy in 1991. He completed an 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 18 years’ experience in the mining
industry.

Kevin Peter Kruger (38) Regional Engineering Manager and Environmental Manager: DRDGOLD SA. Mr. K.P. Kruger holds

a BSc degree in mechanical engineering from Wits University and joined the Company in 1994. Previously Engineering Manager at the
Company’s North West Operations, he was appointed to his current position in April 2005.

115

Louis Charles Lamsley (58) Chief Operating Officer: DRDGOLD SA. 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 2006. He has 33
years’ experience in the gold mining industry, 25 years of which have been spent in management.

Hurwa Ben Nyirenda (43) Head of New Business: DRDGOLD SA. 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. A graduate of the Camborne School of Mines,
England, he holds a BSc (Hons) in Mining Engineering, an MSc in Mining Engineering from the University of the Witwatersrand 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 25 years’ experience in the mining industry, in both gold and diamond sectors. He has also worked in the field
of financial management.

Daniel Johannes Pretorius (39) Chief Executive Officer: DRDGOLD SA and Group Legal Counsel. Mr. D.J. Pretorius who

holds a B.Proc, LLB degree was appointed Group Legal counsel for the Company in February 2003. He has 13 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.

Cornelius Russouw (48) General Manager: Blyvoor. 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 25 years, he has a B Tech degree in mining engineering, a
national diploma in Metalliferous Mining and a National higher diploma in Metalliferous Mining.

Wayne Swanepoel (43) Regional Human Resources Manager: DRDGOLD SA. 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 the Management Development
Program and Development Program in Labor Relations, both at the University of South Africa’s School of Business Leadership, and an
advanced diploma in Labor Law at the University of Johannesburg. He has 16 years’ experience in the mining industry.

Charles Methley Symons (52) Regional Manager Projects: Crown and ERPM. 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.

Phillip Watters (50) General Manager Projects: DRDGOLD SA. 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 30 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 Edwin Whittaker (50) Regional Geologist: DRDGOLD SA. Mr. D.E. Whittaker joined the Company in 1996 and took up

his current position in April 2005. He has a BSc Honors degree from Luton College of Higher Education, a diploma in mining
engineering from the Camborne School of Mines and a graduate diploma in engineering from Wits University. He has 24 years’
experience in the mining industry.

Senior Management - Australasia

Patrick Bindon (36) Director Corporate Communications: Emperor. Mr. P. Bindon joined Emperor in 2006 from Placer Dome’s

Port Moresby office where his role as external affairs coordinator involved managing all media relations and providing high-level
political and external affairs advice to management. He obtained a Bachelor’s degree in Applied Science in 1991.

Frazer Bourchier (40) General Manager: Vatukoula. Mr. F. Bourchier is a qualified mining engineer with Bachelor’s and

Master’s degrees in Applied Science. He has more than 16 years’ experience in the gold mining industry, most of which were spent with
the Placer Dome Group in Canada, South Africa and Papua New Guinea. Prior to his appointment as General Manager of Emperor’s
Vatukoula Gold Mine in Fiji in June 2006, he was Mining Manager and alternate General Manager at the Porgera Joint Venture in Papua
New Guinea.

Quinton Brand (33) Group Engineering Manager: Emperor. Mr. Q. Brand was appointed as Group Engineering Manager on

November 1, 2005. He joined the Company in 2002 as an engineering manager at ERPM and was transferred to Emperor in Fiji in the
same position in 2004. Prior to 2002, he worked for Impala Platinum Limited as an operations engineer. He has had 15 years’ experience
in the gold, platinum and coal mining industries.

116

Vanessa Chidrawi (35) Corporate Counsel: Emperor. Ms. V. Chidrawi has a BComm (Legal) degree from Wits University. She

was a director and profit-sharing partner in the firm WS van Vuuren Incorporated Attorneys for nearly 10 years, after which she
established her own practice. Her experience includes overseeing the firm’s High Court litigation practice, international clientele, black
economic empowerment consulting, and commercial consulting and drafting.

Bradley Gordon (44) Chief Executive Officer: Emperor. Mr. B. Gordon was appointed to the board of Emperor in April 2006.

He has more than 10 years’ experience in senior management positions in the gold industry in Australia, Papua New Guinea and Fiji. He
was most recently employed as Managing Director of Placer Dome Niugini Limited and prior to that as General Manager of Porgera.
Apart from the Porgera operation, he was also responsible for the Misima operation in the country. His experience includes many years in
Fiji, where he was employed by Emperor as operations Manager of the Vatukoula Gold Mine and General Manager of Tuvatu Gold
Mining Company Limited, a wholly owned subsidiary of Emperor. Mr. B. Gordon has a Bachelor’s degree in Engineering and an MBA.

Clyde Moore (48) Chief Financial Officer: Emperor. Mr. C. Moore was appointed a director and Chief Financial Officer of

Emperor in January 2006. He joined Emperor after working for the past eight years at the Australian and New Zealand Banking Group
Limited (ANZ), most recently as global Head of Project and Structured Financing, based in Melbourne. Prior to 2004 he was Head of
Natural Resources within ANZ’s Institutional Bank. He has 27 years’ experience in the finance industry, including senior roles in the
Americas with Dresdner Kleinwort Benson, Bank of America and Continental Illinois. He obtained a Bachelor’s degree in Economics in
1980. Emperor announced the resignation of Mr. C. Moore as Executive Director and Chief Financial Officer effective November 20,
2006. Mr. C. Moore resigned for personal reasons, but will continue to work with Emperor on selected projects in the future.
Mr. J.W.C. Sayers is the acting Chief Financial Officer of Emperor.

Malcolm Norris (47) Executive General Manager Exploration: Emperor. Mr. M. Norris joined Emperor as Executive General

Manager Exploration on September 1, 2006 from Indophil Resources, where he was General Manager Exploration and Business
Development. He previously held senior positions with WMC Resources. A member of the Australasian Institute of Mining and
Metallurgy and of the Society of Economic Geologists, he holds BSc Honours (Geology) and MSc degrees.

Bradley Sampson (40) General Manager: Papua New Guinea. Mr. B. Sampson was appointed to his current position in August

2006, with principal responsibility for Tolukuma in Papua New Guinea and for overseeing Emperor’s 20% stake in the Porgera Joint
Venture, also in Papua New Guinea. He was previously General Manger at Gold Fields Limited’s St Ives Mine in Western Australia and
Kloof operation in South Africa, and has also held positions with Anglo American, Ross Mining NL and Comalco. A member of the
Australian Institute of Company Directors and the Australian Institute of Mining and Metallurgy, he holds Bachelor of Engineering and
Master of Business Administration degrees.

John Wallace (58) General Manager Human Resources: Emperor. Mr. J. Wallace has over 20 years’ experience in the mining

industry, primarily in the South Pacific region with extended periods working in human resources at Misima, Ok Tedi and Lihir in Papua
New Guinea; Kaltim Prima Coal in Indonesia; and Gold Ridge in the Solomon Islands. He has extensive knowledge of the working
conditions and requirements in these regions.

Changes in our Board of Directors and Executive Officers

The following changes occurred in our board of directors and executive officers from July 1, 2005 to November 30, 2006.

Appointments

Title

Date

J.W.C. Sayers

1

Chief Financial Officer

September 5, 2005

G.C. Campbell

Non-Executive Chairman

October 25, 2005

Resignations

Title

Date

M.P. Ncholo

Non-Executive Chairman

October 25, 2005

I.L. Murray

Corporate Development Officer

November 30, 2005

1

Mr. J.W.C. Sayers has been appointed as Chief Executive Officer with effect from January 1, 2007 after the resignation of

Mr. M.M. Wellesley-Wood with effect from the same date.

117

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:

Director

Title

Year first
appointed

Term of

current

office

M.M. Wellesley-Wood

Chief Executive Officer

2000*

1 year

I.L. Murray

Corporate Development Officer

2000##

2 years

J.W.C. Sayers

Chief Financial Officer

2005###

2 years

M.P. Ncholo

Non-Executive Chairman

2002#

2 years

G.C. Campbell

Non-Executive Director

2002

2 years

R.P. Hume

Non-Executive Director

2001

2 years

D.J.M. Blackmur

Non-Executive Director

2003

2 years

J. Turk

Non-Executive Director

2004

2 years

* Reappointed in 2005; retired with effect from December 31, 2006
# Resigned October 25, 2005
## Resigned November 30, 2005
### Appointed Chief Executive Officer with effect from January 1, 2007

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, 2006 was R17.9 million
($2.8 million). Non-Executive Directors receive a basic fee of $30,000 per annum, subcommittee fees of $2,000 per annum for each
subcommittee of which they are a member and $4,000 per annum for each subcommittee of which they are chairperson.

The following table sets forth the compensation for our directors for the year ended June 30, 2006:

Directors

Basic

salary/fees

($'000)

End of contract

payment

($'000)

Retirement fund

contributions/

bonus/restraint

of

trade/expenses

($'000)

Total

($'000)

Share option

scheme gains

($'000)

Executive

M.M. Wellesley-Wood .....................................

566

274

725

1,565

-

I.L. Murray........................................................
JWC Sayers.......................................................

271
263

224

-

133

-

628
263

-
-

Subtotal ............................................................

1,100

498

858

2,456

-

Non-Executive

M.P. Ncholo ......................................................

19

-

34

53

-

G.C. Campbell ..................................................

80

-

39

119

-

R. Hume ............................................................

33

-

15

48

-

D.J.M. Blackmur...............................................
J Turk.................................................................

36
27

-
-

16
27

52
54

-
-

Subtotal ............................................................

195

-

131

326

-

Total

1,295

498

989

2,782

-

See also Item 6E “Share Ownership” for details of share options held by directors.

118

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 executive officers, excluding compensation paid to Executive
Directors, in fiscal 2006 was $5.4 million (fiscal 2005: $1.8 million), representing 31 executive officers in fiscal 2006 and 12
executive officers in fiscal 2005.

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. M.M. Wellesley-Wood and Mr. J.W.C. Sayers, entered into agreements of

employment with us, DRDGOLD SA and DRD (Isle of Man) on December 1, 2005 and September 5, 2005, respectively. These
agreements regulate the employment relationship with Messrs. M.M. Wellesley-Wood and J.W.C. Sayers. Separate agreements of
employment were entered into with us and DRD (Isle of Man) to reflect the proportionate distribution of time and effort which they
apply between our South African and Australasian operations. Mr. Wellesley-Wood’s DRD (Isle of Man) contract has been
transferred to DRD (Offshore) with effect from July 1, 2006.

Mr. M.M. Wellesley-Wood receives from DRDGOLD SA a consulting fee of R0.5 million ($0.1 million), and an all-

inclusive remuneration package from DRD (Offshore) of $270,000 per annum (payable in pounds sterling). He is also eligible, under
this agreement, to receive an incentive bonus of up to 50% of his annual remuneration package in respect of each of two bonus cycles
of 6 months each, over the duration of his appointment, on condition that he achieves certain agreed key performance indicators.
Mr. M.M. Wellesley-Wood’s agreements also provide that he will receive a total of up to 500,000 of our ordinary shares in two equal
tranches at intervals of 6 months over the duration of his agreements of employment. In terms of a JSE listing requirement, these
allotments were subject to approval by shareholders. We have since decided, and Mr. M.M. Wellesley-Wood has agreed, that we will
not seek the consent of our shareholders and that he will not be issued these shares. An alternate means of achieving the objective of
the retention incentive has been implemented through the payment of a bonus. Mr. M.M. Wellesley-Wood became entitled to an
amount of R1.8 million ($0.3 million) on the expiry of his previous agreement on November 30, 2005, which was equal to half his
remuneration package calculated on the basis of the remuneration package on the date of termination of employment.

Mr. J.W.C. Sayers receives from us an all-inclusive remuneration package of R2.0 million ($0.3 million) per annum.

Mr. J.W.C. Sayers is eligible under his employment agreement, for an incentive bonus of up to 50% of his annual remuneration
package in respect of each of four bonus cycles of 6 months each over the duration of his appointment, on condition that he achieves
certain key performance indicators.

Each service agreement with our directors provides for the provision of benefits to the director where the agreement is

terminated by us, or DRD (Offshore) 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.

119

Messrs. G.C. Campbell, R.P. Hume, D.J.M. Blackmur and J. Turk each have service agreements which run for fixed periods

until October 31, 2007, September 30, 2006, October 31, 2007 and October 31, 2006, 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 November 30, 2006, the board of directors comprises two Executive Directors (Messrs. M.M. Wellesley-Wood and

J.W.C. Sayers) and four Non-Executive Directors (Messrs. G.C. Campbell, D.J.M. Blackmur, R.P. Hume and J. Turk). 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), the holding company of Net-Gold Services Limited
in which we have a 50.25% interest.

In 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 now the Non-Executive Chairman, Mr. M.M. Wellesley-Wood is now the Chief Executive Officer and Mr. J.W.C.
Sayers the Chief Financial Officer. Professor D.J.M. Blackmur was appointed senior independent Non-Executive Director. In future,
the evaluation of the Chairman’s performance will be considered by the Non-Executive Directors led by the 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.

A majority of the Non-Executive Directors have share options under the Company’s share option scheme, but we do not

believe that this interferes with their independence. Since December 2004, neither the Executive Directors, nor the Non-Executive
Directors were issued new share options. See Item 6A.: “Directors, Senior Management and Employees” and Item 6E.: “Share
ownership”.

120

Board meetings are held quarterly in South Africa or internationally. 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 and Remuneration and
Nominations 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, as part of the quarterly reporting process. 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 Committees

Two Executive Committees have been established. An Executive Committee for the Australasian operations and an Executive

Committee for the South African operations. As at November 30, 2006, the Australasian Executive Committees consisted of Mr. B.
Gordon (Chairman), Mr. B. Sampson, Mr. F. Bourchier, Mr. M. Norris, and Mr. J. Wallace. The South African operations Executive
Committee consisted of Mr. D.J. Pretorius (Chairman), Mr. C.C. Barnes, Mr. J.H. Dissel, Mr. T.J. Gwebu, Mr. I.D. Graulich, Mr. N.B.
Nyirenda, Mr. K.P. Kruger, Mr. L.C. Lamsley, Mr. J.W.C. Sayers, Mr. A.N. Weir, and Mr. M.M. Wellesley-Wood.

The Executive Committees meet on a weekly basis to review current operations in detail, develop strategy and policy proposals

for consideration by the board of directors, implement its directives and consider disclosure controls and procedures. 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.

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. Currently this is in the case of each committee: chairperson $4,000 per annum;
members $2,000 per annum. 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

The Remuneration and Nominations Committee consists 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 directors and senior management.

121

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 General Manager 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 of 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.

Audit and Risk Committee

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 part of the meeting is chaired by Mr. R.P. Hume and the Risk Committee part of the meeting is chaired 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 ensures that the
Company conforms more closely with the process prescribed by the US Sarbanes-Oxley Act of 2002.

Audit Committee

As at June 30, 2006, the Audit Committee consisted of Mr. R.P. Hume (Chairman), Mr. G.C. Campbell and Professor D.J.M.

Blackmur.

The Audit Committee comprises 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.

122

Risk Committee

As at June 30, 2006, the Risk Committee consisted of Professor D.J.M Blackmur (Chairman); Mr. M.M. Wellesley-Wood and

Mr. J. Turk.

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 invited to attend Risk Committee meetings on a regular basis, such as the
Chief Financial Officer, 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.

The 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 more than
300 different mining companies 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 world-wide. 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. An insurance company, Fortis Limited, has been established to
provide workers compensation insurance to Tolukuma in Papua New Guinea.

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

2006

2005

2004

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

7,740

3,481

12,986

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

2,653

824

751

Total .........................................................................................................................................................

10,393

4,305

13,737

123

The total number of employees at June 30, 2006, of 10,393 comprises 1,397 contractors and 8,996 employees who are directly

employed by us and our wholly-owned Group companies. As of November 30, 2006, we had 10,067 employees. The increase in the
number of employees in fiscal 2006 is due to the restructuring during fiscal 2006 which incorporated Crown, ERPM (December 2005)
and Emperor (April 2006). The decrease in the number of employees in fiscal 2005 was due to the provisional liquidation of the North
West Operations which included 7,614 employees in March 2005.

As of June 30, 2006, the breakdown of our employees (excluding Porgera) by main categories of activity was as follows (2005

and 2004 excludes Porgera, Emperor, Crown and ERPM):

Year ended June 30,

Category of Activity

2006

2005

2004

Mining - Our Employees .........................................................................................................................

5,286

2,317

7,507

Mining – Contractors...............................................................................................................................

1,397

676

2,372

Engineering ..............................................................................................................................................

1,854

586

2,182

Metallurgy................................................................................................................................................

944

322

728

Mineral Resources ...................................................................................................................................

442

162

256

Administration .........................................................................................................................................

280

124

240

Environmental...........................................................................................................................................

43

36

105

Human Resources ....................................................................................................................................

65

43

204

Medical.....................................................................................................................................................

24

9

116

Safety........................................................................................................................................................

58

30

26

Total .........................................................................................................................................................

10,393

4,305

13,737

Labor Relations

As at June 30, 2006, we employed and contracted 7,740 people in South Africa, 778 in Papua New Guinea, 1,856 in Fiji and 19

in Australia. This excludes all employees from our 20% interest in the Porgera Joint Venture. Approximately 70% of South African
employees are members of trade unions or employee associations. There were no material incidents of industrial action or labor unrest at
our operations during fiscal 2006.

South Africa's labor relations environment remains a platform for social reform, while the political transitions that have taken

place in the country have reduced the impact of organized labor on political transformation. 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 / National Union of Mineworkers
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 wage agreements for 2005 to 2007 provided for wage increases of 6% for the first year and 6.5%
increase for the second year. This agreement took effect from July 1, 2005. Wage agreements were also signed with the other recognized
unions and associations.

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 the aforementioned
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.

Tolukuma in Papua New Guinea is not unionized, however, labor relations and the relationship with the surrounding

communities are maintained by way of worker consultative committees and a community forum lead by the Community Relations
Manager.

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
30% to 40%. We have several AIDS awareness campaigns in place at our operations.

124

Blyvoor has contracted AngloGold Health Services to provide all health care services, including 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 2006 overall statistics for our managed mines (including Crown, ERPM and Emperor, but excluding Porgera) are reflected
below (2005 statistics includes Crown and ERPM, but excludes Porgera and Emperor):

(Per million man hours)

Year ended June 30,

2006

2005

Lost time injury frequency rate (LTIFR)

1

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

6.32

9.55

Reportable incidence

1

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

3.52

3.44

Fatalities .................................................................................................................................................

0.23

0.25

Number of fatalities (average per month) ...............................................................................................

0.58

0.83

6E. SHARE OWNERSHIP

As of November 30, 2006, options to purchase ordinary shares held by directors were as follows:

Directors

Options at

June 30,

2005

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

Nov 30,

2006

Expiration

Dates

2

Executive

M.M. Wellesley Wood .....

1,081,622

-

-

-

-

-

1,081,622     3/26/2012-

6/17/2015

I.L. Murray

3

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

838,087

-

-

-

-

-

838,087      8/21/2010-

6/17/2015

Non-Executive

M.P. Ncholo

4

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

50,494

-

-

-

-

-

50,494      3/20/2012-

6/17/2015

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

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.”

1

Calculated as follows: Actual number of instances divided by the total number of man hours worked multiplied by one million.

2

Certain Directors hold options which expire at various times. For those directors, a range is provided indicating the earliest and latest expiration

dates.

3

Mr. I.L. Murray resigned as an Executive Director on November 30, 2005.

4

Dr. M.P. Ncholo resigned as Non-Executive Chairman on October 25, 2005.

125

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 2% of our issued share capital at that time. As at November 30, 2006, the number of issued and
exercisable share options is 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 14,575,256 ordinary shares were outstanding on June 30, 2006, of which options to purchase

9,257,847 ordinary shares were currently exercisable. In fiscal 2006, a total of 102 employees participated in the Scheme including
Executive Directors, Non-Executive Directors and other senior employees. Since December 2004, neither the Executive Directors, nor the
Non-Executive Directors were issued new share options. The outstanding options are exercisable at purchase prices that range from R3.11
to R36.08 per share and expire ten years from the date of issue to the participants.

126

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7A. MAJOR SHAREHOLDERS

As of November 30, 2006, our issued capital consisted of:

•

330,789,532 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 November 30, 2006:

•

there were 5,335 record holders of our ordinary shares in South Africa, who held approximately 35,340,761 or approximately
10.7% 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 ADS program; and

•

there were 3,252 record holders of our ADSs in the United States, who held 248,195,056 approximately or approximately 75.0%
of our ordinary shares.

The following table set forth information regarding the beneficial ownership of our ordinary shares as of November 30, 2006 by:

•

each of our directors; and

•

any person whom the directors are aware of as at November 30, 2006 who is interested directly or indirectly in 5% or more of
our ordinary shares.

Shares Beneficially Owned

Holder

Number

Percent

M. M. Wellesley-Wood ...................................................................................................................................

*

J.W.C. Sayers...................................................................................................................................................

*

J. Turk...............................................................................................................................................................

*

G.C. Campbell .................................................................................................................................................

*

R.P. Hume ........................................................................................................................................................

*

D.J.M. Blackmur..............................................................................................................................................

*

Bank of New York ADRs
101 Barclay Street
New York, NY 10011

248,195,056

75.0%

* 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 November 30, 2006, are treated as outstanding for computing the percentage of any other person. As of
November 30, 2006, we are not aware of anyone owning 5% or more of our ordinary shares other than the Bank of New York which
holds 75.0% of our issued ordinary shares through our ADR program. 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.

127

Cumulative Preference Shares

Randgold and Exploration Company Limited, or Randgold, owns 5,000,000 (100%) of our cumulative preference shares.

Randgold's address is 28 Harrison Street, 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 & Exploration Company Limited 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 2006 this amounted to $0.3 million and $0.4 million and $0.9
million for fiscal 2005 and 2004, respectively. Mr. D.J. Pretorius, CEO of DRDGOLD South Africa (Pty) Limited, is also a director of
RRL and is a member of their audit committee. Also, Mr. I.D. Graulich, our Group Strategic Officer, is an alternate director to Mr. D.J.
Pretorius. 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 4.1%. RRL is jointly owned by South African gold mining companies.

C. Press Loan

During fiscal 2003, Mr. C. Press, a director of Net-Gold Services (Pty) Limited, or Net-Gold, a consolidated subsidiary

company, loaned an amount of $24,946 to Net-Gold. This loan is interest free, unsecured and has no fixed terms of repayment. The funds
were used for short-term working capital advances. As at November 30, 2006, the full balance was still outstanding.

iProp Loan Note

On June 12, 2002, we entered into a loan agreement with Crown pursuant to which an amount of R37.7 million ($3.6 million) is

recorded as owing by Crown to us. At the time, Crown was an indirect wholly-owned subsidiary of CCGR. We sold 60% of our interest
in Crown to KBH. This amount was originally owed by Crown to iProp Limited (previously known as RMP Properties SA Limited), or
iProp, in terms of a secured loan note. In an arrangement in which JCI Gold Limited, or JCI, paid iProp R38.0 million ($3.7 million) in
exchange for an issue by us to JCI of 8,000,000 ordinary shares, the loan note was ceded to us. The loan note has now been cancelled and
restated in terms of the loan agreement entered into on June 12, 2002. The total amount outstanding on this loan as of
November 30, 2006, is R54.6 million ($7.7 million). The loan bears interest at the prime rate of The Standard Bank of South Africa
Limited. During fiscal 2006 we agreed to suspend the interest accrual with effect from November 30, 2005 indefinitely. As of June 30,
2006, the interest rate was 10.5% per annum and as of November 30, 2006, the interest rate on this loan stood at 12.0%. The loan is
repayable on demand within seven years. During fiscal 2005 we agreed to suspend our right to demand repayment indefinitely. The loan
is unsecured. In terms of the loan agreement the principal amount will be repaid in equal annual installments. As at November 30, 2006,
this balance was still owing to us, however, we have recognized an impairment against this loan and it is carried at a nil value.

128

Crown Gold Recoveries (Pty) Limited

In connection with the sale by us of 60% of our interest in Crown we agreed to lend KBH R5.3 million ($0.7 million) under a

loan agreement entered into on June 12, 2002. Prior to this, Crown was an indirect wholly-owned subsidiary of ours. The loan bears
interest at the prime rate of The Standard Bank of South Africa Limited. The loan was fully repaid in November 2005.

On June 12, 2002, we entered into two loan agreements with Crown, the first being for R0.9 million ($0.09 million) and the

second being for R37.7 million ($3.6 million). The first loan is payable on demand within three years from such a demand having been
made and interest is payable annually in arrears and the second loan is payable on demand within seven years from such a demand having
been made and interest is payable annually in arrears. During fiscal 2005 we reached an agreement with Crown that we would suspend
our right to demand repayment of this balance indefinitely, due to the loss making position of Crown. The total amount outstanding on
these loans, as at October 31, 2006, is R55.1 million ($7.4 million), however, we have recognized an impairment against this loan and it is
carried at a nil value. During fiscal 2006 we agreed to suspend the interest accrual with effect from November 30, 2005 indefinitely.

On June 12, 2002, we entered into a shareholders' agreement with KBH, the Industrial Development Corporation, or IDC,

CCGR and Crown. This shareholder agreement documents three previously interest free loans from CCGR to Crown totaling
R190.0 million ($30.3 million). Under the terms of the share purchase agreement, 57% (R108.0 million ($17.2 million)) of the principal
amount of these loans were sold to IDC and 3% (R5.7 million ($0.9 million)) to KBH. However, upon KBH exercising its option to
purchase IDC's interest in Crown, IDC's portion of this loan was ceded to KBH. These balances are still outstanding as at
November 30, 2006, however, we have recognized an impairment against this loan and it is carried at a nil value. During fiscal 2006 we
agreed to suspend the interest accrual with effect from November 30, 2005 indefinitely.

On July 20, 2005, we acquired from IDC all the remaining balances owing by Crown and ERPM through the issue of 4,451,219

of our shares, representing a cost of R28.9 million ($4.3 million). These balances are still outstanding as at November 30, 2006.

These loans currently bear interest at the prime rate charged by The Standard Bank of South Africa Limited on overdraft which

as of November 30, 2006, stood at 12.0%. It is the intention of the parties to amend the terms of the shareholders' loans. During fiscal
2006 we agreed to suspend the interest accrual with effect from November 30, 2005 indefinitely.

Dr. M.P. Ncholo, previously one of our non-executive directors, is also the chairman of KBH. The 4,794,889 shares originally

issued to KBH were subject to a put and call option instrument between KBH and Investec, with the shares held as security. The option
was exercised and Investec took possession of the shares in three equal tranches in June, July and August 2004.

East Rand Proprietary Mines Limited

On October 10, 2002, Daun et Cie AG, Courthiel Holdings (Pty) Limited, KBH, Claas Edmond Daun, Paul Cornelis Thomas

Schouten, Moltin Paseka Ncholo, Masechaba Palesa Moletsane Ncholo, Michelle Patience Baird, Derek Sean Webbstock, or collectively
the Sellers, and Crown, entered into an agreement pursuant to which Crown agreed to purchase from the Sellers the entire issued share
capital and shareholders' claims of ERPM. At the time Dr. M.P. Ncholo was one of our non-executive directors and we owned a 40%
interest in Crown. The purchase price for the acquisition of the entire issued share capital and the value of shareholders’ claims was
R100.0 million ($9.5 million). Crown loaned an amount of R60.0 million ($5.7 million) to the Sellers as an interest free loan, and Crown
received from the Sellers, as security for the loan, a pledge of the entire issued share capital of ERPM and a cession of the Sellers' claims
to Crown. The conditions of the sale were fulfilled and the amount was deemed to be paid to the Sellers on account of the purchase price.
An existing mortgage bond registered by ERPM in favor of Courthiel Holdings (Pty) Limited securing shareholder loans in the sum of
R10.0 million ($1.9 million) was also ceded to Crown as security on October 11, 2002. The full amount is still owing under the bond.

The South African competition authorities' approval for the acquisition of ERPM by Crown was obtained and the R60.0 million

($5.7 million) loan was deemed to be part payment of the purchase price. As to the balance of the purchase price of R40.0 million
($3.8 million), KBH, a 60% shareholder in Crown, agreed to use its best endeavors to obtain a loan of R40.0 million ($3.8 million) from
IDC which was paid to the Sellers as final part payment of the purchase price of the ERPM acquisition. Crown procured the release of the
Sellers from all statutory environmental obligations, including obligations to furnish guarantees and similar instruments to the DME and
ERPM assumed the Sellers' responsibilities in this regard. Crown acquired ERPM, without indemnification for any disclosed or
undisclosed liabilities, which could require Crown to incur significant financial obligations to satisfy any liability.

On January 1, 2003 and April 7, 2003, we advanced to Crown R9.8 million ($1.6 million) and R2.1 million ($0.3 million),

respectively, on the same terms. These amounts relate to ERPM acquisition costs and working capital requirements respectively. During
fiscal 2006 we agreed to suspend the interest accrual with effect from November 30, 2005 indefinitely.

129

Additionally, on September 18, 2002, in connection with Crown's acquisition of ERPM, we provided a working capital facility

of R10.0 million ($1.6 million) to ERPM. The loan bears interest at the prime rate charged by The Standard Bank of South Africa Limited
on overdraft and as of October 31, 2006, the interest rate on the loan stood at 12.0%. The loan is secured by a pledge of certain movable
assets of ERPM. During fiscal 2006 we agreed to suspend the interest accrual with effect from November 30, 2005 indefinitely.

Furthermore, from July 1, 2003 to April 30, 2004, funds were advanced to ERPM by way of a capital expansion loan of R32.2

million ($5.1 million) and on September 1, 2003, by way of debentures of R16.0 million ($2.6 million). These funds were utilized to fund
infrastructure upgrades and the purchase of mining equipment. The loan facility is repayable in equal installments over the 5 years, and
bears interest at prime less 0.5%. The debentures are repayable in 78 months from issue date and bear interest at prime (rate charged by
The Standard Bank of South Africa Limited) less 2.5%. In addition the debentures receive a royalty of 0.267% of the gross revenue
received from net smelter revenue. During fiscal 2006 we agreed to suspend the interest accrual with effect from November 30, 2005
indefinitely.

As a result of the low Rand gold price in fiscal 2004, coupled with a number of unforeseen operational setbacks, the structured

capital expansion and underground resource development plan at ERPM was abandoned. All project finance loans advanced to Crown
and ERPM, and described above, totaling $8.8 million were included in investment in our associate in fiscals 2004, and 2005 against
which losses recorded by the associate, were recognized against these advances in fiscals 2004 and 2005. In fiscal 2006, Crown and
ERPM were consolidated from December 1, 2005 and no further advances were made. No repayment has been received on either the loan
or the debentures and management has agreed to suspend repayments indefinitely.

Management Service Agreements

We provide management services for DRDGOLD SA, Blyvoor, Crown, ERPM and DRD (Isle of Man) 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 an 85% 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 exclusively by us. Our management fee for services

performed for fiscal 2006 at Blyvoor was R10.3 million ($1.6 million), Crown R10.3 million ($1.6 million) and ERPM R10.3 million
($1.6 million). Management fees recovered from DRD (Isle of Man) for fiscal 2006 were R30.9 million ($4.8 million). We are currently
in the process of revising all management service agreements with subsidiaries.

Assistance with regards to funeral expenses

During fiscal 2004, financial assistance was provided by ERPM, to the family of Dr. M.P. Ncholo, at the time a non-

executive director of our Company, and executive director of KBH, with regards to funeral expenses relating to the death of a family
member who was a temporary employee of ERPM. In terms of ERPM’s practice, the funds were advanced on compassionate grounds
to assist the family with costs associated with the funeral. This amounted to R90,447 ($12,441). During fiscal 2006 the amount was
written off.

Black Economic Empowerment transaction with Khumo Bathong Holdings (Pty) Limited

On July 6, 2005, we signed a Memorandum of Understanding with KBH, regarding the acquisition by KBH of a 15% stake in

the Company’s South African operations.

The transaction comprised the exchange of 75% of KBH’s 60% stake in Crown, including its wholly-owned subsidiary ERPM,

for a 15% indirect interest in our wholly-owned subsidiary, Blyvoor. This would result in KBH’s ownership of 15% of the total of our
South African operations.

On October 27, 2005, our board of directors approved the extension of our existing black economic empowerment structure with

KBH to cover all of our South African assets. The new structure resulted in Khumo Gold acquiring, as a first step, a 15% interest in a
newly created vehicle, DRDGOLD SA, which holds a 100% interest in ERPM, Crown and Blyvoor. We retained an 85% interest in
DRDGOLD SA.

130

On November 18, 2005, we subscribed for $4.8 million (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 $1.2 million (R7.9 million) and subscribe for $0.6
million (R4.1 million) new preference shares in ERPM, $0.4 million (R2.7 million) new preference shares in Crown, $0.6 million (R3.9
million) new preference shares in Blyvoor and an initial 15% of the issued ordinary shares in DRDGOLD SA for $2.0 million (R13.2
million). In accordance with the terms of the MOU, Khumo Gold has been granted an option, exercisable over three years, to acquire a
further 11% interest in DRDGOLD SA for the payment consideration of $1.4 million (R9.3 million). This further equity tranche will
include a 6% stake to be placed in a new, Employee Trust.

On December 11, 2006, Khumo Gold exercised the option granted by us pursuant to the option agreement concluded between

the parties in October 2005. Khumo Gold acquired from us a further 50,000 ordinary shares in DRDGOLD SA for $0.6 million
(R4.3 million). After exercising the option, Khumo Gold's shareholding in DRDGOLD SA increased by 5% 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 $0.7 million (R5.1 million). After exercising the option, the trust's shareholding in
DRDGOLD SA is 6%. We will finance the transaction, on condition that the terms of the finance are determined by independent
experts to be fair and reasonable to our shareholders. It is proposed that we will subscribe for preference shares in Khumo Gold and
extend a loan to the trustees of the trust.

Financing and operating assistance package for Emperor Mines Limited

In August 2005, we initiated a financing and operating assistance package to Emperor. This follows a complete review of

Emperor’s operations.

To assist Emperor with its restructuring plan, we have provided a A$10.0 million ($7.6 million) Convertible Loan Facility to

Emperor as part of a re-financing package, which included an agreement with ANZ Bank to restructure Emperor’s existing debt servicing
obligations.

ANZ Bank has given its consent to our granting of the Convertible Loan Facility and the related security. Further the Australian

Stock Exchange has also granted a waiver of listing rules to permit Emperor to grant such security to us on the terms incorporated in the
Convertible Loan Facility.

The Convertible Loan Facility is repayable upon receiving the proceeds expected from the sale of Emperor’s interest in the

Tuvatu Gold Prospect, or by December 31, 2007 whichever is earlier. Emperor had previously announced a conditional sale agreement in
relation to the Tuvatu Gold Prospect and expected to receive consideration of approximately A$10.0 million ($7.6 million) on completion
of that transaction. On January 25, 2006, Emperor announced that it has not granted a further extension for the sale of the Tuvatu Gold
Prospect and the agreement was terminated.

The Convertible Loan Facility is convertible, at our election, into ordinary fully paid shares of Emperor at a conversion price

equal to the lower of A$0.30 per Emperor share or the 45 day volume weighted average price of Emperor shares on the Australian Stock
Exchange prior to the date of conversion.

On August 29, 2005, the shareholders of Emperor approved the Convertible Loan Facility. We did not participate in the voting.

Sale and purchase agreement with Emperor

On November 16, 2005, we concluded a sale and purchase agreement with Emperor, who held a 100% stake in the Vatukoula

mine in Fiji, pursuant to which, on April 6, 2006, Emperor acquired our wholly owned subsidiary, DRD (Isle of Man), which in turn
holds our PNG assets, comprising of 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 was settled by the issue of 751,879,699
new Emperor shares at $0.266 per share (valued at $200.0 million) to DRD (Offshore), a cash consideration of $32.3 million and a short
term loan provided by DRD (Offshore) to the value of $5.0 million. The loan is repayable in two installments to DRD (Offshore) on
March 30, 2007 and June 30, 2007. The loan attracts interest at LIBOR plus 2% per annum and has been entered into on market
related terms. Subsequent to June 30, 2006, the board of DRD (Offshore) has agreed to convert this loan to equity. 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 addition to these loan facilities in October 2006, we committed to a $10.0 million working capital facility for Emperor. We

advanced funds to Emperor under this facility of $2.0 million on October 5, 2006, $5.0 million on November 6, 2006 and $3.0 million
on November 27, 2006. The loan bears interest at LIBOR plus 3% per annum and is repayable on December 31, 2007.

131

Employment agreements with executive directors

Mr. M.M. Wellesley-Wood receives from DRDGOLD SA a consulting fee of R0.5 million ($0.1 million), and an all-

inclusive remuneration package, or remuneration agreement, from DRD Isle of Man of $270,000 per annum (payable in pounds
sterling). He is also eligible, under the remuneration agreement, to receive an incentive bonus of up to 50% of his annual remuneration
package in respect of each of two bonus cycles of 6 months each, over the duration of his appointment, on condition that he achieves
certain agreed key performance indicators. Mr. M.M. Wellesley-Wood’s agreements also provide that he will receive a total of up to
500,000 of our ordinary shares in two equal tranches at intervals of 6 months over the duration of his agreements of employment. In
terms of a JSE listing requirement, these allotments were subject to approval by shareholders. We have since decided, and
Mr. M.M. Wellesley-Wood has agreed, that we will not seek the consent of our shareholders and that he will not be issued these
shares. An alternate means of achieving the objective of the retention incentive has been implemented through the payment of a bonus.
This agreement has been assigned to DRD Offshore with effect from July 1, 2006. Mr. M.M. Wellesley-Wood became entitled to an
amount of R1.8 million ($0.3 million) on the expiry of his previous agreement on November 30, 2005 which was equal to half his
remuneration package calculated on the basis of the remuneration package on the date of termination of employment. This amount
was paid in fiscal 2006. On November 2, 2006, Mr. M.M. Wellesley-Wood has announced his retirement from DRDGOLD. The
effective date of Mr. M.M. Wellesley-Wood’s retirement will be December 31, 2006.

Mr. J.W.C. Sayers receives from us an all-inclusive remuneration package of R2.0 million ($0.3 million) per annum.

Mr. J.W.C. Sayers is eligible under his employment agreement, for an incentive bonus of up to 50% of his annual remuneration
package in respect of each of four bonus cycles of 6 months each over the duration of his appointment, on condition that he achieves
certain key performance indicators.

On June 26, 2006, the Emperor board approved a loan of A$0.4 million ($0.3 million) to Mr. B. Gordon, the Chief Executive

Officer of Emperor, to acquire 1,000,000 shares in Emperor. The approval of the loan was subject to approval by shareholders at
Emperor’s Special General Meeting held in August 2006. The loan was approved by shareholders at this Special General Meeting. The
loan is repayable over 5 years, with 25% of any gross bonus paid to Mr. B. Gordon being directed as a loan repayment until such time
as the loan is repaid in full. The loan was entered into on an arm’s-length basis and on market related terms and bears interest at the ANZ
Bank’s published bank bill rate plus 1% per annum.

Corporate advisory services

On November 13, 2006, DRDGOLD SA approved a corporate advisory service agreement with Bonami Fraser (Pty) Limited,

of which Mr. P.W. Judge is a director. Mr. P.W. Judge through the Richmond Trust has an indirect shareholding of 18.25% in Khumo
Gold, which owns 20% of DRDGOLD SA. The agreement provides for a monthly retainer of R85,000 ($11,692), a success fee
payable on the successful completion of the Topstar Dump transaction of R275,000 ($37,826) and a success fee payable upon signing
of the 11% Khumo Gold option agreement of R475,000 ($65,336).

7C.

INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

132

ITEM 8. FINANCIAL INFORMATION

8A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

1.     Please refer to Item 18.: "Financial Statements."

2.     Please refer to Item 18.: "Financial Statements."

3.     Please refer to Item 18.: "Financial Statements."

4.     The last year of audited financial statements is not older than 15 months.

5.     Not applicable.

6.     Not applicable.

7.     See under Item 4D.: "Property, plants and equipment—Legal Proceedings."

8.     Please see Item 10B.: "Memorandum and Articles of Association."

8B.

SIGNIFICANT CHANGES

For a discussion of significant changes that have occurred since June 30, 2006, the date of the last audited financial statements

included in this Annual report, please see Note 27 “Subsequent Events” under Item 18.: "Financial Statements," which describes post
balance sheet events.

133

ITEM 9. THE OFFER AND LISTING

9A. OFFER AND LISTING DETAILS

The following tables set forth, for the periods indicated, the high and low market sales prices and average daily trading volumes

of our ordinary shares on the JSE and ADSs on the Nasdaq Capital Market (formerly Nasdaq SmallCap Market).

Price Per

Ordinary Share

R

Price Per

ADS

$

Average Daily

Trading

Volume

Year Ended

High

Low

High

Low

Ordinary

Share

ADSs

June 30, 2002 .........................................................................................

55.00

6.50

5.59

0.79

246,934

2,085,179

June 30, 2003 .........................................................................................

49.20

15.60

4.72

2.11

245,634

2,809,445

June 30, 2004 .........................................................................................

27.75

15.00

4.10

2.20

118,454

4,084,794

June 30, 2005 .........................................................................................

15.80

4.15

2.66

0.30

136,947

2,440,765

June 30, 2006 .........................................................................................

12.10

5.60

2.02

0.85

431,319

3,700,024

Price Per

Ordinary Share

R

Price Per

ADS

$

Average Daily

Trading

Volume

Quarter

High

Low

High

Low

Ordinary

Share

ADSs

Q1 July – September 2004.....................................................................

15.80

10.30

2.64

1.63

200,498

2,850,962

Q2 October – December 2004...............................................................

14.76

8.00

2.25

1.44

167,305

3,348,309

Q3 January – March 2005 .....................................................................

9.10

4.50

1.57

0.78

265,678

3,966,378

Q4 April – June 2005.............................................................................

8.09

4.15

1.18

0.30

118,670

2,238,541

Q1 July – September 2005.....................................................................

10.25

5.60

1.66

0.85

190,510

2,518,369

Q2 October – December 2005...............................................................

10.80

7.00

1.55

1.21

395,803

3,098,341

Q3 January – March 2006 .....................................................................

12.10

7.80

2.02

1.24

674,570

4,310,914

Q4 April – June 2006.............................................................................

11.70

7.71

1.98

1.11

471,111

4,900,925

Q1 July – September 2006.....................................................................

11.50

8.82

1.63

1.25

504,267

2,329,311

Price Per

Ordinary Share

R

Price Per ADS

$

Average Daily

Trading Volume

Month Ended

High

Low

High

Low

Ordinary

Share

ADSs

May 31, 2006 .........................................................................................

11.70

8.70

1.98

1.48

641,977

7,123,018

June 30, 2006 .........................................................................................

10.80

7.71

1.62

1.11

312,371

3,069,153

July 31, 2006..........................................................................................

11.50

9.00

1.57

1.25

484,448

2,481,562

August 31, 2006.....................................................................................

10.19

8.82

1.48

1.26

379,153

1,914,723

September 30, 2006 ...............................................................................

10.46

10.02

1.42

1.34

666,453

2,653,836

October 31, 2006....................................................................................

10.85

9.40

1.42

1.19

481,049

1,979,598

November 30, 2006................................................................................

10.08

8.20

1.38

1.07

642,555

3,116,185

The cumulative preference shares are not traded on any exchange.

There have been no significant trading suspensions with respect to our ordinary shares on the JSE during the past three years

ended June 30, 2006, nor have there been any significant trading suspensions with respect to our ADRs on the Nasdaq Capital Market
since our listing on that market.

134

9B. PLAN OF DISTRIBUTION

Not applicable.

9C. MARKETS

Nature of Trading Markets

The principal trading market for our equity securities is the JSE and our ADSs that trade on the Nasdaq Capital Market (formerly

Nasdaq SmallCap Market) in the form of ADRs under the symbol “DROOY.” Our ordinary shares trade on the JSE under the symbol
“DUR.” Our ordinary shares also trade on the LSE (symbol: DBNR), the Marche Libre on the Paris Bourse (symbol: DUR) and Brussels
Bourse (symbol: DUR) in the form of International Depository Receipts. The ordinary shares also trade on the over the counter markets in
Berlin, Stuttgart and the Regulated Unofficial Market on the Frankfurt Stock Exchange. The ADRs are issued by The Bank of New York,
as depositary. Each ADR represents one ADS. Each ADS represents one of our ordinary shares. Prior to February 2001, our ADSs traded
on the Nasdaq National Market.

In Australasia, our interests in the Porgera and Tolukuma mines were transferred into Emperor in a reverse acquisition and

Emperor was consolidated from April 6, 2006 (see Item 4A.: “Property, Plant and Equipment” for a description of our significant
subsidiaries, properties and mining operations). Effective July 28, 2006, as a consequence of the transfer of our assets into Emperor,
which was already listed on the Australian Stock Exchange, or ASX, we delisted from the ASX. We also delisted from the Port Moresby
Stock Exchange on July 28, 2006.

Nasdaq Exemption

Exemption from the shareholder approval requirements

Between August and December 2003, the Company entered into a series of discounted issuances with several different

investors resulting in the issuance of ordinary shares, and securities convertible into ordinary shares, totaling 46,843,902, or 25.43% of
the total shares outstanding on a pre-issuance basis. Included within those issuances, on December 12, 2003, the Company entered
into an agreement granting Investec the option to acquire 10.2 million ordinary shares. The Company requested an exemption from
Nasdaq Marketplace Rule 4350(i)(1)(D) in reliance upon Nasdaq Marketplace Rule 4350(a). Rule 4350(i)(1)(D) provides that
shareholder approval is required upon issuing 20% or more of the common stock or 20% or more of the voting power outstanding
before the issuance for less than the greater of book or market value of the stock. Nasdaq granted this exemption on the basis that the
shareholder approval requirements of Rule 4350(i)(1)(D) are contrary to generally accepted business practices of companies located in
South Africa.

The South African Companies Act of 1973 (as amended) requires issuers to obtain shareholder approval before the issuance

of any shares or rights to shares, which approval can be provided by specific authority or a general authority granted by means of a
resolution passed by shareholders in a general meeting. JSE Listing Requirements require 75% shareholder approval for any issuance
of shares for cash. JSE Listing Requirements do, however, permit an issuer to issue shares for cash under a general authority granted
by its shareholders, but not in excess of 15% of the company’s total issued share capital during any financial year under that authority,
or the general authority. In terms of the specific issuances for which the Company received the exemption from Nasdaq described
above, there was no JSE requirement that would mandate specific shareholder approval for these transactions. The JSE Listing
Requirements accept a general authority by our shareholders under certain circumstances. The shareholders had approved a general
authority which covered the relevant transactions by resolutions passed at the Company's annual general meetings in November 2003.
In addition, included in the shares issued for cash were approximately 24.4 million shares to the value of R435.5 million
($63.1 million) which were used for the acquisition of the Porgera Joint Venture. Approval was obtained from the JSE to deem these
shares to be a vendor placing.

Exemption from the quorum requirements

Nasdaq’s Marketplace Rules, which apply to all companies listed on the Nasdaq Stock Market and Nasdaq Capital Market, state

in Rule 4350(f) that the minimum quorum for any meeting of holders of the company’s common stock must be no less than 33 1/3 % of
the issuer’s outstanding shares. Consistent with the practice of companies incorporated in South Africa, our articles of association only
require a quorum of three members. As a result, and in connection with the listing of our ADSs on the Nasdaq National Market in July
1996, we requested, and Nasdaq granted us in October 1996, an exemption from compliance with the Rule 4350(f) quorum requirement.

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9D. SELLING SHAREHOLDERS

Not applicable.

9E. DILUTION

Not applicable.

9F. EXPENSES OF THE ISSUE

Not applicable.

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ITEM 10. ADDITIONAL INFORMATION

10A. SHARE CAPITAL

Not applicable.

10B. MEMORANDUM AND ARTICLES OF ASSOCIATION

Description of Our Memorandum and Articles of Association and Ordinary Shares

On June 30, 2006, we had 600,000,000 ordinary shares, no par value, and 5,000,000 cumulative preference shares, R0.10 par

value, authorized for issuance. On that date, we had issued 320,035,078 ordinary shares and 5,000,000 cumulative preference shares.

On November 30, 2006, we had 600,000,000 ordinary shares, no par value, and 5,000,000 cumulative preference shares, R0.10

par value, authorized for issuance. On that date, we had issued 330,789,532 ordinary shares and 5,000,000 cumulative preference shares.

Set out below are brief summaries of certain provisions of our Articles of Association, or our Articles, the South African

Companies Act, 1973 (as amended), or the Companies Act, and the requirements of the JSE, all as in effect on November 30, 2006. The
summary does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the Articles, the
Companies Act, and the requirements of the JSE.

We are registered under the Companies Act under registration number 1895/000926/06. As set forth in Section 4-Objects of our

Memorandum of Association, our purpose is to explore and exploit mineral rights and establish and own mining enterprises.

Borrowing Powers

Our directors may, at their discretion, raise or borrow or secure the payment of any sum or sums of money for our use as they

see fit. For so long as we are a listed company, the directors shall so restrict our borrowings and exercise all voting and other rights or
powers of control exercisable by us in relation to our subsidiary companies so that the aggregate principal amount outstanding in respect
of us and any of our subsidiary companies, as the case may be, exclusive of inter-company borrowings, shall not, except with the consent
of our shareholders at a general meeting, exceed R30.0 million or the aggregate from time to time of our issued and paid up capital,
together with the aggregate of the amounts standing to the credit of all distributable and non-distributable reserves, any of our share
premium accounts and our subsidiaries' share premium accounts certified by our auditors and which form part of our and our subsidiaries'
financial statements, whichever is higher.

Share Ownership Requirements

Our directors are not required to hold any shares to qualify or be appointed as a director.

Voting by Directors

A director may authorize any other director to vote for him at any meeting at which neither he nor his alternate director

appointed by him is present. Any director so authorized shall, in addition to his own vote, have a vote for each director by whom he is
authorized.

The quorum necessary for the transaction of the business of the directors may be fixed by the directors and unless so fixed shall

be not less than two.

Directors are required to notify our board of directors of interests in companies and contracts. If a director's interest is under

discussion, depending on the nature of the interest, he shall not be allowed to vote and shall not be counted, for the purpose of any
resolution regarding his interest, in the quorum present at the meeting.

The Code of Corporate Practices and Conduct of the King II Report on Corporate Governance for South Africa, 2002, sets out

guidelines to promote the highest standards of corporate governance among South African companies. The board of directors believes
that our business should be conducted according to the highest legal and ethical standards. In accordance with the board practice, all
remuneration of directors is approved by the Remuneration and Nominations Committee.

Under South African common law, directors are required to comply with certain fiduciary duties to the company and to exercise

proper care and skill in discharging their responsibilities.

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Age Restrictions

There is no age limit for directors.

Election of Directors

Directors may be appointed at a general meeting from time to time. The directors may appoint any eligible person as a director

but he shall only hold office until the next annual general meeting when the relevant director shall be eligible for election. One third of
our directors, on a rotating basis, are subject to re-election at each annual general shareholder’s meeting. Retiring directors usually make
themselves available for re-election.

General Meetings

On the request of 100 shareholders or shareholders holding not less than one-twentieth of our share capital which carries the

right of voting at general meetings, we shall within 14 days of the lodging of a request by such shareholders issue a notice to shareholders
convening a general meeting for a date not less than 21 days and not more than 35 days from the date of the notice. Directors may
convene general meetings at any time.

Our annual general meeting and a meeting of our shareholders for the purpose of passing a special resolution may be called by

giving 21 days advance written notice of that meeting. For any other general meeting of our shareholders, 14 days advance written notice
is required.

Our Articles provide that if at a meeting convened upon request by our shareholders a quorum is not present within one half hour

after the time selected for the meeting, such meeting shall be dissolved. The necessary quorum is three members present in person or
represented by proxy.

Voting Rights

The holders of our ordinary shares are generally entitled to vote at general meetings and on a show of hands have one vote per

person and on a poll have one for every share held. The holders of our cumulative preference shares are not entitled to vote at a general
meeting unless any preference dividend is in arrears for more than six months at the date on which the notice convening the general
meeting is posted to the shareholders. However, they will obtain voting rights once the Argonaut Project becomes an operational gold
mine. Additionally, holders of cumulative preference shares may vote on resolutions which adversely affect their interests and on
resolutions regarding the disposal of all or substantially all of our assets or mineral rights. When entitled to vote, holders of our
cumulative preference shares are entitled to one vote per person on a show of hands and that portion of the total votes which the aggregate
amount of the nominal value of the shares held by the relevant shareholder bears to the aggregate amount of the nominal value of all
shares issued by us.

Dividends

We may, in a general meeting, or our directors may, from time to time, declare a dividend to be paid to the shareholders in

proportion to the number of shares they each hold. No dividend shall be declared except out of our profits. Dividends may be declared
either free or subject to the deduction of income tax or duty in respect of which we may be charged. Holders of ordinary shares are
entitled to receive dividends as and when declared by the directors. Holders of cumulative preference shares are entitled to receive
cumulative preferential dividends in priority to the holders of our ordinary shares equal to the prescribed portion of 3% of our future
revenue generated by the exploitation or other application of the mineral rights represented by the Argonaut Project. 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. All unclaimed dividends are forfeited back to us after a
period of twelve years.

Ownership Limitations

There are no limitations imposed by our Articles or South African law on the rights of shareholders to hold or vote on our

ordinary shares or securities convertible into our ordinary shares.

138

Winding-up

If we are wound-up, then the assets remaining after payment of all of our debts and liabilities, including the costs of liquidation,

shall be applied to repay to the shareholders the amount paid up on our issued capital and thereafter the balance shall be distributed to the
shareholders in proportion to their respective shareholdings. On a winding up, our cumulative preference shares rank, in regard to all
arrears of preference dividends, prior to the holders of ordinary shares. As of November 30, 2006, no such dividends have been declared.
Except for the preference dividend and as described in this paragraph our cumulative preference shares are not entitled to any other
participation in the distribution of our surplus assets on winding-up.

Reduction of Capital

We may, by special resolution, reduce the share capital authorized by our Memorandum of Association, or reduce our issued

share capital including, without limitation, any stated capital, capital redemption reserve fund and share premium account by making
distributions and buying back our shares.

Amendment of the Articles of Association

Our Articles may only be altered by the passing of a special resolution. A special resolution is passed when the shareholders

holding at least 25% of the total votes of all the members entitled to vote are present or represented by proxy at a meeting and, if the
resolution was passed on a show of hands, at least 75% of those shareholders voted in favor of the resolution and, if a poll was demanded,
at least 75% of the total votes to which those shareholders are entitled were cast in favor of the resolution.

Consent of the Holders of Cumulative Preference Shares

The rights and conditions attaching to the cumulative preference shares may not be cancelled, varied or added, nor may we issue

shares ranking, regarding rights to dividends or on winding up, in priority to or equal with our cumulative preference shares, or dispose of
all or part of the Argonaut mineral rights without the consent in writing of the registered holders of our cumulative preference shares or
the prior sanction of a resolution passed at a separate class meeting of the holders of our cumulative preference shares.

Distributions

Under an amendment to the Articles on October 21, 2002, we are authorized to make payments in cash or in specie to our

shareholders in accordance with the provisions of the Companies Act and other consents required by law from time to time. We may, for
example, in a general meeting, upon recommendation of our directors, resolve that any surplus funds representing capital profits arising
from the sale of any capital assets and not required for the payment of any fixed preferential dividend, be distributed among our ordinary
shareholders. However, no such profit shall be distributed unless we have sufficient other assets to satisfy our liabilities and to cover our
paid up share capital.

10C. MATERIAL CONTRACTS

Facility B Loan Agreement between Investec Bank (Mauritius) Limited and DRD (Isle of Man) Limited, dated March 3, 2005.

This agreement made available to DRD (Isle of Man) an acquisition loan facility for a maximum of $35.0 million (R207.0

million). Subsequent to June 30, 2005, this facility was drawn down in the amount of $19.0 million. The agreement provides for the
repayment of the loan under the loan facility with our ordinary shares. In this regard, we allotted and issued 13,686,030 of our ordinary
shares, to the value of $19.3 million to Investec Bank (Mauritius) Limited to repay the drawn down amount.

Underwriting Agreement between DRDGOLD Limited, the Baker Steel Capital Managers LLP, or BSCM, and certain underwriters,
dated April 5, 2005.

Under this agreement the underwriters agreed to subscribe for the offer of an aggregate of 15,804,116 ordinary no par value

shares at a subscription price of $0.84 (R5.50) per share on the basis that the shares will be provisionally allotted to them, but that we will
also offer the same shares to our existing shareholders in proportion to their shareholdings in terms of a claw-back offer, together with the
right to renounce this offer in favor of third parties, and that the number of shares not allotted and issued pursuant to the claw-back offer
will finally be allotted and issued to the underwriters. A commission of 6% was payable to each underwriter in proportion to the extent of
shares subscribed to. We raised $13.3 million (R86.9 million) from the claw-back offer.

139

Subscription Agreement between DRDGOLD Limited and Baker Steel Capital Managers LLP, or BSCM, dated April 7, 2005.

Under this agreement BSCM acted as an agent on behalf of certain clients. Each BSCM client subscribed to a certain number of

our ordinary shares which added up to an aggregate of 17,000,000 shares at a premium of $0.82 (R5.00) per share and BSCM paid the
sum of $14.4 million (R93.5 million) being the subscription price due for the shares.

Memorandum of Understanding between DRDGOLD Limited and Khumo Bathong Holdings (Pty) Limited, dated July 6, 2005.

Under this Memorandum of Understanding the parties agreed that ERPM, Crown and Blyvoor will be consolidated under one

subsidiary, namely DRDGOLD SA. Furthermore Khumo Gold will subscribe for an initial 15% stake in DRDGOLD SA and
subsequently a KBH-led broad based black economic empowerment consortium will subscribe for a further 11% in DRDGOLD SA.

Convertible Loan Facility Agreement between DRDGOLD Limited and Emperor Mines Limited, dated July 8, 2005.

Under this agreement we agreed to provide a $7.6 million (A$10.0 million) convertible loan facility for financial and operational

assistance to Emperor. The term of this facility will be 2.5 years with a fixed interest of 9% per annum. The facility is secured by a first
ranking charge over Emperor’s 100% interest in the Tuvatu Gold Prospect in Fiji. The facility is repayable upon either the receipt of
proceeds expected from the sale of Emperor’s interest in the Tuvatu Gold Prospect or by December 31, 2007. This facility is also
convertible at our election into ordinary fully paid shares of Emperor. On January 25, 2006, Emperor announced that it has not granted a
further extension for the sale of the Tuvatu Gold Prospect and the agreement was terminated.

Cession Agreement entered into among The Industrial Development Corporation of South Africa Limited, or IDC, DRDGOLD
Limited, Business Ventures Investment No. 750 (Pty) Limited and Business Ventures Investment No. 751 (Pty) Limited, or the BVI
Companies, dated July 13, 2005.

Under this agreement IDC sold its claims against Crown, ERPM and the BVI Companies and the debentures it subscribed for in

ERPM to us in return for the payment of the purchase price of 4,451,219 of our ordinary shares to the value of approximately $4.3 million
(R29.0 million), which have already been allotted and issued to the IDC.

Share Sale Agreement entered into among The Industrial Development Corporation of South Africa Limited, DRDGOLD Limited,
Business Ventures Investment No. 750 (Pty) Limited, or BVI 1, and Business Ventures Investment No. 751 (Pty) Limited, or BVI 2,
dated July 13, 2005.

Under this agreement we acquired from the IDC, 60 ordinary shares in BVI 1, representing 60% of the total issued share capital

of BVI 1, and 60 ordinary shares in BVI 2, representing 60% of the total issued share capital of BVI 2, for the purchase price of
approximately $18.30 (R120.00).

Option Agreement entered into by and between DRDGOLD Limited and M5 Developments (Pty) Limited, dated July 21, 2005.

Under this agreement M5 Developments (Pty) Limited, or M5, was granted an option, for a non-refundable fee of $0.1 million

(R0.5 million) per month, until exercise of the option, to acquire Durban Deep’s mine village for $2.2 million (R15.0 million). The option
period initially expired on September 19, 2005, but was extended to November 19, 2005. If the option was exercised the option fee would
be deemed part payment of the purchase consideration. If not, the option fee was to be forfeited to us.

On November 18, 2005, M5 exercised the option and provided a guarantee for payment. Prior to registration of transfer

occurring, we were notified by Rand Leases Properties Limited (formerly JCI Properties Limited), or Rand Leases Properties, of an
alleged pre-emptive right in respect of the property pursuant to an agreement dated December 1996, and demanding that the property be
sold to them on similar terms. We have since repudiated the agreement of sale with M5 and have also notified Rand Leases Properties
that we do not intend offering the property to them. Both parties have indicated that they intend to institute legal proceedings for the sale
and transfer of the property and we await service of legal process.

140

Agreement of Employment between DRDGOLD Limited and Mr. J.W.C. Sayers, dated August 10, 2005.

Under this agreement Mr. J.W.C. Sayers, appointed as Chief Financial Officer on September 5, 2005, receives from us an all-

inclusive remuneration package of $0.3 million (R2.0 million) per annum. Mr. J.W.C. Sayers is eligible under his employment agreement,
for an incentive bonus of up to 50% of his annual remuneration package in respect of each of four bonus cycles of 6 months each over the
duration of his appointment, on condition that he achieves certain key performance indicators.

Memorandum of Agreement between DRDGOLD Limited, Simmer & Jack Mines Limited and Simmer & Jack Investments
(Proprietary) Limited, or S&J Companies, dated August 31, 2005.

Under this agreement we agreed to sell 13,000,460 ordinary no par value shares in Buffelsfontein Gold Mines Limited (in

provisional liquidation) to the S&J Companies for $0.0015 (R0.01) per share as part of a scheme of arrangement between the S&J
Companies and Buffelsfontein’s creditors in terms of Section 311 of the South African Companies Act, 1973. This agreement is
conditional upon the S&J Companies assuming all existing and future obligations relating to the pumping and management of
underground water in the Klerksdorp/Orkney/Stilfontein/Hartebeesfontein area and providing us with indemnity against all liability
arising in this regard.

Deed of Loan, Cession, Payment and Set-off entered between DRDGOLD Limited, East Rand Proprietary Mines Limited, Crown Gold
Recoveries (Pty) Limited and Blyvooruitzicht Gold Mining Company Limited, dated November 7, 2005.

Under this agreement we loaned approximately $1.4 million (R9.2 million) to ERPM. ERPM instructed us to pay that amount to

KBH on its behalf in respect of an agreement between KBH and ERPM in terms of which ERPM acquired from KBH, shareholders
claims against Crown.

Share Sale Agreement between Business Venture Investments 750 (Pty) Limited, or BVI 750, and DRDGOLD South African
Operations (Pty) Limited, dated November 8, 2005.

Under this agreement BVI 750 sold to DRDGOLD SA, 60 ordinary shares, or the sale shares, which BVI 750 held in Crown.

DRDGOLD SA paid the purchase price of R1.00 ($0.15) in cash for the sale shares.

Share Sale Agreement between Business Venture Investments 751 (Pty) Limited, or BVI 751, and DRGOLD South African Operations
(Pty) Limited, dated November 8, 2005.

Under this agreement BVI 751 sold approximately 160,000,000 ordinary shares, or the sale shares, to DRDGOLD SA which

BVI 751 held in ERPM. DRDGOLD SA paid the purchase price of R1.00 ($0.15) in cash for the sale shares.

Subscription Agreement between DRDGOLD Limited and DRDGOLD South African Operations (Pty) Limited, dated
November 9 2005.

Under this agreement we subscribed for 850,000 fully paid ordinary shares in DRDGOLD SA, or the subscription shares, for a

total subscription price of R130.0 million ($19.3 million). As consideration for the subscription shares, we transferred approximately
50 million ordinary shares in Blyvoor, all of which were held by us, to DRDGOLD SA in full and final discharge of the subscription price
of R130.0 million ($19.3 million).

Share Sale Agreement between Crown Consolidated Gold Recoveries Limited and DRDGOLD South African Operations (Pty)
Limited, dated November 14, 2005.

Under this agreement CCGR sold to DRDGOLD SA 40 ordinary shares held by CCGR in Crown, which CCGR had acquired

through the exercise of rights held under a deed of pledge. The purchase price for the 40 ordinary shares was R1.00 ($0.15) payable in
cash.

141

Subscription Agreement between DRDGOLD South African Operations (Pty) Limited and Khumo Gold SPV (Pty) Limited, dated
November 18, 2005.

Under this agreement Khumo Gold subscribed for 150,000 fully paid ordinary shares in DRDGOLD SA of R0.001 ($0.00015)

each against a payment of approximately R13.2 million ($2.0 million).

Subscription Agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited, dated November 18, 2005.

Under this agreement we subscribed for 31,811 Khumo Gold Class A cumulative participating compulsorily redeemable

preference shares in the share capital of Khumo Gold with a par value of R1.00 ($0.15) and a premium of R999.00 ($149.85) each. We
discharged our obligation to subscribe for the Khumo Gold Class A preference shares by paying the issue price of R31.8 million
($4.8 million).

Cession Agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited and Khumo Bathong Holdings (Pty) Limited,
dated November 18, 2005.

Under this agreement we ceded to Khumo Gold upon receipt of a written opinion from an independent expert that this

agreement is fair and reasonable to our shareholders and upon receipt of the purchase consideration, all claims we had against KBH
arising from and in respect of the loan owed by KBH to us resulting from a loan agreement dated June 12, 2002. Pursuant to the terms of
this loan agreement, as of November 9, 2005, KBH was indebted to us in an amount of R7.9 million ($1.2 million). Khumo Gold was
obliged to pay the purchase consideration of R7.9 million ($1.2 million) to us by no later than November 18, 2005 or upon fulfillment of
the suspensive condition, by procuring the transfer from the proceeds of the issuance of the Khumo Gold Preference shares an amount
equal to the purchase consideration, to us.

Cession Agreement between DRDGOLD Limited and The Industrial Development Corporation of South Africa Limited and Business
Venture Investment No 750 (Pty) Limited and Business Venture Investment No 751 (Pty) Limited, dated November 18, 2005.

Under this agreement the parties to the agreement recorded the terms on which the IDC agreed to sell and transfer the claims, the

indemnities and the debenture, and waive in pledge of the shareholders loan by KBH to Crown in favor of us.

Option Agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited and DRDGOLD South African Operations (Pty)
Limited, dated November 18, 2005.

Under this agreement we granted Khumo Gold, for no consideration, an option to purchase 50,000 ordinary shares in

DRDGOLD SA. In addition, we granted Khumo Gold, acting as promoter of an Employee Trust, for no consideration, an option to
purchase 60,000 ordinary shares in DRDGOLD SA. The option expires on November 18, 2008. The parties agreed that Khumo Gold
shall pay R4.3 million ($0.6 million) for the purchase of the 50,000 ordinary shares and approximately R5.0 million ($0.8 million) for the
purchase of the 60,000 ordinary shares.

Offer of Class A Preference share between Khumo Gold SPV (Pty) Limited and East Rand Proprietary Mines Limited, dated
November 18, 2005.

Under this agreement Khumo Gold subscribed for one Class A cumulative participating preference share in the share capital of

ERPM at the subscription price of approximately R4.1 million ($0.6 million).

Offer of Class A Preference between Khumo Gold SPV (Pty) Limited and Blyvooruitzicht Gold Mining Company Limited, dated
November 18, 2005.

Under this agreement Khumo Gold subscribed for one Class A cumulative participating preference share in the share capital of

Blyvoor at the subscription price of approximately R3.9 million ($0.6 million).

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Offer of Class A Preference between Khumo Gold SPV (Pty) Limited and Crown Gold Recoveries (Pty) Limited, dated
November 18, 2005.

Under this agreement Khumo Gold subscribed for one Class A cumulative participating preference share in the share capital of

Crown at the subscription price of approximately R2.7 million ($0.4 million).

Shareholders Agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited and DRDGOLD South African Operation
(Pty) Limited, dated November 24, 2005

Under this agreement we acquired 85% of the issued share capital in DRDGOLD SA and Khumo Gold holds 15% of the issued

share capital of DRDGOLD SA. This agreement was entered into in order to establish the manner in which DRDGOLD SA is to be
managed and it sets out the terms governing their relationship as shareholders in DRDGOLD SA.

Sale and Subscription Agreement between DRDGOLD Limited and DRD (Offshore) Limited, dated January 4, 2006.

Under this agreement we sold to DRD (Offshore) our entire shareholding in DRD (Isle of Man) in consideration of the issue to

us of three ordinary shares of British Pound 1.00 each on the share capital of DRD (Offshore). The consideration for the sale of the sale
shares in DRD (Isle of Man) was $230.0 million (R1.5 billion) and DRD (Offshore) issued share certificates in favor of us which became
the 100% holding company of DRD (Offshore).

Share Sale Agreement between DRD (Isle of Man) Limited and DRD (Offshore) Limited, dated February 22, 2006.

DRD (Isle of Man) sold, as beneficial owner free from all liens, pledges and any other encumbrances to DRD (Offshore) its

entire shareholding in the issued share capital of Emperor. The consideration for the shares was the US Dollar amount equal to the value
of the shares, calculated by using the closing market price of Emperor shares on the Australian Stock Exchange and the Australian
Dollar/US Dollar exchange rate as at the close on the date of completion. The date of completion was the fifth business day after
shareholders’ approval and Investec’s approval on this share sale agreement. The parties agreed that DRD (Isle of Man) shall lend the
consideration referred to above to DRD (Offshore). The consideration was deemed to have been advanced to DRD (Offshore) on
January 1, 2006 and used by DRD (Offshore) to pay DRD (Isle of Man) for the shares. It was agreed that the loan shall be interest free.

Restructure Deed between DRD (Offshore) Limited and DRD (Isle of Man) Limited and Emperor Mines Limited and Emperor Gold
Mining Company Limited, or EGM, and Australia and New Zealand Banking Group Limited, or ANZ, dated February 24, 2006.

Under this agreement and in consideration of the payment of the loan transfer amount of approximately $7.4 million by DRD

(Offshore) to DRD (Isle of Man) in a form agreed between those two parties, DRD (Isle of Man) must novate to DRD (Offshore) all of
DRD (Isle of Man)’s right, title and interest in the loan agreement, or the loan interest, entered into among EGM, DRD (Isle of Man) and
Emperor on July 8, 2005. Property in, title to and risk associated with DRD (Isle of Man)’s right, title and interest in the said loan
agreement will accrue to DRD (Offshore) as if the restructure of that loan interest had occurred on January 1, 2006.

Facility Agreement between DRD (Porgera) Limited and Tolukuma Gold Mines Limited and Australia and New Zealand Banking
Group Limited, dated March 20, 2006.

Under this agreement ANZ provided DRD (Porgera) and Tolukuma a Project Debt Facility of up to $35.0 million and a

Working Capital Facility of up to $7.0 million.

Settlement of Loans Agreement between DRD (Isle of Man) Limited and DRD (Offshore) Limited, dated March 23, 2006.

In terms of this Agreement DRD (Isle of Man) and DRD (Offshore) agreed that the loans, including all outstanding claims, loans

and/or debts between the parties arising prior to or as a result of the DRD (Isle of Man) re-organization would be settled, so that
subsequent to the DRD (Isle of Man) re-organization there shall be no amount due or payable as between the parties. The DRD (Isle of
Man) re-organization included the transfer of assets out of DRD (Isle of Man), assignment of some material contracts by DRD (Isle of
Man) to DRD (Offshore), termination of some material contracts, repayment or capitalization of inter-company loans, repayment and
termination or variation of the Investec Facility Agreement to remove any recourse to DRD (Offshore) or us and remain as an undrawn
facility available for DRD (Isle of Man) after completion.

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10D. EXCHANGE CONTROLS

The following is a summary of the material South African exchange control measures, which has been derived from publicly

available documents. The following summary is not a comprehensive description of all the exchange control regulations. The discussion
in this section is based on the current law and positions of the South African Government. Changes in the law may alter the exchange
control provisions that apply, possibly on a retroactive basis.

Introduction

Dealings in foreign currency, the export of capital and revenue, payments by residents to non-residents and various other

exchange control matters in South Africa are regulated by the South African exchange control regulations, or the Regulations. The
Regulations form part of the general monetary policy of South Africa. The Regulations are issued under Section 9 of the Currency and
Exchanges Act, 1933 (as amended). In terms of the Regulations, the control over South African capital and revenue reserves, as well as
the accruals and spending thereof, is vested in the Treasury (Ministry of Finance), or the Treasury.

The Treasury has delegated the administration of exchange controls to the Exchange Control Department of the South African

Reserve Bank, or SARB, which is responsible for the day to day administration and functioning of exchange controls. SARB has a wide
discretion. Certain banks authorized by the Treasury to co-administer certain of the exchange controls, are authorized by the Treasury to
deal in foreign exchange. Such dealings in foreign exchange by authorized dealers are undertaken in accordance with the provisions and
requirements of the exchange control rulings, or Rulings, and contain certain administrative measures, as well as conditions and limits
applicable to transactions in foreign exchange, which may be undertaken by authorized dealers. Non-residents have been granted general
approval, in terms of the Rulings, to deal in South African assets, to invest and disinvest in South Africa.

The Regulations provide for restrictions on exporting capital from the Common Monetary Area consisting of South Africa,

Namibia, and the Kingdoms of Lesotho and Swaziland. Transactions between residents of the Common Monetary Area are not subject to
these exchange control regulations.

There are many inherent disadvantages to exchange controls, including distortion of the price mechanism, problems encountered

in the application of monetary policy, detrimental effects on inward foreign investment and administrative costs associated therewith. The
South African Finance Minister has indicated that all remaining exchange controls are likely to be dismantled as soon as circumstances
permit. Since 1998, there has been a gradual relaxation of exchange controls. The gradual approach to the abolition of exchange controls
adopted by the Government of South Africa is designed to allow the economy to adjust more smoothly to the removal of controls that
have been in place for a considerable period of time. The stated objective of the authorities is equality of treatment between residents and
non-residents with respect to inflows and outflows of capital. The focus of regulation, subsequent to the abolition of exchange controls, is
expected to favor the positive aspects of prudential financial supervision.

The present exchange control system in South Africa is used principally to control capital movements. South African companies

are not permitted to maintain foreign bank accounts without SARB approval and, without the approval of SARB, are generally not
permitted to export capital from South Africa or hold foreign currency. In addition, South African companies are required to obtain the
approval of SARB prior to raising foreign funding on the strength of their South African balance sheets, which would permit recourse to
South Africa in the event of defaults. Where 75% or more of a South African company's capital, voting power, power of control or
earnings is directly or indirectly controlled by non-residents, such a corporation is designated an “affected person” by SARB, and certain
restrictions are placed on its ability to obtain local financial assistance. We are not, and have never been, designated an “affected person”
by SARB.

Foreign investment and outward loans by South African companies are also restricted. In addition, without the approval of

SARB, South African companies 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. South African companies establishing
subsidiaries, branches, offices or joint ventures abroad are generally required to submit financial statements on these operations as well as
progress reports to SARB on an annual basis. As a result, a South African Company's ability to raise and deploy capital outside the
Common Monetary Area is restricted.

144

Although exchange controls have been gradually relaxed since 1998, unlimited outward transfers of capital are not permitted at

this stage. Some of the more salient changes to the South African exchange control provisions over the past few years have been as
follows:

•

corporations wishing to invest in countries outside the Common Monetary Area, in addition to what is set out below, apply for
permission to enter into corporate asset/share swap and share placement transactions to acquire foreign investments. The latter
mechanism entails the placement of the locally quoted corporation's shares with long-term overseas holders who, in payment for
the shares, provide the foreign currency abroad which the corporation then uses to acquire the target investment;

•

corporations wishing to establish new overseas ventures are permitted to transfer offshore up to R1.0 billion ($137.5 million) to
finance approved investments abroad and up to R2.0 billion ($275.1 million) to finance approved new investments in African
countries. However, the approval of SARB is required in advance. On application to SARB, corporations are also allowed to use
part of their local cash holdings to finance up to 10% of approved new foreign investments where the cost of these investments
exceeds the current limits;

•

as a general rule, SARB requires that more than 50% of equity of the acquired off-shore venture is acquired within a
predetermined period of time, as a prerequisite to allowing the expatriation of funds. If these requirements are not met, SARB
may instruct that the equity be disposed of. In our experience SARB has taken a commercial view on this, and has on occasion
extended the period of time for compliance; and

•

remittance of directors' fees payable to persons permanently resident outside the Common Monetary Area may be approved by
authorized dealers, in terms of the Rulings.

Authorized dealers in foreign exchange may, against the production of suitable documentary evidence, provide forward cover to

South African residents in respect of fixed and ascertained foreign exchange commitments covering the movement of goods.

Persons who emigrate from South Africa are entitled to take limited amounts of money out of South Africa as a settling-in

allowance. The balance of the emigrant's funds will be blocked and held under the control of an authorized dealer. These blocked funds
may only be invested in:

•

blocked current, savings, interest bearing deposit accounts in the books of an authorized dealer in the banking sector;

•

securities quoted on the JSE and financial instruments listed on the Bond Exchange of South Africa which are deposited with an
authorized dealer and not released except temporarily for switching purposes, without the approval of SARB. Authorized dealers
must at all times be able to demonstrate that listed or quoted securities or financial instruments which are dematerialized or
immobilized in a central securities depository are being held subject to the control of the authorized dealer concerned; or

•

mutual funds.

Aside from the investments referred to above, blocked Rands may only be utilized for very limited purposes. Dividends declared

out of capital gains or out of income earned prior to emigration remain subject to the blocking procedure. It is not possible to predict when
existing exchange controls will be abolished or whether they will be continued or modified by the South African Government in the
future.

Sale of Shares

Under present exchange control regulations in South Africa, our ordinary shares and ADSs are freely transferable outside the

Common Monetary Area between non-residents of the Common Monetary Area. In addition, the proceeds from the sale of ordinary
shares on the JSE on behalf of shareholders who are not residents of the Common Monetary Area are freely remittable to such
shareholders. Share certificates held by non-residents will be endorsed with the words “non-resident,” unless dematerialized.

Dividends

Dividends declared in respect of shares held by a non-resident in a Company whose shares are listed on the JSE are freely

remittable.

Any cash dividends paid by us are expected to be paid in Rands. Holders of ADSs on the relevant record date will be entitled to

receive any dividends payable in respect of the shares underlying the ADSs, subject to the terms of the deposit agreement entered on
August 12, 1996, and as amended and restated, between the Company and The Bank of New York, as the depository. Subject to
exceptions provided in the deposit agreement, cash dividends paid in Rand will be converted by the depositary to Dollars and paid by the
depositary to holders of ADSs, net of conversion expenses of the depositary, in accordance with the deposit agreement. The depositary
will charge holders of ADSs, to the extent applicable, taxes and other governmental charges and specifies fees and other expenses.

145

Voting rights

There are no limitations imposed by South African law or by our Articles on the right of non-South African shareholders to hold

or vote our ordinary shares.

10E. TAXATION

Material Income Tax Consequences

The following is a summary of the material income tax considerations under South African and United States, or US, tax law.

No representation with respect to the consequences to any particular purchaser of our securities is made hereby. Prospective purchasers
are urged to consult their own tax advisers with respect to their particular circumstances and the effect of US national, state or local tax
laws to which they may be subject.

South Africa

South Africa imposes tax on worldwide income of South African residents. Generally, South African non-residents do not pay

tax in South Africa except in the following circumstances:

Income Tax

Non-residents will pay income tax on any amounts received by or accrued to them from a source within (or deemed to be within)

South Africa. Interest earned by a non-resident on a debt instrument issued by a South African company will be regarded as being derived
from a South African source but will be regarded as exempt from taxation in terms of Section 10(1)(hA) of the South African Income Tax
Act, 1962 (as amended), or the Income Tax Act. This exemption does not apply if:

•

the non-resident has been a resident of South Africa at any time and carried on a business in South Africa;

•

the non-resident was a resident of the Common Monetary Area, in other words, Lesotho, Namibia and Swaziland, and in such an
event the non-resident shall be deemed to be a resident of South Africa;

•

the interest is effectively connected with a business carried on by the non-resident in South Africa; and/or

•

the recipient of the interest is a natural person, unless they were absent from South Africa for at least 183 days in aggregate
during the year of assessment in which the interest was received or accrued.

No withholding tax is deductible in respect of interest payments made to non-resident investors.

No income tax is payable on dividends paid to residents or non-residents, in terms of Section 10(1)(k) of the Income Tax Act

except in respect of foreign dividends received by or accrued to residents of South Africa. Accordingly, there is no withholding tax on
dividends received by or accrued to non-resident shareholders of companies listed in South Africa and non-residents will receive the same
dividend as South African resident shareholders. Prior to payment of the dividend, the Company pays Secondary Tax on Companies at a
rate of 12.5% of the excess of dividends declared over dividends received in a dividend cycle but the full amount of the dividend declared
is paid to shareholders.

Capital Gains Tax

Non-residents are generally not subject to capital gains tax, or CGT, in South Africa. They will only be subject to CGT on gains

arising from the disposal of capital assets if the assets disposed of consist of:

•

immovable property owned by the non-residents situated in South Africa, or any interest or right in or to immovable property. A
non-resident will have an interest in immovable property if it has a direct or indirect shareholding of at least 20% in a company,
where 80% or more of the net assets of that company (determined on a market value basis) are attributable directly or indirectly
to immovable property; or

•

any asset of a permanent establishment of a non-resident in South Africa through which a trade is carried on.

If the non-residents are not subject to CGT because the assets disposed of do not fall within the categories described above, it

follows that they will also not be able to claim the capital losses arising from the disposal of the assets.

146

Taxation of dividends

South Africa imposes a corporate tax known as Secondary Tax on Companies, or STC, on the distribution of earnings in the

form of dividends, and, at present, the STC tax rate is equal to 12.5%.

In 1993, all existing gold mining companies had the option to elect to be exempt from STC. If the election was made, a

higher tax rate would apply for both mining and non-mining income. In fiscal 2006 the tax rates for taxable mining and non-mining
income, for companies that elected the STC exemption were 45% (2005 and 2004: 46%) and 37% (2005 and 2004: 38%),
respectively. During those same years the tax rates for companies that did not elect the STC exemption were 35% (2005 and 2004:
37%) and 29% (2005 and 2004: 30%), respectively. In 1993, the Company elected not to be exempt from STC, as this would have
meant that the Company would have been liable for normal taxation at the higher rates of 45% for mining income and 37% for non-
mining income. The Company, having chosen not to be subject to the STC exemption, is subject to 35% tax on mining income and
29% for non-mining income. However, with the exception of Blyvoor and ERPM, all of the Company’s South African subsidiaries
elected the STC exemption.

South Africa does not impose any withholding tax or any other form of tax on dividends paid to US holders with respect to

shares. Should South Africa decide in the future to impose a withholding tax on dividends paid to a US holder with respect to shares, the
tax treaty between the United States and South Africa would limit the rate of this tax to 5 percent of the gross amount of the dividends if a
US holder holds directly at least 10 percent of our voting stock and 15 percent of the gross amount of the dividends in all other cases. The
above provisions shall not apply if the beneficial owner of the dividends is resident in the US, carries on business in South Africa through
a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed base situated
in South Africa, and the dividends are attributable to such permanent establishment or fixed base.

United States

Material United States Federal Income Tax Consequences

The following is a summary of material US federal income tax consequences to US holders (as defined below) of the purchase,

ownership and disposition of ordinary shares or ADSs. It deals only with US holders who hold ordinary shares or ADSs as capital assets
for US federal income tax purposes. This discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended, or
the Code, published rulings, judicial decisions and the Treasury regulations, all as currently in effect and all of which are subject to
change, possibly on a retroactive basis. This discussion has no binding effect or official status of any kind; we cannot assure holders that
the conclusions reached below would be sustained by a court if challenged by the Internal Revenue Service.

This discussion does not address all aspects of US federal income taxation that may be applicable to holders in light of their

particular circumstances and does not address special classes of US holders subject to special treatment (such as dealers in securities or
currencies, partnerships or other pass-through entities, financial institutions, life insurance companies, banks, tax-exempt organizations,
certain expatriates or former long-term residents of the United States, persons holding ordinary shares or ADSs as part of a “hedge,”
“conversion transaction,” “synthetic security,” “straddle,” “constructive sale” or other integrated investment, persons whose functional
currency in not the US dollar, or persons that actually or constructively own ten percent or more of our voting stock). This discussion
addresses only US federal income tax consequences and does not address the effect of any state, local, or foreign tax laws that may apply,
or the alternative minimum tax.

A “US holder” is a holder of ordinary shares or ADSs that is, for US federal income tax purposes:

•

a citizen or resident of the US;

•

a corporation that is organized under the laws of the US or any political subdivision thereof;

•

an estate, the income of which is subject to US federal income tax without regard to its source; or

•

a trust, if a court within the US is able to exercise primary supervision over the administration of the trust and one or more US
persons have the authority to control all substantial decisions of the trust or if the trust has made a valid election to be treated as a
US person.

147

If a partnership holds any ordinary shares or ADSs, the tax treatment of a partner will generally depend on the status of the

partner and on the activities of the partnership. Partners of partnerships holding any notes, ordinary shares or ADSs are urged to consult
their tax advisors.

Because individual circumstances may differ, US holders of ordinary shares or ADSs are urged to consult their own tax

advisors concerning the US federal income tax consequences applicable to their particular situations as well as any consequences
to them arising under the tax laws of any foreign, state or local taxing jurisdiction.

Ownership of Ordinary Shares or ADSs

For purposes of the Code, a US holder of ADSs will be treated for US federal income tax purposes as the owner of the ordinary

shares represented by those ADSs. Exchanges of ordinary shares for ADSs and ADSs for ordinary shares generally will not be subject to
US federal income tax.

For US federal income tax purposes, distributions with respect to the ordinary shares or ADSs, other than distributions in

liquidation and distributions in redemption of stock that are treated as exchanges, will be taxed to US holders as ordinary dividend income
to the extent that the distributions do not exceed our current and accumulated earnings and profits. For US federal income tax purposes,
the amount of any distribution received by a US holder will equal the Dollar value of the sum of the South African Rand payments made
(including the amount of South African income taxes, if any, withheld with respect to such payments), determined at the “spot rate” on
the date the dividend distribution is includable in such US holder's income, regardless of whether the payment is in fact converted into
Dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date a US holder includes
the dividend payment in income to the date such holder converts the payment into Dollars will be treated as ordinary income or loss.
Distributions, if any, in excess of our current and accumulated earnings and profits will constitute a non-taxable return of capital and will
be applied against and reduce the holder's basis in the ordinary shares or ADSs. To the extent that these distributions exceed the US
holder's tax basis in the ordinary shares or ADSs, as applicable, the excess generally will be treated as capital gain, subject to the
discussion below under the heading “Passive Foreign Investment Company.” We do not intend to calculate our earnings or profits for US
federal income tax purposes.

Under the recently enacted Jobs and Growth Tax Relief Reconciliation Act of 2003, the maximum US federal income tax rate on

dividends paid to individuals through 2008 is reduced to 15%. This reduced rate generally would apply to dividends paid by us if, at the
time such dividends are paid, either (i) we are eligible for benefits under a qualifying income tax treaty with the US or (ii) our ordinary
shares or ADSs with respect to which such dividends were paid are readily tradable on an established securities market in the US.
However, this reduced rate is subject to certain important requirements and exceptions, including, without limitation, certain holding
period requirements and an exception applicable if we are treated as a passive foreign investment company as discussed under the
heading “Passive Foreign Investment Company.” US holders are urged to consult their own tax advisors regarding the US federal income
tax rate that will be applicable to their receipt of any dividends paid with respect to the ordinary shares and ADSs.

For purposes of this discussion, the “spot rate” generally means a rate that reflects a fair market rate of exchange available to the

public for currency under a “spot contract” in a free market and involving representative amounts. A “spot contract” is a contract to buy
or sell a currency on or before two business days following the date of the execution of the contract. If such a spot rate cannot be
demonstrated, the US Internal Revenue Service has the authority to determine the spot rate.

Dividend income derived with respect to the ordinary shares or ADSs will constitute “portfolio income” for purposes of the

limitation on the use of passive activity losses and, therefore, generally may not be offset by passive activity losses, and as “investment
income” for purposes of the limitation on the deduction of investment interest expense. Such dividends will not be eligible for the
dividends received deduction generally allowed to a US corporation under Section 243 of the Code. Dividend income will be treated as
foreign source income for foreign tax credit and other purposes. In computing the separate foreign tax credit limitations, dividend income
should generally constitute “passive income,” or in the case of certain US holders, “financial services income.”

148

As discussed under “Taxation - South Africa” above, South Africa currently does not impose any withholding tax on

distributions with respect to the ordinary shares or ADSs. Should South Africa decide in the future to impose a withholding tax on such
distributions, the tax treaty between the United States and South Africa would limit the rate of this tax to 5 percent of the gross amount of
the distributions if a US holder holds directly at least 10 percent of our voting stock and to 15 percent of the gross amount of the
distributions in all other cases. In addition, if South Africa decided in the future to impose a withholding tax on distributions with respect
to the ordinary shares or ADSs, a determination would need to be made at such time as to whether any South African income taxes
withheld would be treated as foreign income taxes eligible for credit against such US holder's US federal income tax liability, subject to
limitations and conditions generally applicable under the Code. Any such taxes may be eligible at the election of such US holder, for
deduction in computing such US holder's taxable income. The limitation on foreign taxes eligible for credit is calculated separately with
respect to specific classes of income. The calculation of foreign tax credits and, in the case of a US holder that elects to deduct foreign
taxes, the availability of deductions is complex and involves the application of rules that depend on a US holder's particular
circumstances. US holders are urged to consult their own tax advisors regarding the availability to them of foreign tax credits or
deductions in respect of South African income taxes, if any, withheld.

Disposition of Ordinary Shares or ADSs

Upon a sale, exchange, or other taxable disposition of ordinary shares or ADSs, a US holder will recognize gain or loss in an

amount equal to the difference between the US dollar value of the amount realized on the sale or exchange and such holder's adjusted tax
basis in the ordinary shares or ADSs. Subject to the application of the “passive foreign investment company” rules discussed below, such
gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the US holder has held the ordinary shares or
ADSs for more than one year. The deductibility of capital losses is subject to limitations. Gain or loss recognized by a US holder on the
taxable disposition of ordinary shares or ADSs generally will be treated as US-source gain or loss for US foreign tax credit purposes.

In the case of a cash basis US holder who receives Rand in connection with the taxable disposition of ordinary shares or ADSs,

the amount realized will be based on the spot rate as determined on the settlement date of such exchange. A US holder who receives
payment in Rand and converts Rand into US Dollars at a conversion rate other than the rate in effect on the settlement date may have a
foreign currency exchange gain or loss that would be treated as ordinary income or loss.

An accrual basis US holder may elect the same treatment required of cash basis taxpayers with respect to a taxable disposition of

ordinary shares or ADSs, provided that the election is applied consistently from year to year. Such election may not be changed without
the consent of the Internal Revenue Service. In the event that an accrual basis holder does not elect to be treated as a cash basis taxpayer,
such US holder may have a foreign currency gain or loss for US federal income tax purposes because of the differences between the US
dollar value of the currency received prevailing on the trade date and the settlement date. Any such currency gain or loss will be treated as
ordinary income or loss and would be in addition to gain or loss, if any, recognized by such US holder on the disposition of such ordinary
shares or ADSs.

Passive Foreign Investment Company

A special and adverse set of US federal income tax rules apply to a US holder that holds stock in a passive foreign investment

company, or PFIC. We would be a PFIC for US federal income tax purposes if for any taxable year either (i) 75% or more of our gross
income, including our pro rata share of the gross income of any company in which we are considered to own 25% or more of the shares
by value, were passive income or (ii) 50% or more of our average total assets (by value), including our pro rata share of the assets of any
company in which we are considered to own 25% or more of the shares by value, were assets that produced or were held for the
production of passive income. If we were a PFIC, US holders of the ordinary shares or ADSs would be subject to special rules with
respect to (i) any gain recognized upon the disposition of the ordinary shares or ADSs and (ii) any receipt of an excess distribution
(generally, any distributions to a US holder during a single taxable year that is greater than 125% of the average amount of distributions
received by such US holder during the three preceding taxable years in respect of the ordinary shares or ADSs or, if shorter, such US
holder's holding period for the ordinary shares or ADSs). Under these rules:

•

the gain or excess distribution will be allocated ratably over a US holder's holding period for the ordinary shares or ADSs, as
applicable;

•

the amount allocated to the taxable year in which a US holder realizes the gain or excess distribution will be taxed as ordinary
income;

•

the amount allocated to each prior year, with certain exceptions, will be taxed at the highest tax rate in effect for that year; and

•

the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such
year.

149

Although we generally will be treated as a PFIC as to any US holder if we are a PFIC for any year during a US holder's holding

period, if we cease to satisfy the requirements for PFIC classification, the US holder may avoid PFIC classification for subsequent years if
such holder elects to recognize gain based on the unrealized appreciation in the ordinary shares or ADSs through the close of the tax year
in which we cease to be a PFIC. Additionally, if we are a PFIC, a US holder who acquires ordinary shares or ADSs from a decedent
would be denied the normally available step-up in tax basis for such notes, ordinary shares or ADSs to fair market value at the date of
death and instead would have a tax basis equal to the lower of the fair market value or the decedent's tax basis.

A US holder who beneficially owns stock in a PFIC must file Form 8621 (Return by a Shareholder of a Passive Foreign

Investment Company or Qualified Electing Fund) with the Internal Revenue Service for each tax year such holder holds stock in a PFIC.
This form describes any distributions received with respect to such stock and any gain realized upon the disposition of such stock.

A US holder of the ordinary shares or ADSs that are treated as “marketable stock” under the PFIC rules may be able to avoid the

imposition of the special tax and interest charge described above by making a mark-to-market election. Pursuant to this election, the US
holder would include in ordinary income or loss for each taxable year an amount equal to the difference as of the close of the taxable year
between the fair market value of the ordinary shares or ADSs and the US holder's adjusted tax basis in such ordinary shares or ADSs.
Losses would be allowed only to the extent of net mark-to-market gain previously included by the US holder under the election for prior
taxable years. If a mark-to-market election with respect to ordinary shares or ADSs is in effect on the date of a US holder's death, the tax
basis of the ordinary shares or ADSs in the hands of a US holder who acquired them from a decedent will be the lesser of the decedent's
tax basis or the fair market value of the ordinary shares or ADSs. US holders desiring to make the mark-to-market election are urged to
consult their tax advisors with respect to the application and effect of making the election for the ordinary shares or ADSs.

In the case of a US holder who holds ordinary shares or ADSs and who does not make a mark-to-market election, the special tax

and interest charge described above will not apply if such holder makes an election to treat us as a “qualified electing fund” in the first
taxable year in which such holder owns the ordinary shares or ADSs and if we comply with certain reporting requirements. However, we
do not intend to supply US holders with the information needed to report income and gain pursuant to a “qualified electing fund” election
in the event that we are classified as a PFIC.

We believe that we were not a PFIC for our 2006 fiscal year ended June 30, 2006. However, the tests for determining whether

we would be a PFIC for any taxable year are applied annually and it is difficult to make accurate predictions of future income and assets,
which are relevant to this determination. In addition, certain factors in the PFIC determination, such as reductions in the market value of
our capital stock, are not within our control and can cause us to become a PFIC. Accordingly, there can be no assurance that we will not
become a PFIC.

Rules relating to a PFIC are very complex. US holders are urged to consult their own tax advisors regarding the application of
PFIC rules to their investments in our ordinary shares or ADSs.

Information Reporting and Backup Withholding

Payments made in the United States or through certain US-related financial intermediaries of dividends or the proceeds of the

sale or other disposition of our ordinary shares or ADSs may be subject to information reporting and US federal backup withholding if the
recipient of such payment is not an “exempt recipient” and fails to supply certain identifying information, such as an accurate taxpayer
identification number, in the required manner. Generally, individuals are not exempt recipients, whereas corporations and certain other
entities generally are exempt recipients. The backup withholding tax rate is currently 28%. For payments made after 2010, the backup
withholding rate will be increased to 31%. Payments made with respect to our ordinary shares or ADSs to a US holder must be reported
to the Internal Revenue Service, unless the US holder is an exempt recipient or establishes an exemption. Any amount withheld from a
payment to a US holder under the backup withholding rules is refundable or allowable as a credit against the holder's US federal income
tax, provided that the required information is furnished to the Internal Revenue Service.

US Gift and Estate Tax

An individual US holder of ordinary shares or ADSs will be subject to US gift and estate taxes with respect to ordinary shares or

ADSs in the same manner and to the same extent as with respect to other types of personal property.

10F. DIVIDENDS AND PAYING AGENTS

Not applicable.

150

10G. STATEMENT BY EXPERTS

Not applicable.

10H. DOCUMENTS ON DISPLAY

You may request a copy of our US Securities and Exchange Commission filings, at no cost, by writing or calling us at

DRDGOLD Limited, P.O. Box 390, Maraisburg, Johannesburg, South Africa 1700. Attn: Group Company Secretary. Tel No. +27-11-
219-8700. A copy of each report submitted in accordance with applicable United States law is available for public review at our principal
executive offices.

A copy of each document concerning us that is referred to in this Annual Report on Form 20-F, is available for public view at

our principal executive offices at DRDGOLD Limited, 299 Pendoring Avenue, Blackheath, Randburg, South Africa 2195.

10I. SUBSIDIARY INFORMATION

Not applicable.

151

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

In the normal course of our operations, we are exposed to market risk, including commodity price, foreign currency, interest and

credit risks. We enter into transactions which make use of derivative instruments to economically hedge certain exposures. These
instruments include interest rate swaps, forward sale commodity contracts and option contracts. The decision to use these types of
transactions is based on our hedging policy. Although most of these instruments are used as economic hedges, none of them qualify for
hedge accounting and, consequently, are marked-to-market through the statements of operations in accordance with our accounting
policies. We do not hold or issue derivative financial instruments for speculative purposes, nor do we normally hedge forward gold sales.

Commodity price risk

The market price of gold has a significant effect on our results of operations, our ability and the ability of our subsidiaries to pay

dividends and undertake capital expenditures, and the market price of our ordinary shares or ADSs. Historically, gold prices have
fluctuated widely and are affected by numerous industry factors over which we have no control. The aggregate effect of these factors on
the gold price is impossible for us to predict. The price of gold may not remain at a level allowing us to economically exploit our reserves.
It is not our policy to hedge this commodity price risk.

Until May 2002, we used forward contracts, options and swaps to reduce our risk exposure to volatility in the gold price. The

total gold production committed under our hedging program as of July 1, 2001, was 802,625 ounces over a three-year period.
Consequently, our shareholders were exposed to opportunity loss as a result of an increase in the price of gold. During fiscal 2002, our
management reached the conclusion that our hedge book structure would make it difficult for us to accomplish our strategy of providing
our investors with exposure to increases in the price of gold, as gains would be offset against potential losses on the forward contracts. As
a result, our policy is normally not to hedge forward gold sales, however we do hedge specified projects, acquisitions and capital
expenditure. With the acquisition of Emperor, during fiscal 2006, their existing gold forward contracts have been brought to book. These
gold forward contracts require delivery of 145,695 ounces between fiscal 2007 and fiscal 2009.

Forward sale commodity contracts

With the acquisition of Emperor, on April 6, 2006, existing gold forward contracts held by Emperor with ANZ were brought

to book.

These financial instruments do not qualify for hedge accounting.

The total ounces to be delivered under the gold forward contracts for the Group is 145,695 ounces and the delivery into these

derivative instruments will be in accordance with the maturity schedule agreed with ANZ, as follows:

Year ended

Strike price

June 30, 2007

June 30, 2008 June 30, 2009

$452.70

41,526 oz

82,992 oz

21,177 oz

The total fair value of the financial instrument is a liability of A$34.7 million ($25.3 million) as of June 30, 2006. The fair

value liability of the derivative financial instrument that is expected to mature within fiscal 2007 is A$9.9 million ($7.2 million),
relating to 41,526 ounces. The remaining fair value liability of A$24.8 million ($18.1 million) will be settled thereafter.Included in

profit/(loss) on derivative instruments is a gain of $4.4 million for fiscal 2006 relating to these instruments.

152

Option contracts

During January 2006,

DRD (Isle of Man)

entered into European Style gold call options, with strike prices ranging from

$634.00 to $652.50 per ounce. Expiry dates of the options range from September 2006 to December 2008. These call options provide
us with the right, but not the obligation, to buy a total of up to 46,426 ounces (reducing throughout the period) of gold at the various
strike prices. These gold call options were taken up to mitigate the deterioration in the gold forward contracts discussed above.The
settlement schedule for the gold call options is as follows:

Year ended

Strike price

June 30, 2007

June 30, 2008 June 30, 2009

$634.00

6,920 oz

4,150 oz

536 oz

$645.80

13,842 oz

8,298 oz

1,074 oz

$652.50

6,920 oz

4,150 oz

536 oz

27,682 oz

16,598 oz

2,146 oz

The fair value of the European Style gold call options at June 30, 2006, is an asset of $2.9 million.Included in profit/(loss) on

derivative instruments is a gain of $1.0 million for fiscal 2006 relating to these instruments.

Eskom gold for electricity contract

In October 2000, we entered into a contract to buy electricity from Eskom, the parastatal authority in South Africa responsible

for the supply of electricity. Under the terms of our agreement, we paid Eskom standard electricity tariff for all energy we consume,
including the 75 GWh per month specified in the contract. In addition, every 12 month-period starting in October we adjusted the
amounts paid in that period in accordance with an established formula based on the gold price. This contract expired in September 2005.

The gold price adjustment was based on the notional amount of 15,000 ounces per month of gold multiplied by the difference

between the contracted gold price, which was the price that was agreed on the date of the transaction for a determined period, and the
arithmetic average of London PM close for each business day in the calculation period.

We had concluded that (1) the contract in its entirety did not meet the definition of a derivative instrument and therefore it does

not have to be carried on our balance sheet at fair value; (2) the embedded gold for electricity forward contract possesses economic
characteristics that are not clearly and closely related to the economic characteristics of the host contract; and (3) a separate, stand-alone
instrument with the same terms would qualify as a derivative instrument. Accordingly, the embedded derivative was separated from the
host contract and carried at fair value.

The last 50,000 ounces of the gold for electricity contract was closed out on April 28, 2005, at a cost of $3.6 million.

Concentration of credit risk

Our financial instruments do not represent a concentration of credit risk, because we deal with a variety of major banks and

financial institutions located in South Africa and Australia, after evaluating the credit ratings of the representative financial institutions.
Furthermore, our accounts receivable and loans are regularly monitored and assessed for recoverability. Where it is appropriate to raise a
provision, an adequate level of provision is maintained.

In addition, our South African operations all deliver their gold to RRL, which refines the gold to saleable purity levels and then

sells the gold, on our behalf, on the bullion market. The gold is sold by RRL on the same day as it is delivered and settlement is made
within two days. Once the gold has been assayed by RRL, the risks and rewards of ownership have passed.

Tolukuma delivers their gold to one customer, AGR Matthey (PNG) and receives proceeds within two days. The concentration

of credit risk in PNG is mitigated by the reputable nature of the customer and the settlement of the proceeds within a week.

Porgera delivers their gold to AGR Matthey (PNG), who refines the gold and then delivers it to the Bank of Western Australia

Limited, or BankWest, at a price negotiated by us. The concentration of credit risk in PNG is mitigated by the reputable nature of the
customer and the settlement of the proceeds within two days.

Vatukoula delivers their gold to AGR Matthey (Fiji), who refines the gold and then sells the gold on to third parties. All

proceeds are received within a week of delivery. The concentration of credit risk in Fiji is mitigated by the reputable nature of the sales
agent and their customers and the settlement of the proceeds within six days.

153

Foreign currency risk

Our functional currency for the South African operations is the South African Rand; for Tolukuma and Porgera it is the Papua

New Guinea Kina and for Vatukoula is the Fiji Dollar.

Although gold is sold in Dollars, we are obliged to convert this into Rands for our South African operations under the South

African Reserve Bank regulations. We are thus exposed to fluctuations in the Dollar/Rand exchange rate. We conduct our operations in
South Africa, Papua New Guinea and Fiji predominantly in Rand, Kina and Fiji Dollar, respectively. Currently, foreign exchange
fluctuations affect the cash flow that we will realize from our operations as gold is sold in Dollars while production costs are incurred
primarily in Rands, Papua New Guinean Kina, Fiji Dollars and Australian Dollars. Our results are positively affected when the Dollar
strengthens against these foreign currencies and adversely affected when the Dollar weakens against these foreign currencies. Our cash
and cash equivalent balances are held in Dollars, Rands, Papua New Guinean Kina, Fiji Dollars and Australian Dollars; holdings
denominated in other currencies are relatively insignificant. Certain of our financial liabilities are denominated in a currency other than
the Rand. We are thus mostly exposed to fluctuations in the Rand and Australian exchange rate with the relevant currency.

Based on our fiscal 2006 financial results, a hypothetical 10% increase/decrease in exchange rate activity would have the

following approximate impacts on revenues and net profit/(loss) after tax:

Exchange rate

Impact on revenue

Impact on net profit/(loss) after tax

Rand/Dollar

$14.9 million

$10.6 million

Kina/Dollar

$9.4 million

$6.6 million

Australian Dollar/Dollar

$0.2 million

$0.2 million

We have not entered into any foreign exchange hedging contracts to attempt to mitigate our foreign currency risk.

Interest rate risk

Interest rate swap agreement

From time to time we enter into interest rate swap agreements to mitigate interest rate risk.

An interest rate swap agreement was entered into to minimize the exposure to changes in interest rates with regard to the coupon

payable on our $66,000,000 of 6% Senior Convertible Notes due November 2006 (refer to Note 19 of the financial statements). The fixed
coupon rate (in Dollars) of 6% per annum was swapped for a floating South African interest rate, calculated at the forward
JIBAR plus 200 basis points per annum. An amount of 60% of the coupon rate is subject to this swap agreement, based on the
requirements of the South African Reserve Bank, as this represents the amount of the funds raised utilized in South Africa. The maturity
date of this agreement was November 2006, however during fiscal 2006 this contract was closed out. Included in profit/(loss) on
derivative instruments is $nil for fiscal 2006.

As discussed in Note 17 to our financial statements, the fair value of the interest rate swap agreement was a liability of

$0.6 million and $2.0 million as at June 30, 2005 and June 30, 2004, respectively.

On December 18, 2002 (amended April 19, 2004), Emperor entered into the Vatukoula loan facility with ANZ Banking Group

Limited, or ANZ. In order to minimize fluctuation in interest rates, 64% of the loan has been covered by entering into interest swap
contracts under which we are obliged to receive interest at variable rates and pay interest at a fixed rate of 4.34% until October 2008. As
discussed in Note 17 to our financial statements, the fair value of the interest rate swap agreement at June 30, 2006, is an asset of

$0.1 million.Included in profit/(loss) on derivative instruments is $nil for fiscal 2006 relating to this instrument.

Based on our fiscal 2006 financial results the interest rate swap agreement would result in a decrease of our interest expense

by 0.2 million.

154

Long-term debt

Set out below is an analysis of our debt as at June 30, 2006, analyzed between fixed and variable interest rates and classified by

currency.

Dollar

denominated

loans

Australian

dollar

denominated

loans

Rand

denominated

loans

Total

$'000

$’000

$'000

$'000

Interest rate

Variable rate.......................................................................................................

-

56,779

2,665

59,444

Weighted average interest rate ........................................................................

n/a

7.7%

10.0%

n/a

Fixed rate...........................................................................................................

66,925

-

-

66,925

Weighted average interest rate ........................................................................

6.0%

n/a

n/a

n/a

Total .................................................................................................................

66,925

56,779

2,665

126,369

Repayment period

2007...................................................................................................................

66,925

7,060

2,132

76,117

2008...................................................................................................................

-

10,106

533

10,639

2009...................................................................................................................

-

6,435

-

6,435

2010...................................................................................................................

-

6,936

-

6,936

2011...................................................................................................................

-

4,568

-

4,568

2012 onwards....................................................................................................

-

21,674

-

21,674

Total .................................................................................................................

66,925

56,779

2,665

126,369

Based on our fiscal 2006 financial results, a hypothetical 10% increase/decrease in interest rate activity would increase/decrease

our interest expense by $7.5 million.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

155

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

There have been no material defaults in the payment of principal, interest, a sinking or purchase fund installment, or any other

material defaults with respect to any indebtedness of ours.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS

Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of our disclosure controls and

procedures (as this term is defined under the rules of the SEC) as of June 30, 2006. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2006, our disclosure controls and procedures were not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the US Securities Exchange Act of 1934. They based this conclusion on our failure to obtain in a timely fashion and include in this report the financial statements with respect to Emperor Mines Limited and Crown Gold Recoveries (Pty) Limited required by Item 3-09 of Regulation S-X as further disclosed in this Annual Report above under the caption: "Explanatory Note Regarding the Omission from this Annual Report of Certain Financial Statements Required by Rule 3-09 of Regulation S-X."


Changes in Internal Control over Financial Reporting

During the year ended June 30, 2006, there have not been any changes in our internal control over financial reporting that

have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

156

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

There is at least one member of our audit committee that possesses the relevant attributes sufficient to have an understanding of

International Financial Reporting Standards, or IFRS, and financial statements and the ability to assess the general application of IFRS.
However, we do not have an audit committee financial expert (as defined in Item 16A of the Form 20-F) as no member of the Audit
Committee currently has the required US GAAP experience.

The board is satisfied that the skills, experience and attributes of the members of the audit committee are sufficient to enable

those members to discharge the responsibilities of the audit committee.

ITEM 16B. CODE OF ETHICS

We have adopted a Code of Ethics and Conduct that applies to all senior executives including our Non-Executive Chairman,

the Chief Executive Officer, Chief Financial Officer and the Group Financial Manager and Financial Manager at each mining
operation as well as all other employees. The Code of Ethics and Conduct can be accessed on the Company’s website at

www.drdgold.com

.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

KPMG Inc. has served as our independent public accountant for the fiscal years ending June 30, 2006, 2005 and 2004, for which

audited financial statements appear in this Annual Report. The Annual General Meeting elects the auditors annually.

The following table presents the aggregate fees for professional audit services and other services rendered by KPMG Inc. to us

in fiscal 2006 and 2005:

Auditors' remuneration

Year ended June 30,

2006

2005

$’000

$’000

Audit fees............................................................................................................................................................

1,769

1,535

Audit-related fees................................................................................................................................................

247

-

Tax fees ..............................................................................................................................................................

40

55

All other fees.......................................................................................................................................................

5

5

2,061

1,595

Audit Fees

Audit fees billed for the annual audit services engagement, which are those services that the external auditor reasonably can

provide, include the company audit; statutory audits; comfort letters and consents; attest services; and assistance with and review of
documents filed with the SEC.

Audit-Related Fees

Audit-related fees for fiscal 2006 include fees billed by KPMG Inc. in respect of an IFRS gap analysis and assistance provided

on our Section 404 Sarbanes-Oxley Act of 2002 readiness project of approximately R1.0 million ($0.2 million). This project includes
assistance relating to the documentation of internal control procedures.

Tax Fees

Fees for tax services include fees billed for tax compliance, tax advice and tax planning services.

All Other Fees

All other fees consist of all fees billed which are not included under audit fees, audit related fees or tax fees. In fiscal 2006,

this amount relates to fees billed for a review of a shareholders’ circular issued during the year.

The Audit Committee appoints, re-appoints and removes the external auditors as well as determines the remuneration and

terms of engagement of the external auditors. The committee pre-approves, and has pre-approved, all non-audit services provided by
the external auditors. The Audit Committee considered all of the fees mentioned above and determined that such fees are compatible
with maintaining KPMG Inc.’s independence.

157

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

158

PART III

ITEM 17. FINANCIAL STATEMENT

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The following financial statements and related auditor’s reports are filed as part of this Annual Report.

Page

Report of the independent registered public accounting firm.............................................................................................

F-1

Consolidated statements of operations for the years ended June 30, 2006, 2005 and 2004 ..............................................

F-2

Consolidated balance sheets at June 30, 2006 and 2005. ..................................................................................................

F-3

Consolidated statements of stockholders' equity for the years ended June 30, 2006, 2005 and 2004. ..............................

F-4

Consolidated statements of cash flows for the years ended June 30, 2006, 2005 and 2004. .............................................

F-5

Notes to the consolidated financial statements....................................................................................................................

F-6 to F-54

F-1

Report of the Independent Registered Public Accounting Firm to the Board of Directors and Stockholders of DRDGOLD Limited

We have audited the accompanying consolidated balance sheets of DRDGOLD Limited and its subsidiaries as of June 30, 2006 and 2005,
and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the three-year period
ended June 30, 2006. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of DRDGOLD Limited and its subsidiaries at June 30, 2006 and 2005, and the results of their operations
and their cash flows for each of the years in the three-year period ended June 30, 2006, in conformity with US generally accepted
accounting principles.

As discussed in Note 3 to the consolidated financial statements, DRDGOLD Limited changed its method of accounting for share-based
payments effective July 1, 2005.






/s/ KPMG Inc.
KPMG Inc.
Registered Accountants and Auditors

Johannesburg, Republic of South Africa
December 19, 2006

F-2

DRDGOLD Limited

Consolidated Statements of Operations for the years ended June 30

2006

2005

2004

Notes

$'000

$'000

$'000

REVENUES

Product sales

245,301

183,609

183,254

COSTS AND EXPENSES

(213,448) (137,540) (143,355)

Production costs

(211,559) (136,520) (143,026)

Movement in gold in process

545

1,717

920

Movement in rehabilitation provision, reclamation and closure costs

18

(2,434)

(2,737)

(1,249)

OTHER OPERATING EXPENSES

Depreciation and amortization

12

(24,776)

(13,797)

(25,975)

Employment termination costs

6

(875)

(4,201)

(899)

Impairment of assets

7

(3)

(664)

(2,990)

Management and consulting fees

(2,407)

(6,651)

(2,448)

Profit/(loss) on derivative instruments

17

10,767

3,616

(1,042)

Profit/(loss) on sale of mining assets

1,017

2

(55)

SELLING, ADMINISTRATION AND GENERAL CHARGES

(including stock based compensation costs of $2.0 million (2005: $1.0 million and
2004: $2.3 million))

(19,010)

(17,777)

(22,600)

NET OPERATING (LOSS)/INCOME

(3,434)

6,597

(16,110)

Interest and other income

1,707

2,363

1,243

Unrealized foreign exchange (losses)/gains

(6,775)

(9,277)

10,672

Profit on sale of other assets and listed investments

71

527

63

Profit on disposal of subsidiaries

4

17,305

-

-

FINANCE COSTS

Interest expense

(11,461)

(11,365)

(7,750)

LOSS FROM CONTINUING OPERATIONS BEFORE TAX AND OTHER
ITEMS

(2,587)

(11,155)

(11,882)

Income and mining tax expense

8

(3,299)

(5,762)

(14,230)

Equity in loss from associates

15

(19,943)

(20,511)

(11,975)

LOSS FROM CONTINUING OPERATIONS AFTER TAX

(25,829)

(37,428)

(38,087)

Minority interest

(25)

(2)

(7)

NET LOSS FROM CONTINUING OPERATIONS APPLICABLE TO
COMMON STOCKHOLDERS

(25,854)

(37,430)

(38,094)

Profit/(loss) from discontinued operation, net of taxes

9

2,023

(44,359)

(20,804)

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS

(23,831)

(81,789)

(58,898)

BASIC LOSS PER SHARE FROM CONTINUING OPERATIONS
(CENTS)

21

(9)

(15)

(17)

PROFIT/(LOSS) FROM DISCONTINUED OPERATION (CENTS)

21

1

(17)

(10)

BASIC LOSS PER SHARE (CENTS)

21

(8)

(32)

(27)

DILUTED LOSS SHARE (CENTS)

21

(9)

(15)

(17)

PROFIT/(LOSS) FROM DISCONTINUED OPERATION (CENTS)

21

1

(17)

(10)

DILUTED LOSS PER SHARE (CENTS)

21

(8)

(32)

(27)

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-3

DRDGOLD Limited

Consolidated Balance Sheets at June 30

2006

2005

Notes

$'000

$'000

ASSETS

Current assets

113,264

61,355

Cash and cash equivalents

54,912

36,085

Restricted cash and cash equivalents

19

12,344

-

Receivables

10

10,858

5,480

Receivables owing by related parties

10

-

579

Prepayments

952

1,961

Inventories

11

28,715

15,455

Derivative instruments

17

2,857

-

Deferred income and mining tax

8

563

1,795

Mining assets held for sale

2,063

-

Mining assets

12

253,514

122,170

Cost

386,206

288,000

Accumulated depreciation and amortization

(132,692)

(165,830)

Other assets

Investment in associates

15

-

15,442

Non-current inventories

11

30,159

32,103

Non-current assets

13

9,284

7,187

Total Assets

406,221

238,257

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

158,732

49,758

Bank overdraft

331

1,370

Accounts payable and accrued liabilities

16

52,669

33,317

Derivative instruments

17

25,222

-

Short-term portion of long-term loans

19

76,117

9,678

Income and mining taxes payable

4,393

5,393

Non-current liabilities

113,604

108,572

Long-term loans

19

50,252

69,314

Deferred income and mining tax

8

13,220

16,112

Derivative instruments

17

-

550

Provision for environmental rehabilitation, reclamation and closure costs

18

46,777

22,596

Post retirement and other employee benefits

3,355

-

Total Liabilities

272,336

158,330

Minority interest

30,871

874

Stockholders’ equity

103,014

79,053

Authorized

600,000,000 (2005: 600,000,000) ordinary no par value shares and 5,000,000
(2005: 5,000,0000) cumulative preference shares

Issued

320,035,078 (2005: 296,206,048) ordinary no par value shares and 5,000,000
(2005: 5,000,000) cumulative preference shares

Cumulative preference shares

20

107

107

Stated capital and share premium

20

593,596

563,045

Additional paid-in capital

20

55,177

39,732

Unearned stock compensation

-

(338)

Accumulated deficit

(502,337)

(478,506)

Other comprehensive loss

(43,529)

(44,987)

Total Liabilities and Stockholders’ Equity

406,221

238,257

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-4

DRDGOLD Limited
Consolidated Statements of Stockholders’ Equity
For the years ended June 30

Cumulative

Stated capital

Additional

Unearned

Other

Total

Number of Number of

preference

and share

paid-in

stock Accumulated comprehensive

stockholders’ Comprehensive

common

preferred

shares

premium

capital

compensation

deficit

loss

equity

(loss)/ income

shares

shares

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

BALANCE – JUNE 30, 2003

184,222,073

5,000,000

107

360,351

37,705

-

(337,819)

(50,154)

10,190

12,534

Exercise of employee stock options

978,053

1,298

1,298

Issue of shares for cash

41,463,639

107,367

107,367

Share issue expenses

(992)

(992)

Shares issued for acquisition of joint venture

6,643,902

16,748

16,748

Net loss for the year

(58,898)

(58,898)

(58,898)

Unearned stock compensation

1,642

(1,642)

-

Amortization of unearned stock compensation

2,310

2,310

Other comprehensive income, net of tax of nil

Foreign currency translation adjustments

(1,639)

5,228

3,589

5,228

BALANCE – JUNE 30, 2004

233,307,667

5,000,000

107

484,772

39,347

(971)

(396,717)

(44,926)

81,612

(53,670)

Exercise of employee stock options

55,000

60

60

Issue of shares for cash

56,230,705

65,914

65,914

Share issue expenses

(4,305)

(4,305)

Shares issued for acquisition of associate

6,612,676

16,604

16,604

Net loss for the year

(81,789)

(81,789)

(81,789)

Unearned stock compensation

385

(385)

-

Amortization of unearned stock compensation

1,002

1,002

Other comprehensive income, net of tax of nil

Decrease in mark-to-market on listed investments

(45)

(45)

(45)

Foreign currency translation adjustments

16

(16)

-

(16)

BALANCE – JUNE 30, 2005

296,206,048

5,000,000

107

563,045

39,732

(338)

(478,506)

(44,987)

79,053

(81,850)

Exercise of employee stock options

629,009

539

539

Issue of shares for cash

17,815,945

25,359

31,092

Share issue expenses

(1,080)

(1,080)

Shares issued for acquisition of loans

4,451,219

4,501

Shares issued in exchange for services rendered

932,857

1,232

Net loss for the year

(23,831)

(23,831)

(23,831)

Unearned stock compensation adjustment upon adoption

of FAS 123(R)

(338)

338

-

Stock-based compensation expense

2,038

2,038

Gain arising from issuance by subsidiary of its own stock

13,745

13,745

Other comprehensive income, net of tax of nil

Increase in mark-to-market on listed investments

117

117

117

Foreign currency translation adjustments

1,341

1,341

1,341

BALANCE – JUNE 30, 2006

320,035,078

5,000,000

107

593,596

55,177

-

(502,337)

(43,529)

103,014

(22,373)

Analysis of accumulated other comprehensive loss:

2004

2005

2006

Mark-to-market on listed investments

45

-

117

Foreign currency translation adjustments

(44,971)

(44,987)

(43,646)

(44,926)

(44,987)

(43,529)

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-5

DRDGOLD Limited

Consolidated Statements of Cash Flows

For the years ended June 30

2006

2005

2004

Notes

$’000

$’000

$’000

Net cash utilized by operating activities

(2,422)

(23,788)

(25,092)

Net loss applicable to common stockholders

(23,831)

(81,789)

(58,898)

Reconciliation to net cash provided by operations:

Net increase in provision for rehabilitation – continuing operations

18

2,434

2,737

1,249

Net increase in provision for rehabilitation – discontinued operation

18

-

1,023

2,206

Depreciation and amortization – continuing operations

12

24,776

13,797

25,975

Depreciation and amortization – discontinued operation

12

-

971

4,160

Impairment of assets – continuing operations

7

3

664

2,990

Impairment of assets – discontinued operation

-

39,451

1,276

Unrealized gain on derivative instruments, net

(16,581)

(7,119)

(25,171)

Unrealized foreign exchange losses/(gains)

6,775

9,277

(10,672)

Unrealized (profit)/losses on unlisted investments

26

-

-

(Profit)/loss on sale of mining assets

(1,017)

(2)

55

Profit on disposition of discontinued operation

(2,850)

(18,105)

-

Stock based compensation expense

2,038

1,002

2,310

Change in accruals on post-retirement and other employee benefits

1,015

-

-

Profit on sale of other assets and listed investments

(71)

(527)

(63)

Accretion on the derivative portion of the Senior Convertible Notes

5,344

5,481

1,438

Amortization of debt issuance costs

1,546

1,597

1,533

Deferred tax provision

1,674

(6,792)

6,842

Equity in loss from associate

15

19,943

20,511

11,975

Minority interest in loss of subsidiary

25

2

7

Profit on disposition of interest in subsidiaries

4

(17,305)

-

-

Net cash flow on disposition of discontinued operation

-

(7,582)

-

Effect of changes in working capital items:

Receivables

(5,507)

5,750

7,114

Inventories

(1,345)

(895)

4,014

Accounts payable and accrued liabilities (excluding short-term loans)

(709)

(4,888)

(7,389)

Movement in interest accruals

2,741

(1,452)

644

Movement in net taxation liability

(1,546)

3,100

3,313

Net cash utilized in investing activities

(30,345)

(31,640)

(94,074)

Additions to mining assets

(40,957)

(24,863)

(26,917)

Proceeds on disposal of mining assets

1,114

2,180

3,397

Cash paid for acquisition of subsidiaries and for joint venture interest, net of cash acquired

4

7,108

-

(59,789)

Additions to investment in associate

-

(8,590)

-

Additions to investments

(1,143)

(849)

(10,828)

Proceeds on sale of other assets and listed investments

60

482

63

Proceeds on disposal of subsidiary, net of cash disposed

4

3,473

-

-

Net cash generated in financing activities

52,644

67,441

88,626

Costs associated with the issue of the convertible notes

-

-

(636)

Net proceeds from issue of shares

31,631

65,974

108,665

Share issue expenses

(1,080)

(4,305)

(992)

Decrease in bank overdraft

(1,039)

(458)

(2,069)

Increase in restricted cash

(12,344)

-

-

Long-term loans received

48,591

10,020

2,765

Long-term loans repaid

(13,115)

(3,790)

(19,107)

Net increase/(decrease) in cash and cash equivalents

19,877

12,013

(30,540)

Effect of exchange rate changes on cash

(1,050)

1,619

8,570

Cash and cash equivalents at beginning of year

36,085

22,453

44,423

Cash and cash equivalents at end of year

54,912

36,085

22,453

Income taxes paid

4,200

9,224

4,075

Interest paid

6,550

7,107

5,014

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-6

1. NATURE OF OPERATIONS

DRDGOLD Limited (“the Company”) was formed in 1895 and is a gold mining company engaged in underground and surface gold
mining including exploration, extraction, processing and smelting. The Group (being the Company and its subsidiaries and joint
venture) focuses its operations on the West Witwatersrand basin in South Africa, in Papua New Guinea and Fiji.

As at June 30, 2006, the South African operations consist of an 85% interest in each of Blyvooruitzicht Gold Mining Company
Limited, or Blyvoor, Crown Gold Recoveries (Pty) Limited, or Crown, and East Rand Proprietary Mines Limited, or ERPM. The
Australasian operations consist of a 78.72% interest in Emperor Mines Limited, or Emperor, which owns Vatukoula in Fiji, Tolukuma
in Papua New Guinea and a 20% interest in the Porgera Joint Venture in Papua New Guinea. The Company also has exploration
projects in South Africa, Papua New Guinea, Fiji and Australia.

2. RESTATEMENT OF FINANCIAL STATEMENTS

On July 30, 2004, the Company’s offer to the shareholders of Emperor closed with the Company having received acceptances from
Emperor’s shareholders representing approximately 25.55% of Emperor’s issued share capital, thereby increasing the Company’s
shareholding in Emperor from 19.78% to 45.33%. Accordingly, the Company issued 6,612,676 shares in exchange for the 29,097,269
Emperor shares to the value of $16.6 million, based on the market value of the Company’s shares on the date issued. Share issue and
transaction costs associated with the offer amounted to $1.7 million.

Due to its cumulative ownership of 45.33% at June 30, 2005, the Company accounted for its investment in Emperor under the equity
method of accounting. Accounting Principles Board Opinion No. 18, “The Equity Method of Accounting for Investments in Common
Stock”, or APB Opinion No. 18, required the use of the equity method of accounting if the investment gave the Company the ability to
exercise significant influence over operating and financial policies, but not control, over an investee. As a result of the additional
equity ownership and change in relationship with Emperor, including representation on Emperor’s board of directors, the Company
had the ability to exercise significant influence over the operations of Emperor. Accordingly, the Company restated the prior year’s
financial statements, as if the equity method had been utilized from December 2002, the date of the initial acquisition of the investment
in Emperor.

As required by APB Opinion No. 18, the change to the equity method in accounting for the Emperor investment required restatement
of prior period financial statements. Beginning in August 2004, the Company recognized 45.33% of the loss of Emperor, adjusted for
amortization of the excess purchase price. The amount included for the year ended June 30, 2004, represented 19.78% of Emperor’s
losses, adjusted for the amortization of the excess purchase price.

The following is a summary of the effects of the restatement, for the change to the equity method in accounting for the investment in
Emperor, on the consolidated statements of operations for the year ended June 30, 2004.

Effect on consolidated statement of operations

Year ended June 30, 2004

As previously

reported

Adjustments

As restated

$’000

$’000

$’000

Equity in loss from associates

(8,827)

(3,148)

(11,975)

Net profit applicable to common stockholders

(55,750)

(3,148)

(58,898)

Basic profit per share (cents)

(26)

(1)

(27)

F-7

3. SIGNIFICANT ACCOUNTING POLICIES

The following are accounting policies used by the Group which have been consistently applied as indicated below:

Basis of presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America. The Company presents its consolidated financial statements in United States Dollars.

Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting principles in the United States requires
the Group’s management to make assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting
period. These estimates include the collectability of related party receivables, the valuation of deferred tax assets, the impairment of
mining assets, and the estimation of environmental rehabilitation, reclamation and closure costs, among others. Actual results could
differ from those estimates.

Consolidation
The consolidated financial information includes the financial statements of the Company, its subsidiaries and investments in associates
and joint venture. A company which is more than 50% owned by the Group, which the Group controls directly or indirectly, through
other subsidiary interests, is classified as a subsidiary. The results of any subsidiary, associate or joint venture acquired or disposed of
during the year, are consolidated from the effective date of acquisition and up to the effective date of disposal.

Intra-company transactions and balances are eliminated on consolidation.

Investment in joint venture
Investments in unincorporated mining joint ventures in which the Group has joint control, under a contractual agreement, are reported
using the proportionate consolidation method.

Investment in associates
Investments in associates are accounted for by the equity method of accounting. These are entities over which the Group has the ability
to exercise significant influence, but which it does not control. The ability to exercise significant influence is presumed where the
Group owns more than 20%, but less than 50%, of the voting stock of an investee. The Group’s investments in associates are carried in
the balance sheet at an amount that reflects its share of the net assets of the associates.

The recoverable amount of the associate, that is the Group’s proportionate share of the fair value of the associate, is compared to the
carrying value of the associate. If an impairment exists on this basis, a reduction in the carrying value of the associate is recorded to the
extent that the carrying value exceeds the fair value.

Equity accounting involves recognizing, in the statement of operations, the Group’s share of the associates’ profit or loss for the year
after tax to the extent of the Group’s investment in and advances to its associates.

Goodwill on the acquisition of associates is included in the carrying value of the investment in associates.

Goodwill
Where the excess purchase price of a business acquisition cannot be attributed to assets acquired, including acquired properties and
mineral rights, it is included in goodwill and reviewed for impairment in accordance with the provisions of Statement of Financial
Accounting Standards, or SFAS No. 142, “Goodwill and Other Intangible Assets.”

Goodwill is stated at cost less impairment. Goodwill is tested for impairment at the reporting unit level on an annual basis, or more
frequently if the Group believes indicators of impairment exist. The performance of the test involves a two step process. The first step
of the impairment test involves comparing the fair value of the reporting unit with the reporting unit’s carrying amount, including
goodwill. The fair value of the reporting unit is determined based on estimated future discounted cash flows. If the carrying amount of
the reporting unit exceeds the reporting unit’s fair value, the second step of the goodwill impairment test is performed to determine the
amount of the impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the
reporting unit’s goodwill with the carrying amount of that goodwill. The impairment which is recognized in the statement of operations
is measured as the amount by which the carrying amount exceeds the implied fair value of the reporting unit’s goodwill.

F-8

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign currency
The Group’s functional currency for the South African operations is the South African Rand, for the Papua New Guinean operations is
the Papua New Guinean Kina and for the Fiji operation is the Fiji Dollar. Transactions denominated in currencies other than the
functional currency are recorded at the rate of exchange ruling at the transaction date. Monetary assets and liabilities denominated in
such currencies are translated at the rates applicable at the balance sheet date and profits and losses arising as a result of translating
those assets and liabilities to the functional currency are recorded in the statement of operations.

For foreign subsidiaries, whose functional currency is a currency other than the Rand, assets and liabilities are translated using the
closing rates at year end, and the statement of operations is translated at average rates. Differences arising on translation are included
as a component of other comprehensive loss.

The financial statements are translated by the Company into US Dollars, for the purpose of reporting, in accordance with SFAS No.
52, “Foreign Currency Translation,” whereby assets and liabilities are translated using the closing rates at year end, the statement of
operations is translated at average rates and equity at historical rates. The translation differences arising as a result of converting to US
Dollars, using the current exchange rate method, are included as a separate component of stockholders’ equity – other comprehensive
loss.

Receivables
Receivables consist of amounts owing by external and related parties and include amounts of a long- and short-term nature. Provisions
for uncollectible amounts are included in determining net income or loss where a decline in the value of the receivable has occurred.
Interest on balances owed to the Group accrues on a daily basis. Interest accrued on impaired balances owed to the Group is not
recorded as it is not considered to be recoverable.

Cash and cash equivalents
Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less.
Due to the short maturity of the investments, the carrying amounts approximate their fair value.

Non-current unlisted investments
Non-current unlisted investments, in which the Group does not have significant influence or a controlling interest, are carried at
acquisition cost. Realized gains and losses are included in determining net income or loss. Impairment losses are included in
determining net income or loss where an other than temporary decline in the value of the investment has occurred.

Non-current listed investments
Non-current listed investments, are treated as ‘available for sale’, and are accounted for at fair value with unrealized gains and losses
excluded from earnings and reported as a separate component of stockholders’ equity. Realized gains and losses are included in
determining net income or loss.

Inventories
Inventories, comprising gold in process (being gold at the stage of production immediately prior to smelting) and supplies, are stated at
the lower of cost and market value. Costs are assigned to inventory on an average cost basis. Costs relating to gold in process comprise
all costs incurred to the stage immediately prior to smelting, including costs of extraction, depletion and processing, based on the
relevant stage of production. Selling, refining and general administration costs are excluded from inventory valuation.

Non-current inventory comprises ore in stockpiles. These in-process inventories are measured on the absorption cost method and
valued at the lower of average production cost and net realizable value, after a reasonable allowance for further processing costs. Costs
relating to ore in stockpiles comprise all costs incurred to the stage immediately prior to stockpiling, including costs of extraction and
crushing, as well as processing costs associated with ore stockpiles, based on the relevant stage of production.

Exploration costs
Mining exploration costs, including property acquisitions and mineral and surface rights relating to exploration stage properties are
expensed as incurred.

Development costs
Development costs relating to major programs at existing mines are capitalized. Development costs consist primarily of expenditures
to initially establish a mine and to expand the capacity of operating mines. Ordinary development costs to maintain production are
expensed as incurred.

F-9

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Mining assets
Land is recorded at cost and not depreciated. Buildings and other non-mining fixed assets are recorded at cost less accumulated
depreciation.

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. Amortization is calculated on a mine-by-mine basis (i.e. the cost pools are the
individual mines) using the units of production method. Under the units of production method, the Group estimates the amortization
rate based on actual production over total proven and probable ore reserves of the particular mine. This rate is then applied to actual
costs incurred to arrive at the amortization expense for the period. Proven and probable ore reserves of a particular mine reflect
estimated quantities of economically recoverable reserves that can be recovered in the future from known mineral deposits that are
presently accessible.

Impairment of mining assets
The impairment of long-lived assets is accounted for in terms of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-
Lived Assets.”

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an
asset or group of assets may not be recoverable. Recoverability of an asset or asset group is assessed by comparing the carrying amount
of an asset or group of assets to the estimated future undiscounted net cash flows of the asset or group of assets. Estimates of future
cash flows include estimates of future gold prices and foreign exchange rates. It is therefore reasonably possible that changes could
occur which may affect the recoverability of the Group’s mining assets. If an asset or asset group is considered to be impaired, the
impairment which is recognized is measured as the amount by which the carrying amount of the asset or group of assets exceeds the
discounted future cash flows expected to be derived from that asset or group of assets. The asset, or asset group, is the lowest level for
which there are identifiable cash flows that are largely independent of other cash flows. The lowest level for which there are
identifiable cash flows that are largely independent of other cash flows is on a mine-by-mine basis. Therefore the Company makes the
analysis on a mine-by-mine basis.

Leased assets
Assets subject to finance leases are capitalized at the lower of fair value or present value of minimum lease payments with the related
lease obligation recognized at the same amount. Capitalized leased assets are depreciated over the shorter of their estimated useful
lives and the lease term. Finance lease payments are allocated using the effective interest rate method, between the lease finance cost,
which is included in finance costs, and the capital repayment, which reduces the liability to the lessor.

Operating lease rentals are charged against operating profits in a systematic manner related to the period the assets concerned will be
used.

Deferred stripping costs
Stripping costs incurred in open-pit operations during the production phase to remove additional waste are charged to operating costs
on the basis of the average life of mine stripping ratio and the average life of mine costs per ton. The average stripping ratio is
calculated as the number of tons of waste material expected to be removed during the life of mine per ton of ore mined. The average
life of mine cost per ton is calculated as the total expected costs to be incurred to mine the ore body divided by the number of tons
expected to be mined. The average life of mine stripping ratio and the average life of mine cost per ton are recalculated annually in
light of additional knowledge and changes in estimates.

The cost of the “excess stripping” is capitalized as mine development costs when the actual mining costs exceed the sum of the
adjusted ore tons mined, being the actual ore tons plus the product of the actual ore tones multiplied by the average life of mine
stripping ratio, multiplied by the life of mine cost per ton. When the actual mining costs are below the sum of the adjusted ore tons
mined, being the actual ore tons plus the product of the actual ore tons multiplied by the average life of mine stripping ratio, multiplied
by the life of mine cost per ton, previously capitalized costs are expensed to increase the cost up to the average. Thus, the cost of
stripping in any period will be reflective of the average stripping rates for the ore body as a whole. Deferred stripping costs of
$23.6 million (2005: $12.5 million), at Porgera, are classified as mining assets and the amounts amortized are included in the
depreciation and amortization charge for all periods presented. During fiscal 2006, $12.9 million (2005: $11.1 million) of deferred
stripping costs were capitalized to mining assets.

The deferred stripping costs are included in the carrying values of mining assets used in the impairment tests performed in accordance
with the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

F-10

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Borrowing costs
Interest on borrowings utilized to finance qualifying capital projects under construction is capitalized during the construction phase as
part of the cost of the project. Other borrowing costs are expensed as incurred. No borrowing costs were capitalized during the years
ended June 30, 2006, 2005 or 2004.

Environmental rehabilitation, reclamation and closure costs
The Group accounts for its obligations associated with the retirement of tangible long-term assets and the associated asset retirement
costs in accordance with SFAS No. 143, “Accounting for Asset Retirement Obligations,” or SFAS No. 143. The standard applies to
legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and
normal use of the asset.

SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the
associated asset and this additional carrying amount is depreciated over the life of the asset. The liability is accreted at the end of each
period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Group
will recognize a gain or loss on settlement.

Under SFAS No. 143, accounting for environmental rehabilitation and reclamation obligations requires management to make estimates
for each mining operation of the future costs the Group will incur to complete final reclamation work required to comply with existing
laws and regulations. Actual costs incurred in future periods could differ from amounts estimated. Additionally, future changes to
environmental laws and regulations could increase the extent of reclamation and remediation work required to be performed by the
Group. Any such increases in future costs could materially impact the amounts charged to operations for reclamation and remediation.

In South Africa, annual contributions are made to dedicated rehabilitation trust funds to fund the estimated cost of rehabilitation during
and at the end of the life of the relevant mine. The funds contributed to the trusts, including income earned thereon, are included under
non-current assets.

Revenue
Revenue consists of sales of gold bullion and is recognized when the product is delivered to the relevant refinery, Rand Refinery
Limited in South Africa, AGR Matthey in Papua New Guinea (for Tolukuma and Porgera) and AGR Matthey in Fiji (for Vatukoula), at
which stage title, including all risks and rewards of ownership, passes from the Group to the buyer.

Once the gold bars reach the refinery, they are assayed to determine the gold content of each bar before being sent for refining where it
is purified to 99.9% purity and cast into troy ounce bars of varying weights. The bullion is then sold by the refinery on the same day as
the delivery, and the proceeds are remitted to the Group within two to six days.

Derivative instruments
Under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended, all derivative instruments are
recognized on the balance sheet at their fair value, unless they meet the criteria for the normal purchase normal sale exception. On the
date a derivative contract is entered into, the derivative can be designated as (1) a hedge of the fair value of a recognized asset or
liability (fair value hedge), (2) a hedge of a forecasted transaction (cash flow hedge), or (3) a hedge of a net investment in a foreign
entity. The Group’s derivative transactions, while designed to provide effective economic hedges under the Group’s risk management
policies, do not qualify for hedge accounting. Therefore, any changes in the fair value of derivative instruments are recognized in the
statement of operations for each reporting period. Derivative instruments are not entered into for trading purposes.

F-11

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Pension plans and other employee benefits
Pension plans, which are multi-employer plans, in the nature of defined contribution plans, are funded through annual contributions,
which are expensed as incurred.

In addition, the Group makes long-service awards to certain eligible employees, based on both the employee’s skill level and years of
service with qualified gold mining companies. The obligation is accrued over the service life of the employees and is calculated using a
projected credit unit method.

The Group contributes to a defined contribution multi-employer medical fund for current employees and certain retirees on an annually
determined contribution basis. No contributions are made for employees retiring after December 31, 1996. The contributions are
expensed as incurred.

The Group has an obligation to provide medical benefits to certain of its pensioners and dependants of ex-employees. Post-retirement
medical benefits in respect of qualifying employees are recognized as an expense over the expected remaining service lives of relevant
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.

Premium and debt costs
Discounts and underwriting, legal and other direct costs incurred in connection with the issuance of debt are deferred and are
amortized, over the period of the debt, to interest expense using the effective interest method.

Taxation
Deferred income and mining taxes
The Group follows the liability method of accounting for deferred income and mining tax whereby the Group recognizes the tax
consequences of temporary differences by applying current enacted statutory tax rates applicable to future years to differences between
financial statement amounts and the tax bases of certain assets and liabilities. Changes in deferred tax assets and liabilities include the
impact of any tax rate changes enacted during the year.

A valuation allowance is raised against deferred tax assets which are not considered more likely than not to be realizable.

Secondary Taxation on Companies (STC)
STC is a tax levied by the South African Revenue Services on dividends declared and becomes payable on declaration of a dividend.
STC is expensed when the related dividend is declared.

(Loss)/profit per share
(Loss)/profit per share is calculated based on the net result divided by the weighted average number of shares in issue during the year.
Fully diluted (loss)/profit per share is based upon the inclusion of potential dilutive shares with a dilutive effect on (loss)/profit per
share. In fiscal 2006, the shares underlying the convertible notes and the shares underlying the staff options allocated in terms of the
Employee Share Option Scheme, or ESOS, along with their respective impact on the net (loss)/profit applicable to common
stockholders, of $5.9 million and $nil, were considered in determining the diluted (loss)/profit per share. In fiscal 2005 the shares
underlying the convertible notes and the shares underlying the staff options allocated in terms of ESOS, along with their respective
impact on the net (loss)/profit applicable to common stockholders, of $7.8 million and $nil, were considered in determining the diluted
loss per share. In fiscal 2004 the shares underlying the options allocated in terms of ESOS, and their respective impact on the net
(loss)/profit applicable to common stockholders, of $3.6 million and $nil, were considered in determining the diluted loss per share.

In fiscal 2006, 2005 and 2004, losses applicable to common stockholders of $23.8 million, $81.8 million and $58.9 million,
respectively, were recorded. As a result of the losses recorded in fiscal 2006, 2005 and 2004, the adjustments were anti-dilutive.

F-12

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-based compensation plans
At June 30, 2006, the Company has in place an Employee Share Option Scheme, which is described more fully in Note 22. Effective
July 1, 2005, the Company adopted SFAS No. 123 (revised 2004), “Share Based Payment,” or SFAS No. 123(R). SFAS No. 123(R)
requires that the cost resulting from all share-based payment transactions be recognized in the financial statements over the employee
requisite service period (generally the vesting period of the equity grant) and determined on a fair value based measurement method.
The fair values for stock option awards issued to employees are estimated at the date of grant using the Black-Scholes option pricing
model.

The Company adopted SFAS No. 123(R) using the modified prospective method. Under this method, compensation cost is recognized
(a) based on the requirements of SFAS No. 123(R) for all share-based payments granted after the effective date and (b) based on the
requirements of SFAS No. 123 for all awards granted to employees prior to the effective date of SFAS No. 123(R) that remained
unvested on the effective date.

Previously, the Company accounted for stock option awards using the intrinsic value method in accordance with APB Opinion No. 25,
“Accounting for Stock Issued to Employees” and related interpretations and disclosure provisions of SFAS No. 123, “Accounting for
Stock-Based Compensation.” The difference between the option strike price and the prevailing market value of the share at grant date
was recorded as compensation expense over the vesting period.

The following table illustrates the effect on net (loss)/profit applicable to common stockholders if the Company had applied the fair
value recognition provisions of SFAS No. 123 to its employee based compensation plan in 2005 and 2004 (thousands except for
earnings per share information):

Year

ended

Year

ended

June 30,

2005

June 30,

2004

Net loss applicable to common stockholders

- as stated

(81,789)

(58,898)

- add back: stock-based compensation costs included in statement of operations

1,002

2,310

- less: total stock-based compensation costs determined under fair value based method

(2,709)

(3,700)

- pro-forma

(83,496)

(60,288)

Basic loss per share

- as stated (cents)

(32)

(27)

- pro-forma (cents)

(32)

(28)

Diluted loss per share

- as stated (cents)

(32)

(27)

- pro-forma (cents)

(32)

(28)

Discontinued operation
The results of operations of discontinued Group components and gains or losses from their disposal are each presented separately net
of tax in the notes to the consolidated financial statements for all periods presented. A Group component is considered a discontinued
operation if its operations and cash flows have been or will be eliminated from the ongoing activities of the Group as a result of a
disposal transaction, the Group will not have any significant subsequent continuing involvement with the component, and the
component can be clearly distinguished, operationally and for financial reporting purposes. If not disposed of by the balance sheet
date, to qualify as discontinued operation, a component must also meet the conditions to be classified as held for sale. Net assets of a
discontinued Group component classified as held for sale are measured at the lower of its carrying amount or fair value less cost to sell.
Gains from the sale of a discontinued Group component are recognized in the period realized and reported separately.

Comparatives
Certain comparatives have been reclassified, where necessary to conform to the current year’s presentation.

F-13

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent pronouncements
EITF Issue 04-06, “Accounting For Stripping Costs Incurred During Production in the Mining Industry”
In March 2005, the EITF reached a consensus (ratified by the FASB) that stripping costs incurred during the production phase of a
mine are variable production costs that should be included in the costs of inventory produced during the period that the stripping costs
are incurred.

The EITF consensus is effective for the first reporting period in years beginning after December 15, 2005, with early adoption
permitted. The Company is reviewing the guidance issued in Issue 04-06 and has not yet determined the impact of this on its
consolidated financial statements.

FASB Staff Position, or FSP, No. FIN 46(R)-6, “Determining the variability to be considered in applying FASB Interpretation No.
46(R) (FSP FIN 46(R)-6)”
In April 2006, the FASB issued FSP FIN 46(R)-6 to address how to determine the variability to be considered in applying FASB
Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities,” or FIN 46(R). The variability to be
considered in applying FIN 46(R) is based on an analysis of the design of the entity considering the nature of the risks in the entity,
determining the purpose for which the entity was created and determining the variability the entity is designed to create and pass along
to its interest holders.

FSP FIN 46(R)-6 is effective the first day of the first reporting period beginning after June 15, 2006. The Group is evaluating the
impact of this statement and believes that it will not have a material impact on our results of operations, financial position or liquidity

FASB Interpretation No. 48, or FIN 48, “Accounting for uncertainty in income taxes–an interpretation of FASB Statement No. 109”
In July 2006, the FASB issued FIN 48 which prescribes a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. The evaluation of a tax position in
accordance with this interpretation firstly requires the determination whether it is more likely than not that a tax position will be
sustained upon examination, based on the technical merits of the position and secondly the position is measured to determine the
amount of benefit to be recognized in the financial statements. The Interpretation also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure, and transition.

FIN 48 is effective in fiscal years beginning after December 15, 2006. The provisions of FIN 48 are to be applied to all tax positions
upon initial adoption, with the cumulative effect adjustment reported as an adjustment to the opening balance of retained earnings. The
Group is in the process of evaluating the impact of this pronouncement and it is believed that it will not have a material impact on our
results of operations, financial position or liquidity.

FASB Staff Position No. FAS 115-1 and FAS 124-1, or FSP FAS 115-1 and FAS 124-1, “The meaning of other-than-temporary
impairment and its application to certain investments”
In November 2005, the FASB issued FSP FAS 115-1 and FAS 124-1 providing guidance for the determination as to when an
investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. The
guidance also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires
certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments.

FSP FAS 115-1 and FAS 124-1 is effective for reporting periods beginning after December 15, 2005 and will be adopted by the Group
in the year ended June 30, 2007. The Group is in the process of evaluating the impact of this pronouncement and it is believed that it
will not have a material impact on our results of operations, financial position or liquidity.

F-14

4. ACQUISITION AND DISPOSAL OF BUSINESSES

2006 acquisitions

Emperor Mines Limited
On November 16, 2005, the Company concluded a sale and purchase agreement with Emperor, who held a 100% stake in the Vatukoula
mine in Fiji, pursuant to which, on April 6, 2006, Emperor acquired the Company’s wholly owned subsidiary, DRD (Isle of Man) Limited,
or DRD (Isle of Man), which in turn holds the Company’s Papua New Guinea assets, comprising the 20% interest in the Porgera Joint
Venture, the 100% interest in Tolukuma Gold Mines Limited and all of the Company’s exploration tenements in Papua New Guinea. The
purchase consideration 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, the Company held 88.27% of
Emperor. Subsequently, the Company’s shareholding was diluted to 78.72% by June 30, 2006, following a number of share issues in which
the Company did not participate.

This transaction was accounted for as a reverse acquisition of Emperor by DRD (Isle of Man). The transfer of DRD (Isle of Man) to
Emperor was negotiated in conjunction with the Company obtaining control of Emperor, therefore the sale and purchase transactions could
not be separated and are accounted for as one transaction. The transaction has been accounted for by the Company as a partial sale of DRD
(Isle of Man) and a partial acquisition of Emperor. Accordingly a profit has been recognized by the Company on the portion of DRD (Isle
of Man) sold to minority shareholders. The Company has revalued the assets and liabilities of Emperor to the extent acquired and has
revalued the assets and liabilities of DRD (Isle of Man) to the extent that DRD (Isle of Man) was acquired by the minority shareholders at
the date of acquisition. The purchase consideration has been determined based on the fair value of the assets transferred to Emperor and the
fair value of the additional interest acquired in Emperor.

The estimated fair value of the assets and liabilities acquired as part of this transaction were as follows:

$’000

Cash and cash equivalents

3,973

Receivables

811

Inventories

6,246

Mining assets

112,235

Deferred income and mining tax

426

Accounts payable and accrued liabilities

(9,615)

Income and mining taxes payable

(411)

Derivative instruments

(34,417)

Amounts owing to group companies

(7,640)

Post retirement and employee benefits

(519)

Long-term loans

(13,379)

Provision for environmental rehabilitation

(1,017)

Fair value of net assets at date of acquisition

56,693

Attributable share fair value of net assets at date of acquisition (48.75% interest)

27,638

Consideration settled by transfer of assets

(27,638)

Cash and cash equivalents of acquired entity

3,973

Net cash flow on acquisition of subsidiary

3,973

Fair value of subsidiary transferred to Emperor (11.73% interest)

27,638

Historical cost of subsidiary transferred to Emperor (11.73% interest)

10,438

Profit realized on disposal of 11.73% interest in subsidiary

17,200

F-15

4. ACQUISITION AND DISPOSAL OF BUSINESSES (continued)

Crown Gold Recoveries (Pty) Limited and East Rand Proprietary Mines Limited
In November 2005, the Company transferred its 100% interest in Blyvoor and its 40% interest in Crown and ERPM to a newly created
subsidiary, DRDGOLD SA. DRDGOLD SA acquired the remaining 60% interest in Crown and ERPM from KBH. DRDGOLD SA then
issued new shares to Khumo Gold, representing a 15% interest in DRDGOLD SA. The Company retained an 85% interest in DRDGOLD
SA. The transaction was financed by the issuance of $4.8 million (R31.8 million) new Khumo Gold preference shares, to which the
Company subscribed. The proceeds from these preference shares were used by Khumo Gold to settle an existing loan to KBH of
$1.2 million (R7.9 million), subscribe for $0.6 million (R4.1 million) new preference shares in ERPM, subscribe for $0.4 million
(R2.7 million) new preference shares in Crown, subscribe for $0.6 million (R3.9 million) new preference shares in Blyvoor and
subscribe for 15% of the issued ordinary shares in DRDGOLD SA for $2.0 million (R13.2 million). The net effect of these
transactions was that the Group acquired 60% of Crown and ERPM.

The estimated fair value of the assets and liabilities of Crown Gold Recoveries (Pty) Limited acquired as part of this transaction were
as follows:

$’000

Cash and cash equivalents

1,710

Receivables

1,482

Inventories

2,597

Mining assets

20,340

Non-current assets

1,325

Accounts payable and accrued liabilities

(7,362)

Income and mining taxes payable

(21)

Amounts owing to group companies

(3,982)

Post retirement and employee benefits

(2,259)

Provision for environmental rehabilitation

(13,830)

Fair value of net assets at date of acquisition

-

Attributable share of fair value of net assets at date of acquisition (60% interest)

-

Consideration

-

Cash and cash equivalents of acquired entity

1,710

Net cash flow on acquisition of subsidiary

1,710

The estimated fair value of the assets and liabilities of East Rand Proprietary Mines Limited acquired as part of this transaction were as
follows:

$’000

Cash and cash equivalents

1,425

Receivables

2,288

Inventories

999

Mining assets

7,859

Non-current assets

426

Accounts payable and accrued liabilities

(9,959)

Amounts owing to group companies

3,269

Provision for environmental rehabilitation

(6,307)

Fair value of net assets at date of acquisition

-

Attributable share of fair value of net assets at date of acquisition (60% interest)

-

Consideration

-

Cash and cash equivalents of acquired entity

1,425

Net cash flow on acquisition of subsidiary

1,425

F-16

4. ACQUISITION AND DISPOSAL OF BUSINESSES (continued)

For information purposes only, the following unaudited pro forma financial data reflects the consolidated results of operations of the
Company as if the above business combinations had taken place on July 1, 2005 and on July 1, 2004, respectively:

Year ended Year ended

June 30,

2006

June 30,

2005

$’000

$’000

Revenue

317,497

325,900

Net loss from continuing operations before cumulative effect of accounting change

(72,888)

(25,794)

Cumulative effect of accounting change

-

-

Profit/(loss) from discontinued operation, net of taxes

2,023

(44,359)

Net loss applicable to common stockholders

(70,865)

(70,153)

Basic loss per share (cents)

(23)

(27)

Diluted loss per share (cents)

(23)

(27)

Weighted average number of shares issued

310,565,826 257,695,796

The pro forma information is not indicative of the results of operations that would have occurred had these business combinations been
consummated on July 1, 2005 and on July 1, 2004, respectively. The information is not indicative of the group’s future results of
operations.

2006 disposals

Stand 752 Parktown Extension (Pty) Limited
In September 2005, the Company sold Stand 752 Parktown Extension (Pty) Limited for R4.0 million ($0.6 million).

The aggregate carrying value of the assets and liabilities disposed of as part of this transaction were as follows:

$’000

Land and buildings

520

Accounts payable and accrued liabilities

(2)

Net assets at date of disposal

518

Net assets at date of disposal

518

Cash proceeds received

623

Profit realized on disposal of subsidiary

105

F-17

4. ACQUISITION AND DISPOSAL OF BUSINESSES (continued)

2005 acquisitions

Emperor Mines Limited
On July 30, 2004, the Company’s offer to the shareholders of Emperor Mines Limited, or Emperor, closed with the Company having
received acceptances from Emperor’s shareholders representing approximately 25.55% of Emperor’s issued share capital, thereby
increasing the Company’s shareholding in Emperor from 19.78% to 45.33%. Accordingly, the Company issued 6,612,676 shares in
exchange for the 29,097,269 Emperor shares to the value of $16.6 million, based on the market value of the Company’s shares on the
date issued. Share issue and transaction costs associated with the offer amounted to $1.7 million.

The estimated fair value of the assets and liabilities acquired as part of this transaction were as follows:

$’000

Cash and cash equivalents

1,187

Receivables

426

Inventories

2,174

Mining assets

20,034

Deferred borrowing costs

189

Deferred income and mining tax

59

Accounts payable and accrued liabilities

(2,698)

Short-term portion of long-term loans

(815)

Income and mining taxes payable

(37)

Long-term loans

(3,530)

Provision for environmental rehabilitation

(385)

Fair value of attributable net assets at date of acquisition (25.55% interest)

16,604

Attributable net assets at date of acquisition (25.55% interest)

7,133

Excess paid over net asset value

9,471

Costs on acquisition

1,702

Consideration

18,306

Settled by way of shares issued

16,604

Settled by way of cash

1,702

18,306

The fair value of the 6,612,676 no par value shares issued was $16.6 million, determined based on the prevailing market value of
DRDGOLD Limited shares on June 10, 2004 (refer Note 20), in final settlement of the purchase price determined on July 30, 2004.

The excess paid over the net asset value of Emperor relates to the fair value adjustment of the mining assets in Emperor.

F-18

4. ACQUISITION AND DISPOSAL OF BUSINESSES (continued)

2005 disposals

North West Operations
On March 3, 2005, the Company entered into a 60-day review period at the North West Operations due to continuing losses at these
operations. The purpose of this 60-day review period was to assess whether these operations could be restored to break-even.

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. There was continuing
seismic activity in the area and on March 16, 2005, the Company closed the No. 2 Shaft because of concerns for the safety of the
employees.

On March 22, 2005, application was made to the High Court of South Africa for the provisional liquidation of Buffelsfontein Gold
Mines Limited (which owns the North West Operations), which order was granted on the same day.

The aggregate carrying value of the assets and liabilities disposed of as part of this transaction were as follows:

$’000

Cash and cash equivalents

317

Receivables

2,645

Inventories

1,854

Mining assets

-

Non-current assets

18,672

Accounts payable and accrued liabilities

(21,590)

Provision for environmental rehabilitation

(19,649)

Net liabilities

(17,751)

100% thereof

17,751

Cash proceeds received

-

Costs incurred on disposal

(7,265)

Foreign currency translation gain realized

7,619

Profit realized on disposal of subsidiary

18,105

Cash proceeds received

-

Costs incurred on disposal

(7,265)

Less cash and cash equivalents of entity disposed of

(317)

Net cash flow on disposal of subsidiary

(7,582)

F-19

4. ACQUISITION AND DISPOSAL OF BUSINESSES (continued)

2004 acquisitions

Net-Gold Services Limited
With effect from April 28, 2004, the closing date, the Group acquired 50.25% of the shares of Net-Gold Services Limited, a
subsidiary of G.M. Network Limited. This entity brokers the payment of purchases made by subscribers, through settlement in gold.
The results of Net-Gold Services Limited’s operations have been included in the consolidated financial statements since that date.
Included in the acquisition is an option to exchange the Group’s shareholding in Net-Gold Services Limited for approximately 14.3%
of the shares in G.M. Network Limited, a non-public company that focuses on the development of patents and other intellectual
property specifically in connection with electronic trading on the Internet. This option is valid until December 31, 2007.

The estimated fair value of the assets and liabilities acquired as part of this transaction were as follows:

$’000

Cash and cash equivalents

1,378

Receivables

44

Inventories

1,034

Accounts payable and accrued liabilities

(655)

Fair value of net assets at date of acquisition

1,801

50.25% thereof

905

Goodwill arising on acquisition

1,095

Consideration

2,000

Less cash and cash equivalents of acquired entity

(1,378)

Net consideration

622

Settled by way of cash and cash equivalents

622

Porgera Joint Venture
With effect from October 14, 2003, the Group acquired the shares in Orogen Minerals (Porgera) Limited, or OMP, and Mineral
Resources Porgera Limited, or MRP. The transaction was affected through the amalgamation of OMP, MRP and the Company’s
wholly-owned subsidiary, Dome Resources (PNG) Limited. OMP changed its name to DRD (Porgera) Limited. This resulted in the
Company acquiring a 20% interest in the Porgera Joint Venture in Papua New Guinea. The Porgera mine’s main business focus is the
extraction of gold.

F-20

4. ACQUISITION AND DISPOSAL OF BUSINESSES (continued)

Porgera Joint Venture (continued)
The estimated fair value of the assets and liabilities acquired as part of this transaction were as follows:

$’000

Cash and cash equivalents

1,219

Receivables

3,036

Taxation receivable

1,877

Inventories

9,504

Mining assets

63,812

Non-current inventories

27,826

Accounts payable and accrued liabilities

(6,659)

Deferred income and mining tax

(19,799)

Provision for environmental rehabilitation

(3,682)

Fair value of attributable net assets at date of acquisition (20% interest)

77,134

Attributable net assets at date of acquisition

77,134

Less cash and cash equivalents of acquired entity

(1,219)

Net consideration

75,915

Settled by way of cash and cash equivalents

59,167

Settled by way of shares issued

16,748

Net consideration

75,915

The fair value of the 6,643,902 no par value shares issued was $16.7 million, determined based on the prevailing market value of
DRDGOLD Limited shares on November 22, 2003 (refer Note 20), in final settlement of the purchase price determined on October 14,
2003.

Fortis Limited
With effect May 21, 2004, the Group acquired the shares in Fortis Limited, or Fortis, a company dealing with insurance and
reinsurance activities, in Papua New Guinea. Fortis was acquired for a consideration of $712,000, the only asset of Fortis being cash
and cash equivalents of $712,000.

2004 disposals

The Group made no disposals during the year.

F-21

5. RELATED PARTY TRANSACTIONS

The Company has related party relationships with its affiliates and with its directors and senior management.

All contracts with related parties for the supply of goods and services are approved in accordance with the Company’s procurement
policies. The contract terms are compared to similar suppliers of goods and services to benchmark that the contract is on market related
terms.

Transactions with Directors

Dr. M. P. Ncholo, chairman of Khumo Bathong Holdings (Pty) Limited, or KBH, was also a Non-Executive Director of the Company
until October 25, 2005. Dr. M. P. Ncholo earned $52,851 in board and other fees from the Company during the year ended
June 30, 2006 (2005: $49,439).

During fiscal 2004, financial assistance was provided by ERPM, the Company’s then 40% associate company with KBH, to the family
of Dr. M. P. Ncholo, with regards to funeral expenses relating to the death of a family member who was a temporary employee of
ERPM. In terms of ERPM’s practice, the funds were advanced on compassionate grounds to assist the family with costs associated
with the funeral. This amounted to $12,441. In fiscal 2006, this amount was written off in the accounts of ERPM.

On June 26, 2006, the Emperor board approved a loan of A$0.4 million ($0.3 million) to Mr. B. Gordon, the Chief Executive Officer
of Emperor, to acquire 1,000,000 shares in Emperor. The approval of the loan was subject to approval by shareholders at Emperor’s
Special General Meeting held in August 2006. The loan was approved by shareholders at this Special General Meeting. The loan is
repayable over 5 years, with 25% of any gross bonus paid to Mr. B. Gordon being directed as a loan repayment until such time as the
loan is repaid in full. The loan was entered into on an arm’s-length basis and on market related terms and bears interest at the ANZ
Bank published bank bill rate plus 1% per annum.

Transactions with affiliates

During the year ended June 30, 2006, the Company earned $0.7 million (2005: $0.5 million and 2004: $1.0 million) in management
fees from Crown and $0.7 million (2005: $0.5 million and 2004: $2.0 million) in management fees from ERPM, $1.6 million (2005:
$1.9 million and 2004: $2.1 million), up to December 1, 2005 after which Crown and ERPM were consolidated as subsidiaries.

At June 30, 2006, KBH owed the Company $nil (2005: $1.2 million). Interest amounting to $0.1 million (2005: $0.1 million) was
payable to the Company on the loan to KBH for the year ended June 30, 2006. No interest income on the loan was recorded as it was
not considered to be recoverable. No dividends were received from associates in fiscal 2006, fiscal 2005 or fiscal 2004.

On July 11, 2005, Emperor finalized an A$10.0 million ($7.6 million) Convertible Loan facility with the Company. The Company
advanced these funds to Emperor in July 2005. The Convertible Loan facility carries an interest rate of 9% per annum and is repayable
by December 31, 2007. The facility is convertible, at any time, at the Company’s election into fully paid shares of Emperor at
conversion price equal to the lower of A$0.30 ($0.23) per share or the 45 day volume weighted average price of Emperor shares on
ASX prior to the date of conversion. The outstanding balance on this loan at June 30, 2006 is eliminated on consolidation.

Rand Refinery agreement
On October 12, 2001, the Group entered into an agreement with Rand Refinery Limited, or Rand Refinery, for the refining and sale of
all of its gold produced in South Africa. Under the agreement, Rand Refinery performs the final refining of the Group’s gold and casts
it into troy ounce bars. Then, Rand Refinery sells the gold on the same day as delivery, for the London afternoon fixed price on the day
the gold is sold. In exchange for this service, the Group pays Rand Refinery a variable refining fee plus fixed marketing, loan and
administration fees. Mr. D.J. Pretorius, the Group Legal Counsel, is also a Director of Rand Refinery and is a member of their Audit
Committee. Also, Mr. I.D. Graulich, the Group’s Strategic Development Officer, is Alternate Director to Mr. D.J. Pretorius. The
Group currently owns 4% (2005: 3%) of Rand Refinery (which is jointly owned by South African mining companies). During the year,
all gold produced in South Africa was refined by Rand Refinery and as at year-end no balances owed by or to this entity.

Mr. C. Press loan
During fiscal 2003, Mr. C. Press, a director of Net-Gold Services (Pty) Limited, or Net-Gold, a consolidated subsidiary, loaned an
amount of US$24,946 to Net-Gold. This loan is interest free, unsecured and has no fixed terms of repayment. The funds were used for
short-term working capital advances. As at June 30, 2006, the full balance was still outstanding.

F-22

5. RELATED PARTY TRANSACTIONS (continued)

Western Areas Limited
Western Areas Limited was also a related party because Mr. R.A.R Kebble, a director of Western Areas Limited, was also a director of
the Company.

On or about October 9, 2001, the Company concluded a contract of guarantee and cession as security for payment with Investec Bank
Limited, or Investec. Under the terms of this agreement, the Company agreed to guarantee Western Areas Limited’s, or WAL’s,
obligations to Investec up to the value of the Sale Shares (being ordinary shares of Randgold, JCI and CAM acquired by the Company
between December 14, 1999 and January 11, 2000). Also, the Company ceded the Sale Shares, as security, to and in favor of Investec
allowing Investec to sell the Sale Shares in the event that WAL defaulted.

On or about September 26, 2001, the Sale Shares were ceded to Investec and WAL granted the Company a put option in respect of the
Sale Shares at a total price of at least R116.4 million ($13.3 million). CAM and JCI undertook to apply all dividends received from
WAL in respect of their shareholdings to the reduction of all amounts owed by them to the Company. The parties agreed that the
monthly option fee would be payable to exercise their rights under the call option for the duration of the Company’s guarantee and
cession and agreed that if Investec exercised its rights under that guarantee, the rights of CAM and JCI under the call option would
terminate.

The option fee payable to the Company by CAM and JCI for the period of November 2001 up to December 13, 2001 amounted to
R21.6 million ($2.0 million) plus VAT in the amount of R3.0 million ($0.3 million) plus interest in the amount of R1.7 million
($0.2 million) at the prescribed rate of 15.5% per annum from January 25, 2001 to the date of payment.

On December 13, 2001, the Company invoiced JCI on behalf of JCI and CAM in these amounts. On December 14, 2001, the Company
made a demand on CAM and JCI for the amount of R32.8 million ($3.0 million). On December 24, 2001, the Company’s attorney’s
made demands on CAM and JCI for the same amount. The Company instituted legal proceedings against JCI and CAM for the
recovery of these amounts. The matter was heard on August 30, 2004. At this date partial settlement of certain small claims related to
the larger JCI and CAM claim, to the value of R2.4 million ($0.4 million), was awarded by the High Court of South Africa, however
the Company had provided in full in the financial year ended June 30, 2002, for the balance outstanding by CAM against the probable
bad debt. Refer Note 10.

On October 21, 2004, the High Court of South Africa ordered JCI and CAM to pay the Company an amount of R35.7 million
($5.5 million), plus interest and costs, including the costs of two counsel. JCI’s and CAM’s counterclaim to recover the earlier part-
payment was also dismissed with costs. JCI and CAM made an application to the High Court of South Africa for leave to appeal,
which was rejected. In March 2005, the Company received a payment of R37.3 million ($6.6 million) in settlement of all claims. Of
this amount R31.5 million ($5.1 million) was recorded as a reversal of the doubtful debt allowance in the statement of operations and
R5.8 million ($1.5 million) was recognized as interest income.

Laverton Gold NL
Laverton Gold NL was also a related party because Mr. J. Stratton, a director of CAM and Consolidated African Mines Jersey, or
CAMJ, was a corporate advisor to the Company.

In May 2000, the Company’s board appointed a special committee to investigate irregular related party transactions involving Mr. J.
Stratton from the Company’s office in Perth, Australia (which has now been closed). The related party transactions involved the
issuance of approximately 8.2 million Company ordinary shares (the “Rawas Shares”) in exchange for assets of the Rawas group that
owned the Rawas gold mine in Indonesia, pursuant to agreements between the Company and Laverton Gold NL, an Australian listed
company.

During July and October 1999, the Company allotted and issued the Rawas Shares at the market value of $12.4 million to several
creditors of Laverton or its subsidiaries, including CAMJ, JCI and related companies, in anticipation of receiving shares of, and claims
against, the companies in the Rawas Group and the rights to the Rawas mine. The allocation of the Rawas Shares was based on each
creditor’s relative exposure. No proper valuation proceedings were conducted prior to the issuance.

F-23

5. RELATED PARTY TRANSACTIONS (continued)

According to the evidence gathered during the course of the investigation, the Company’s board determined that, faced with pressure
from its creditors (i) Laverton arranged the issue by the Company of its ordinary shares to creditors in consideration for assets of no
value, for the benefit of Laverton and its creditors and not for the Company; (ii) to avoid the South African Companies Act
requirement for a special resolution, the Company had issued the Rawas Shares at an inflated issue price unrelated to the true value of
the consideration; (iii) as the special resolution was not obtained, the allotment and issue of ordinary shares for the Rawas transaction
was unlawful and invalid. Upon discovery by the board of the unlawful transactions, the board decided to rescind the agreements with
Laverton NL during fiscal 2001. At that time, the Company had received ownership of the claims against, but not the shares of, the
companies in the Rawas Group. As a result of this rescission the shares of the Rawas Group were never delivered to the Company.

Because of subsequent splits and consolidations resulting in validly issued ordinary shares being consolidated with invalid Rawas
Shares, it was not possible to distinguish the Rawas Shares from the other issued ordinary shares of the Company. None of the Rawas
Shares, and their holders at the time, could be identified and, therefore, none of the Rawas Shares could be removed from the
Company’s members’ register. In July 2002 the High Court of South Africa validated the Rawas shares.

The $12.4 million value of the Rawas shares was credited to stated capital in the financial statements. During fiscal 2000, the Company
wrote off the attributed $12.4 million value of the shares in the statement of operations as aborted acquisition costs and loans made by
the Company to members of the Rawas Group, amounting to $2.9 million, as no amounts have been recovered on these loans.

The Company has instituted various legal proceedings in South Africa and Australia in connection with these related party transactions
and these proceedings are still ongoing. Due to the uncertainty of the outcome of the legal proceedings, the Company has not recorded
any amounts in respect of this litigation.

Issue of shares to Khumo Bathong Holdings (Pty) Limited
KBH subscribed for 4,794,889 of the Company’s ordinary shares for a cash subscription price of $6.8 million during the year ended
June 30, 2003. These shares were sold by KBH in fiscal 2005.

6. EMPLOYMENT TERMINATION COSTS

Year

ended

Year

ended

Year

ended

June 30,

2006

June 30,

2005

June 30,

2004

$’000

$’000

$’000

Vatukoula (a)

722

-

-

Blyvoor (b)

-

3,051

899

Other (c)

153

1,150

-

875

4,201

899

(a) Vatukoula temporarily shut down in April 2006 for restructure and all employees except the essential service workers were stood

down. On April 24, 2006, employees were called back in lots of 150 to 200 and were put through the restructure induction. This
was completed at the end of June 2006, when all employees, except for 120 employees that were retrenched at a cost of $0.7
million, had been recalled. No balance was outstanding with regards to these payments as at June 30, 2006.

(b) On June 28, 2004, the Company entered into a 60-day review period at the Blyvoor Mine designed to restore the operations to

profitability. The 60-day review was extended to September 13, 2004. On October 5, 2004, 1,619 employees were retrenched at a
cost of $3.1 million. No balance was outstanding with regards to these payments as at June 30, 2005.

During fiscal 2004, voluntary retrenchments were offered to employees and approximately 220 employees accepted the offer. This
gave rise to an expense of $0.9 million for the year ended June 30, 2004. No balance was outstanding with regards to these
payments as at June 30, 2004.

(c) In fiscal 2006, four employees that had been seconded to the Company’s North West Operations, were retrenched at a cost of $0.2

million. No balance was outstanding with regards to these payments as at June 30, 2006.

In an effort to reduce corporate costs, retrenchments were made at the Company’s corporate head office during fiscal 2005.
Retrenchment costs for 20 employees amounted to $1.2 million. No balance was outstanding with regards to these payments as at
June 30, 2005.

F-24

7. IMPAIRMENT OF ASSETS

Year

ended

Year

ended

Year

ended

June 30,

2006

June 30,

2005

June 30,

2004

$’000

$’000

$’000

Other assets (a)

3

-

1,965

Mining assets

- Durban Deep Mine (b)

-

664

-

Goodwill (c)

-

-

1,025

3

664

2,990

(a) Consistent with the Group’s black economic empowerment strategy, the West Wits Operations’ assets were sold during fiscal

2003 to a black economic empowerment partner, Bophelo Trading (Pty) Limited, subsequently renamed Mogale Gold (Pty)
Limited, or Mogale. During fiscal 2004, Mogale was placed under judicial management and the balance of the purchase price
owed of $1.2 million was therefore seen to be irrecoverable.

Also during fiscal 2004, funds advanced to Khumo Bathong Holdings (Pty) Limited of $0.8 million were determined to be
impaired as the most significant asset owned by this entity was its 60% interest in Crown and ERPM, which were experiencing
liquidity problems in fiscal 2004.

(b) During fiscal 2005, real estate located at the Durban Deep Mine was written down by $0.7 million to $2.2 million, being the

estimated fair value of these assets. The Company had negotiated the sale of this real estate and the fair value was determined
during those negotiations.

(c) As a result of the losses recorded by Net-Gold Services Limited, goodwill recorded on the acquisition was impaired in fiscal 2004.

F-25

8. DEFERRED INCOME AND MINING TAX

Year

ended

Year

ended

Year

ended

June 30,

2006

June 30,

2005

June 30,

2004

$’000

$’000

$’000

Loss from continuing operations before tax and other items

South Africa

(11,630)

(33,233)

(22,427)

Foreign

9,043

22,078

10,545

(2,587)

(11,155)

(11,882)

(a) Income and mining tax (expense)/benefit

Current income and mining tax

Foreign

(2,246)

(12,315)

(7,165)

Current non-mining income tax

South Africa

621

(263)

(223)

Foreign

-

24

-

Deferred income and mining tax

South Africa

-

-

(5,532)

Foreign

(1,674)

6,792

(1,310)

Secondary tax on companies

-

-

-

Total income and mining tax expense from continuing operations

(3,299)

(5,762)

(14,230)

Mining tax on mining income in South Africa is determined based on a formula which takes into account the profit and revenue from
mining operations during the year. Non-mining income, which consists primarily of interest, is taxed at a standard rate. The tax rates
applicable to the mining and non-mining income of a gold mining company depends on whether the company has elected to be exempt
from the Secondary Tax on Companies, or STC. STC is a tax on dividends declared, which is payable by the company declaring the
dividend, and, at present, the STC tax rate is equal to 12.5%. In 1993, all existing gold mining companies had the option to elect to be
exempt from STC.

If the election was made, a higher tax rate would apply for both mining and non-mining income. In fiscal 2006 the tax rates for taxable
mining and non-mining income, for companies that elected the STC exemption were 45% (2005 and 2004: 46%) and 37% (2005 and
2004: 38%), respectively. During those same years the tax rates for companies that did not elect the STC exemption were 35% (2005
and 2004: 37%) and 29% (2005 and 2004: 30%), respectively. In 1993, the Company elected not to be exempt from STC, as this
would have meant that the Company would have been liable for normal taxation at the higher rates of 45% for mining income and 37%
for non-mining income. The Company, having chosen not to be subject to the STC exemption, is subject to 35% tax on mining income
and 29% for non-mining income. However, with the exception of Blyvoor and ERPM, all of the Company’s South African subsidiaries
elected the STC exemption.

The tax rate for all the Australasian operations is 30%.

F-26

8. DEFERRED INCOME AND MINING TAX (continued)

South African deferred taxation has been provided at the effective mining rate applicable in terms of the mining tax formula to the
relevant operations at either 35% or 45% (2005 and 2004: 37% or 46%), while the Australasian deferred tax has been provided at the
statutory tax rate of 30% (2005 and 2004: 30%). Material items causing the Group’s income tax provision from continuing operations
to differ from the estimated effective mining tax rates were as follows:

Year

ended

Year

ended

Year

ended

June 30,

2006

June 30,

2005

June 30,

2004

$’000

$’000

$’000

Mining tax at estimated effective rate

(596)

4,686

3,646

Non-mining tax at statutory rate

(25,883)

6,855

5,763

Foreign tax at statutory rates

29,794

(6,979)

(6,545)

Taxation at normal rates

3,315

4,562

2,864

Non-deductible expenditure

(9,690)

(1,653)

(21)

Non-taxable income

3,582

1,626

49

Additional tax expense relating to the prior year

(251)

(212)

(223)

Valuation allowances

(255)

(10,085)

(16,899)

Income and mining tax expense as reported

(3,299)

(5,762)

(14,230)

(b) Deferred income and mining tax liabilities and assets:

June 30,

2006

June 30,

2005

$’000

$’000

South Africa

Deferred income and mining tax liabilities and assets on the balance sheet

as of June 30, 2006 and 2005, relate to the following:

Gross deferred income and mining tax liabilities:

Mining assets

(29,902)

(19,565)

Gross deferred income and mining tax assets:

127,997

49,957

Assessable tax loss carried forward

30,610

33,483

Unredeemed capital expenditure

74,412

12,098

Provision for environmental rehabilitation

10,932

2,056

Other provisions

12,043

2,320

Deferred income and mining tax valuation allowances

(98,095)

(30,392)

Deferred income and mining tax assets

-

-

Net deferred income and mining tax liability – long-term

(2,813)

(909)

Net deferred income and mining tax asset – current

2,813

909

F-27

8. DEFERRED INCOME AND MINING TAX (continued)

June 30,

2006

June 30,

2005

$’000

$’000

Australasia

Deferred income and mining tax liabilities and assets on the balance sheet

as of June 30, 2006 and 2005, relate to the following:

Gross deferred income and mining tax liabilities:

(17,416)

(19,126)

Mining assets

(15,018)

(17,731)

Inventories

(2,398)

(1,314)

Other

-

(81)

Gross deferred income and mining tax assets:

4,759

4,906

Assessable tax loss carried forward

-

201

Provision for environmental rehabilitation

4,611

2,378

Other provisions

148

2,327

Deferred income and mining tax valuation allowances

-

(97)

Deferred income and mining tax liabilities

(12,657)

(14,317)

Net deferred income and mining tax liability – long-term

(10,407)

(15,203)

Net deferred income and mining tax (liability)/asset – current

(2,250)

886

Total

Deferred income and mining tax liabilities and assets on the balance sheet

as of June 30, 2006 and 2005, relate to the following:

Gross deferred income and mining tax liabilities:

(47,318)

(38,691)

Mining assets

(44,920)

(37,296)

Inventories

(2,398)

(1,314)

Other

-

(81)

Gross deferred income and mining tax assets:

132,756

54,863

Assessable tax loss carried forward

30,610

33,684

Unredeemed capital expenditure

74,412

12,098

Provision for environmental rehabilitation

15,543

4,434

Other provisions

12,191

4,647

Deferred income and mining tax valuation allowances

(98,095)

(30,489)

Deferred income and mining tax liabilities

(12,657)

(14,317)

Net deferred income and mining tax liability – long-term

(13,220)

(16,112)

Net deferred income and mining tax asset – current

563

1,795

The classification of deferred income and mining tax assets and liabilities is based on the related asset or liability creating the deferred
tax. Valuation allowances have been provided on deferred tax assets arising out of assessed losses and unredeemed capital expenditure
because it is more likely than not that these losses and unredeemed capital expenditures will not be utilized in the foreseeable future.

The valuation allowance was $82.2 million as of July 1, 2003. During the years ending June 30, 2006, 2005 and 2004, the valuation
allowance increased by $67.6 million, decreased by $65.9 million and increased by $14.2 million, respectively. These movements
include foreign exchange differences.

F-28

8. DEFERRED INCOME AND MINING TAX (continued)

As at June 30, 2006 and June 30, 2005 the Group had estimated tax losses carried forward consisting of:

Unredeemed

capital

Tax losses

expenditure

2006

2005

2006

2005

$’m

$’m

$’m

$’m

The Company

14.4

28.2

18.1

19.8

South African subsidiaries

75.0

67.7

193.2

16.6

Australasian subsidiaries

-

0.6

-

-

Total

89.4

96.5

211.3

36.4

The estimated tax losses of the Company and its subsidiaries have no expiry date. Should a subsidiary cease to trade, the estimated tax
losses would be forfeited.

Unremitted earnings of foreign subsidiaries and foreign joint ventures

No provision has been made for South African income tax or foreign tax that may result from future remittances of undistributed
earnings of foreign subsidiaries or the joint venture because it is expected that such earnings will be permanently reinvested in these
foreign entities.

The distribution of these undistributed earnings of $8.9 million at June 30, 2006, by DRD (Isle of Man), in Isle of Man, Porgera and
Tolukuma in Papua New Guinea and Vatukoula in Fiji, and other foreign entities would result in income and foreign withholding taxes
of approximately $2.7 million.

9. PROFIT/(LOSS) FROM DISCONTINUED OPERATION

The results of Buffelsfontein Gold Mines Limited from July 1, 2004 to March 22, 2005 and the gain on disposal are reported as a
discontinued operation. The Group’s consolidated statement of operations for the year ending June 30, 2004 has been adjusted to
reflect this presentation (refer to Note 4 for a more detailed discussion on the discontinued operation).

The operating results for the discontinued operation are as follows:

Year ended

Year ended

Year ended

June 30, 2006

June 30, 2005

June 30, 2004

$’000

$’000

$’000

Revenues

-

81,538

130,036

Loss before tax

-

(62,464)

(20,804)

Income and mining tax expense

-

-

-

Loss after tax

-

(62,464)

(20,804)

The gain on disposal of the discontinued operation is as follows:

Cash proceeds received

-

-

-

Costs recovered/(incurred) on disposal

2,850

(7,265)

-

Net liabilities disposed of

-

17,751

-

Foreign currency translation gain realized

-

7,619

-

Gain on disposal of discontinued operation

2,850

18,105

-

The profit/(loss) from discontinued operation is made up as follows:

Loss after tax

-

(62,464)

(20,804)

Gain on disposal of discontinued operation

2,850

18,105

-

Income tax

(827)

-

-

Profit/(loss) from discontinued operation, net of tax

2,023

(44,359)

(20,804)

F-29

10. RECEIVABLES

June 30,

2006

June 30,

2005

$’000

$’000

Trade accounts receivable

12,383

5,156

Less: allowances for doubtful debts – trade accounts receivable

(1,526)

(932)

Interest receivable

-

2

Taxation receivable

1

1,254

Receivable from associates – management fee

-

579

Amounts owing by related parties (a)

-

-

Less: allowances for doubtful debts – related parties

-

-

Current receivables

10,858

6,059

Non-current receivables

Amounts owing by related parties (b)

726

789

Less: allowances for doubtful debts – related parties

(726)

(789)

Total receivables

10,858

6,059

Disclosed as current receivables

10,858

5,480

Disclosed as current receivables owing by related parties

-

579

10,858

6,059

June 30,

2006

June 30,

2005

June 30,

2004

Reconciliation of allowances for doubtful debts – related parties

$’000

$’000

$’000

Opening balance

789

5,865

4,220

(Credit)/charge to statement of operations

-

(5,067)

765

Foreign exchange

(63)

(9)

880

Closing balance

726

789

5,865

June 30,

2006

June 30,

2005

June 30,

2004

Reconciliation of allowances for doubtful debts – trade accounts receivable

$’000

$’000

$’000

Opening balance

932

93

353

Charge/(credit) to statement of operations

757

907

(298)

Foreign exchange

(163)

(68)

38

Closing balance

1,526

932

93

(a) Amounts owing by related parties comprise amounts due from CAM for the option over the Sale Shares, which were fully

provided for in fiscal 2004. In March 2005, the Company received a payment of R37.3 million ($6.6 million) as settlement of all
claims.

(b) Amounts owing by KBH arising from the sale of 60% of Crown. These loans had been fully provided for in fiscal 2005.

F-30

11. INVENTORIES

June 30,

2006

June 30,

2005

$’000

$’000

Gold-in-progress

17,144

4,174

Supplies

11,571

11,281

Ore stock pile

30,159

32,103

58,874

47,558

Less: non-current inventories (Ore stock pile)

(30,159)

(32,103)

28,715

15,455

12. MINING ASSETS

June 30,

2006

June 30,

2005

$’000

$’000

Mining properties, mine development costs and mine plant facilities and equipment

Cost

386,206

288,000

Opening balance

288,000

327,115

Impairment

-

(63,576)

Additions

40,957

24,863

Asset retirement obligation raised

7,499

-

Disposals

(100)

(2,178)

Acquired through business combinations

134,197

-

Disposed through disposal of subsidiary

(1,126)

(309)

Transfer to mining assets held for sale

(58,545)

-

Foreign exchange

(24,676)

2,085

Accumulated depreciation and amortization

(132,692)

(165,830)

Opening balance

(165,830)

(170,172)

Impairment

-

23,461

Depreciation and amortization – continuing operations

(24,776)

(13,797)

Depreciation and amortization – discontinued operation

-

(971)

Disposals

3

-

Disposed through disposal of subsidiary

606

309

Transfer to mining assets held for sale

56,482

-

Foreign exchange

823

(4,660)

Net book value

253,514

122,170

Certain assets, with a net book value of $99.8 million, have been pledged as security for long-term borrowings. Refer to Note 19.

Included in mining assets are deferred stripping costs as follows:

June 30,

2006

June 30,

2005

$’000

$’000

Deferred stripping costs

Cost

28,002

15,135

Opening balance

15,135

4,075

Additions

12,867

11,060

Accumulated amortization

(4,409)

(2,658)

Opening balance

(2,658)

(548)

Amortization

(1,751)

(2,110)

Net book value

23,593

12,477

F-31

13. NON-CURRENT ASSETS

June 30,

2006

June 30,

2005

$’000

$’000

Listed investments (a)

209

101

Cape Tel Limited

-

1

Drillsearch Energy Limited

203

92

Startrack Communications Limited

6

8

Unlisted investments (b)

769

670

Rand Refinery Limited

769

562

The Employment Bureau of Africa

-

57

Other

-

51

Amounts contributed to environmental trust funds (c)

8,306

6,416

9,284

7,187

(a) These investments are classified as available for sale, and are accounted for at fair value with unrealized gains and losses related

to these investments included in accumulated other comprehensive loss as summarized below for the year ended June 30:

June 30,

2006

June 30,

2005

$’000

$’000

Gross unrealized holding gains

117

-

Gross unrealized holding losses

-

-

Realized gains of $0.1 million, $0.5 million and $0.1 million were recorded in fiscal 2006, fiscal 2005 and fiscal 2004,
respectively.

(b) Unlisted investments comprise investments in various unlisted companies, the fair value of which is not directly available from

market quotations. The directors of the Company perform valuations of the investments on an annual basis to ensure that an other
than temporary decline in the value of the investments has not occurred.

(c) Amounts have been contributed to irrevocable trusts under the Company’s control. The monies in the trust are invested primarily

in interest bearing debt securities and equity-limited unit trusts and may be used only for environmental rehabilitation purposes.

14. JOINT VENTURE

The unincorporated mining joint venture for which the statement of operations and balance sheet has been proportionately
consolidated is as follows:

2006

2005

percentage held

percentage held

Porgera Joint Venture

20%

20%

Together with Barrick Gold Corporation and Mineral Resources Enga, DRD (Porgera) Limited, is a participant in the Porgera Joint
Venture. Each joint venture partner has an undivided holding in the mineral tenements forming part of the mine, and in a proportionate
share of the mine’s production and costs, through a joint venture agreement. Each joint venture partner is responsible for the sale of
their proportionate share of production.

F-32

14. JOINT VENTURE (continued)

The summarized financial statements of DRD (Porgera) Limited reflect the revenue received for their 20% share of production at the
mine, as well as administrative costs, including depreciation and amortization, and taxation incurred by DRD (Porgera) Limited, in
addition to their proportionate share of the costs incurred by the joint venture.

The Group acquired its 20% interest in the Porgera Joint Venture in Papua New Guinea on October 14, 2003.

Summarized financial statements of DRD (Porgera) Limited, including the joint venture which has been proportionately consolidated,
are as follows:

June 30,

2006

June 30,

2005

Statement of operations

$’000

$’000

Revenues

64,925

82,793

Costs and expenses

(39,302)

(37,451)

Production costs

(35,685)

(36,209)

Movement in gold in process

(1,877)

1,182

Movement in rehabilitation provision, reclamation and closure costs

(1,740)

(2,424)

Other operating expenses

Depreciation and amortization

(8,511)

(11,613)

Selling, administration and general charges

(9,169)

(4,350)

Net operating income

7,943

29,379

Interest and dividends

69

164

Interest expense

(1,092)

(1,044)

Profit before tax

6,920

28,499

Income and mining tax expense

(4,093)

(5,515)

Net profit

2,827

22,984

Balance sheet

Current assets

25,847

20,687

Cash and cash equivalents

9,206

7,956

Receivables

2,201

1,546

Receivables owing by group companies

3,075

2,126

Inventories

11,365

9,059

Mining assets

48,519

66,238

Other assets

30,149

32,103

Non-current inventories

30,149

32,103

Total assets

104,515

119,028

Current liabilities

(13,136)

(28,914)

Accounts payable and accrued liabilities

(9,466)

(12,461)

Payables owing to group companies

-

(10,965)

Income and mining taxes payable

(3,670)

(5,488)

Non-current liabilities

(37,758)

(23,132)

Deferred income and mining tax

(8,831)

(14,308)

Provisions for environmental rehabilitation, reclamation and closure costs

(7,601)

(8,824)

(21,326) -

Net assets

53,621

66,982

F-33

15. INVESTMENTS IN ASSOCIATES

The associates were:

June 30,

2005

Country of incorporation

percentage

held

Emperor Mines Limited

Australia

45.33%

Crown Gold Recoveries (Pty) Limited

South Africa

40.00%

June 30,

2006

June 30,June 30,

2005 2004

$’000

$’000 $’000

Opening carrying amount

15,442

10,015

Acquired during the year

4,501

25,191

Net share of results in associates

(15,442)

(7,231)

Share of results before tax

(15,142)

(7,173)

Share of tax

(300)

(58)

Foreign exchange

-

747

Impairment of investment in associates

(4,501)

(13,280)

Closing carrying amount

-

15,442

The following has been recognized in the statement of operations:

Equity in loss from associates

Losses applied to advances to associates

(15,442)

(7,231) (3,148)

Impairment of investment in associates

(4,501)

(13,280) -

(19,943)

--(8,827)

(20,511) (11,975)

On July 30, 2004, the Company’s shareholding in Emperor increased from 19.78% to 45.33% (refer to Note 4). The Company restated
the prior year’s financial statements as if the equity method had been utilized from December 2002, the date of the initial acquisition
of the investment in Emperor (refer to Note 2). The amounts included for the years ended June 30, 2005 and June 30, 2004 represent
45.33%, from August 2004, and 19.78% of Emperor’s losses or profits respectively, adjusted for the amortization of the excess
purchase price. As a result of losses incurred by Emperor, the investment in Emperor was impaired, by $13.3 million, to fair value
during fiscal 2005.

At June 30, 2005 the proportionate share of the Company’s investment in the net assets of Emperor, as well as the unamortized excess
purchase price of Emperor, was as follows:

June 30,

2005

$’000

Proportionate share of Emperor’s net assets

13,517

Excess purchase price, net of accumulated amortization

1,925

Closing carrying amount

15,442

Market value of the Company’s investment in Emperor (based on the quoted market
price at June 30, 2005)

12,525

On April 6, 2006 a transaction was concluded between Emperor and the Company, whereby the Company’s offshore assets were sold
to Emperor, resulting in the Company’s shareholding in Emperor increasing to 88.27% with effect from the above date (refer Note 4).
As a result, Emperor became a subsidiary with effect from that date and its results are accordingly now consolidated.

From July 1, 2002, the Company’s 40% interest in Crown has been treated as an investment in an associate and equity accounted. As
at June 30, 2005, the investment in Crown was carried at $nil. In November 2005, the Group acquired an additional 60% of the shares of
Crown from Khumo Bathong Holdings (Pty) Limited (refer Note 4). As a result, Crown became a subsidiary with effect from that date
and its results are accordingly now consolidated.

On July 1, 2005, an agreement was entered into between the Company and the Industrial Development Corporation of South Africa, or
IDC, in terms of which the Company acquired all the IDC loans, including the rights securing payment of such loans, payable by
Crown and ERPM to the IDC for a purchase consideration of $4.5 million. As uncertainty over the repayment of the loans existed
subsequent to their acquisition, an allowance of $4.5 million was raised.

F-34

15. INVESTMENTS IN ASSOCIATES (continued)

Aggregated summarized financial information in respect of our associates is as follows:

June 30,      June 30,

20052004

$’000           $’000

Revenues

144,686 141,437

Net operating loss

(17,666) (23,509)

Net loss applicable to common stockholders

(26,593) (30,934)

Current assets

20,981

Non-current assets

60,294

Total Assets

81,275

Current liabilities

54,178

Non-current liabilities

102,158

Total Liabilities

156,336

16. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

June 30,

2006

June 30,

2005

$’000

$’000

Trade accounts payable

42,118

22,130

Accrual for leave pay provisions

8,862

4,354

Payroll and other compensation payable

346

6,833

Withholding taxes

1,343

-

52,669

33,317

17. DERIVATIVE INSTRUMENTS

June 30,

2006

June 30,

2005

$'000

$'000

Interest rate swap agreements (a)

104

(550)

Forward sale commodity contract (b)

(25,326)

-

Option contract (c)

2,857

-

(22,365)

(550)

Disclosed under non-current liabilities

-

(550)

Disclosed under current liabilities

(25,222)

-

Disclosed under current assets

2,857

-

(22,365)

(550)

F-35

17. DERIVATIVE INSTRUMENTS (continued)

Unrealized and realized profits/(losses) related to derivative instruments that are included in the statement of operations are as follows:

June 30,

2006

June 30,

2005

June 30,

2004

$’000

$’000

$’000

Interest rate swap agreements (a)

(5)

187

(1,730)

Forward sale commodity contract (b)

4,412

-

-

Option contract (c)

967

-

-

Change in fair value of derivative portion of Senior Convertible Notes (refer to Note 19)

5,382

3,817

2,064

Eskom gold for electricity contract

11

(388)

(1,376)

10,767

3,616

(1,042)

Unrealized profits/(losses) on derivative instruments

10,761

4,004

(1,042)

Realized profits/(losses) on derivative instruments

6

(388)

-

10,767

3,616

(1,042)

(a)   The amount in fiscal 2006 reflects the fair value of the interest rate swap contracts that were entered into to manage the interest rate

risk on the interest payments of the Vatukoula loan facility with ANZ Bank, which currently bears interest at an average variable rate
of 7.76% per annum. The fair value of the interest rate swap contracts at the date of acquisition of Emperor was $0.1 million. In order
to minimize fluctuations in interest rates, 64% of the loan has been covered by entering into interest rate swap contracts, under which
the Group is obliged to receive interest at variable rates and pay interest at fixed rates until October 2008. The fixed interest rate
payable was 4.34% per annum.

In fiscal 2005, this amount reflects the fair value of the interest rate swap agreement that was entered into to manage the interest rate
and currency risk on the bi-annual interest payments of the Senior Convertible Notes which were issued in fiscal 2003. The fair value
represents the difference between the fixed coupon rate of 6% per annum and the forward Johannesburg Inter-bank Acceptance Rate,
or JIBAR, plus 200 interest basis points together with the spot and forward US$ exchange rate with reference to the coupon amount
payable bi-annually. At June 30, 2005, the six month JIBAR rate was 6.929% per annum. On November 12, 2005 this contract was closed out.

The interest rate swap agreements have not been accounted for as hedges. Changes in fair value have been recorded as profit/(loss) on
derivative instruments in the statement of operations. During fiscals 2006, 2005 and 2004, the realized and unrealized gain/(loss)
included in (loss)/profit on the interest rate swap amounted to a gain of $nil, a gain of $0.2 million and a loss of $1.7 million,
respectively.

(b) This liability represents gold forward contracts with ANZ Banking Group Limited and Emperor, which was consolidated fromApril 6, 2006. The fair value of the gold forward contracts at the date of acquisition of Emperor was $34.5 million. These gold
forward contracts have not been accounted for as hedges. The total ounces to be delivered under the gold forward contracts for the
Group is 145,695 ounces and the delivery into these derivative instruments will be in accordance with the maturity schedule agreed with
the corresponding bank as follows:

Year ended

Strike price

June 30, 2007

June 30, 2008

June 30, 2009

$452.70

41,526 oz

82,992 oz

21,177 oz

The fair value of the derivative financial instruments that is expected to mature within the coming year is $7.2 million (A$9.9 million)
relating to 41,526 ounces. The remaining fair value of $18.1 million (A$24.8 million) is to be settled after June 30, 2007.

Changes in fair value have been recorded as profit/(loss) on derivative instruments in the statement of operations. During fiscal 2006,
the unrealized gain/(loss) included in (loss)/profit on gold forward contracts amounted to a gain of $4.4 million.

F-36

17. DERIVATIVE INSTRUMENTS (continued)

(c) This amount represents the positive mark-to-market on gold call options in DRD (Isle of Man). European Style call options were

purchased in January 2006 with strike prices ranging from $634 to $653 per ounce. Expiry dates of the options range from September
2006 to December 2008. The call options provide the group with the right but not the obligation to buy in total up to 46,426 ounces
(reducing throughout the period) of gold at the various strike prices. The gold call options were taken up by the Company to mitigate
the deterioration in the forward sale commodity contracts referred to above. The settlement schedule for the gold call options is as
follows:

Year ended

Strike price

June 30, 2007

June 30, 2008

June 30, 2009

$634.00

6,920 oz

4,150 oz

536 oz

$645.80

13,842 oz

8,298 oz

1,074 oz

$652.50

6,920 oz

4,150 oz

536 oz

27,682 oz

16,598 oz

2,146 oz

Changes in fair value have been recorded as profit/(loss) on derivative instruments in the statement of operations. During fiscal 2006,
the unrealized gain included in profit on derivative instruments was $1.0 million.

18. PROVISION FOR ENVIRONMENTAL REHABILITATION, RECLAMATION AND CLOSURE COSTS

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, the Group has estimated that the total future
costs for the mines, in current monetary terms, will be $82.0 million at June 30, 2006 (2005: $25.8 million). The estimates are
prepared on an annual basis by the Group's Environmental Manager in accordance with the Company's rehabilitation plans. The
relevant rehabilitation plan is submitted to local authorities for approval and the provision is adjusted accordingly to reflect changes
therein.

Amounts have been contributed to irrevocable trusts (refer Note 13) under the Group's control. The monies in the trusts are invested
primarily in interest bearing debt securities and may be used only for environmental rehabilitation purposes. The Group intends to
finance the ultimate rehabilitation costs from the money invested with the trust funds, as well as, at the time of mine closure, the
proceeds on sale of remaining assets and gold from plant clean-up.

June 30,

2006

June 30,

2005

$'000

$'000

Opening balance

22,596

39,107

Foreign exchange

(6,906)

(360)

Assumed in business combinations

21,154 -

Disposed through liquidation of subsidiary

-

(19,911)

Asset retirement obligation arising during period

7,499

-

Accretion - continuing operations

2,434

2,737

Accretion - discontinued operation

-

1,023

Closing balance

46,777

22,596

Included in the net book value of the mining asset balance are asset retirement obligation costs, relating to the following mines:

June 30,

2006

June 30,

2005

$'000

$'000

Blyvoor

1,315

269

ERPM

141

-

Crown

5,716

-

Porgera

2,180

5,040

9,352

5,309

F-37

19. LONG-TERM LOANS

June 30,

2006

June 30,

2005

$'000

$'000

These comprise loans from:

Secured

Industrial Development Corporation (a)

2,665

4,025

Investec Bank (Mauritius) Limited (b)

-

10,020

ANZ Banking Group Limited (c)

56,015

-

Finance lease agreements (d)

764

-

Unsecured

Senior Convertible Notes (e)

66,925

64,947

126,369

78,992

Less: Payable within one year shown under current liabilities

(76,117)

(9,678)

Total long-term liabilities

50,252

69,314

The above loans include accrued interest. The terms and conditions, including interest rates, attaching to the above loans are given in
the narrative below:

(a)   On July 18, 2002, Blyvooruitzicht Gold Mining Company Limited, or Blyvoor, entered into a loan agreement with the Industrial

Development Corporation, or IDC, for R65.0 million ($10.4 million) specifically for financing capital expenditures incurred by
Blyvoor in completing the Blyvoor expansion project. The loan bears interest at 1% below the prime rate of First National Bank of
Southern Africa Limited on overdraft. As of June 30, 2006, the interest rate on this loan was 10.0% per annum. The loan is due in July
2007.

The loan is secured over the Blyvoor metallurgical plant, with a net book value of $3.1 million at June 30, 2006. The loan
agreement prohibits the Company from disposing of or further encumbering the assets covered by the special notarial bond and
places restrictions over its ability to change the business of Blyvoor.

(b) On October 14, 2004, DRD (Isle of Man) entered into a facility of $15.0 million with Investec Bank (Mauritius) Limited, or Investec

(Mauritius), of which $10.0 million had been drawn down at June 30, 2005. The facility could be used to finance future acquisitions
or rights offers by companies in which the Company wishes to acquire shares, or with prior written consent of Investec (Mauritius), it
could be used for any other purpose. The facility bore interest at the three-month London Inter-bank Offered Rate, or LIBOR, plus
300 basis points. Funds advanced and interest on this facility had to be repaid in cash in equal installments every three months from
the date of the relevant advance so that the amount of the advance was paid in full to Investec (Mauritius) on or before November 12,
2007.

The facility was secured by DRD (Isle of Man)’s shares in Emperor Mines Limited, DRD (Porgera) Limited and Tolukuma Gold
Mines Limited. This loan was repaid on March 16, 2006.

F-38

19. LONG-TERM LOANS (continued)

(c) There are four loan facilities from the ANZ Banking Group Limited, or ANZ Bank, to Emperor and they comprise the Vatukoula loanfacility, project loan facilities, a property loan and a gold call option facility.

The Vatukoula loan facility is secured by Emperor Gold Mining Company Limited (Fiji) as follows:

(1) a first registered deed of charge over all present and future assets and undertakings of Emperor other than excluded

assets (Certain Special Prospecting Leases and all the shares in Tuvatu Gold Mining Company Limited);

(2) a first registered mortgage over all freehold and leasehold land;
(3) a first registered mortgage over Special Site Rights 6, 7, 8 and Special Mining Leases 54, 55 and 56; and
(4) a first registered Bill of Sale over its motor vehicles.

Agreement was reached with ANZ Bank prior to June 30, 2006 to restructure this loan facility with the first loan repayment due on
April 30, 2007 to the value of $1.9 million. Further biannual repayments are to be made of this amount beginning on
October 31, 2007 with a final payment of $0.9 million due on October 31, 2009. The loan bears interest at LIBOR plus 2.5% per
annum. The balance on this loan at June 30, 2006 is $9.8 million.

On March 21, 2006 Emperor announced the signing of documentation with ANZ Bank for project loan facilities totaling $42.0
million. These facilities comprise a $35.0 million senior facility with a 59 month tenor and a $7.0 million revolving working capital
facility. The security in relation to this facility is as follows:

(1) fixed and floating charges over the assets of Tolukuma in Papua New Guinea and Western Australia;
(2) fixed and floating charges over the assets of the Porgera Joint Venture, other than which require the consent of the

Porgera Joint Venture partners, in Papua New Guinea and Western Australia;

(3) mortgages over the shares of DRD (Porgera) Limited and Tolukuma Gold Mines Limited;
(4) tripartite agreements with key suppliers and contract counterparties;
(5) mortgage over the Tolukuma Tenements; and
(6) fixed and floating charge over the assets of DRD (Isle of Man) Limited.

The loan bears interest at LIBOR plus 2% per annum. The balance on this loan at June 30, 2006 is $43.1 million.

The property loan represents a mortgage over a property purchased in Brisbane during May 2006. The loan attracts interest
payments only for the first five years of the mortgage. A First Registered Mortgage by Emperor over the property situated at 45
Milman St, Clayfield, Queensland, Australia will be held by ANZ Bank as security for this loan. The loan bears interest at 6.79%
per annum. The balance on this loan at June 30, 2006 is $1.1 million.

The gold call option facility was implemented to purchase gold call options from ANZ Bank. The term of the facility is 12 months
from April 6, 2006 and the loan bears interest at LIBOR plus 2.1% per annum. The original drawdown in relation to this facility
was $4.0 million of which $2.0 million has been repaid. The settlement of this facility will coincide with closing out the call
options for which the facility was implemented. The balance on this loan at June 30, 2006 is $2.0 million.

The carrying amount of assets pledged as security for these facilities is as follows:

(1) Property, plant and equipment, $96.6 million
(2) Non-current inventories, $30.2 million
(3) Cash and cash equivalents, $12.3 million
(4) Receivables, $6.1 million
(5) Current inventories, $23.9 million
(6) Current derivative instruments, $2.9 million

Cash and cash equivalents pledged as security is recorded as restricted cash and cash equivalents in the accompanying balance
sheet.

(d) Finance leases are effectively secured over vehicles with a carrying value of $1.7 million at June 30, 2006, as the rights of the

leased assets revert to the lessor in the event of default.

F-39

19. LONG-TERM LOANS (continued)

(e) On November 12, 2002, the Company issued $66,000,000 of 6% Senior Convertible Notes due 2006, in a private placement. The

interest payments of 6% per annum are payable semi-annually on May 12 and November 12 of each year. The Company issued
the notes at a purchase price of 100% of the principal amount thereof. If not converted, or previously redeemed, the notes will be
repaid at 102.5% of their principal amount plus accrued interest on the fifth business day following their maturity date in
November 2006.

The notes are convertible at any time at the option of the holder into the Company's ordinary shares, or American Depositary
Shares, or ADSs, at a conversion price of $3.75 per share or ADS, subject to adjustment in certain events if the cumulative
adjustments amount to 1% or more of the conversion rate.

The Company may redeem the notes, in whole or in part, at any time after November 12, 2005, at a redemption price equal to
100% of the principal amount of the notes to be redeemed, plus accrued original issue discount, plus accrued and unpaid interest,
if any, to but excluding, the date of redemption on giving not less than 30 nor more than 60 days notice if (1) the closing price of
its ADSs on the NASDAQ SmallCap Market or substitute national securities exchange has exceeded 150% of the conversion
price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day
immediately before the date of mailing of the provisional redemption notice and (2) the shelf registration statement covering the
resale of the notes and the ordinary shares and ordinary shares underlying the ADSs issuable upon conversion of the notes is
effective and available for use and is expected to remain effective and available for use for 30 days following the provisional
redemption date, unless registration in no longer required.

If there is a change in control of the Company, holders of the notes have the right to require it to repurchase their notes, at 102.5%
of the principal amount of the notes.

In connection with the offering of the notes, the Company entered into a registration rights agreement with the initial purchaser of
the notes. This agreement obligated the Company to file with the SEC a shelf registration statement with respect to the offer and
sale of the notes and the ordinary shares or the ordinary shares underlying the ADSs issuable upon conversion of the notes. On
September 30, 2003, the SEC declared effective the Company's registration statement of Form F-3 pertaining to the notes. The
notes were redeemed, in full, on November 15, 2006.

The notes are presented in the consolidated balance sheet as follows:

June 30,

2006

June 30,

2005

$'000

$'000

Opening balance

64,947

61,134

Liability portion

57,361

49,732

Derivative portion (1)

7,586

11,402

Amortization of capitalized issuance costs, net of additional expenses incurred (2)

1,546

1,597

Interest accrued (3)

9,785

9,869

Interest payment

(3,960)

(3,960)

Change in fair value of derivative portion (1)

(5,382)

(3,816)

Foreign exchange

(11)

123

Closing balance

66,925

64,947

Liability portion

64,722

57,361

Derivative portion (1)

2,203

7,586

(1) The conversion option embedded in the notes is accounted for as an embedded derivative instrument under

SFAS No. 133. The option does not qualify for hedge accounting. The embedded derivative instrument is carried at fair
value, such fair value being determined on the residual cash flow method, with changes in fair value included in the
statement of operations in the period in which the change occurs and classified as loss/(profit) on derivative instruments.

(2) The issuance costs relating to the convertible loan note have been capitalized, and are being amortized over the life of

the instrument.

(3) Interest on the notes is calculated on the effective yield basis, at an effective rate of 16.08% per annum, which includes

the accretion on the embedded derivative instrument.

Included in unrealized foreign exchange gains is a loss of $6.2 million, a loss of $4.4 million and a gain of $10.6 million in fiscals
2006, 2005 and 2004, respectively, relating to foreign exchange movements on the Senior Convertible Notes.

F-40

19. LONG-TERM LOANS (continued)

Long-term loans are scheduled for repayment in the 12 months to:

$'000

30 June 2007

76,117

30 June 2008

10,639

30 June 2009

10,268

30 June 2010 onwards

29,345

126,369

June 30,

2006

June 30,

2005

Currencies in which long-term loans are denominated are as follows:

$'000

$'000

United States Dollars

66,925

74,967

Australian Dollars

2,665 -

South African Rands

56,779

4,025

126,369

78,992

The Group has undrawn committed borrowing facilities of $nil (June 30, 2005: $nil) from the Industrial Development Corporation and
bank overdraft facilities of $0.3 million (June 30, 2005: $1.4 million) of which $0.3 million (June 30, 2005: $1.4 million) had been
utilized at year-end.

20. STOCKHOLDERS' EQUITY

Ordinary shares:

June 30, 2006

During the year ended June 30, 2006, the Company issued 18,444,954 no par value shares at market value to certain institutional
investors and employees, in exchange for gross cash proceeds of $25.9 million. In addition, 4,451,291 no par value shares, with a
value of $4.5 million, were issued for the acquisition of loans and 932,857 no par value shares, with a value of $1.2 million,
were issued in exchange for services rendered.

June 30, 2005

During the year ended June 30, 2005, the Company issued 56,230,705 no par value shares at market value to certain institutional
investors, in exchange for gross cash proceeds of $65.9 million. In addition, 6,612,676 no par value shares, with a value of $16.6
million, were issued in exchange for 29,097,269 Emperor Mines Limited shares (refer Note 4).

June 30, 2004

During the year ended June 30, 2004, the Company issued 41,463,639 no par value shares at market value to certain institutional
investors, in exchange for gross cash proceeds of $107.4 million. In addition, 6,643,902 no par value shares, with a value of $16.7
million, were issued to Oil Search Limited in final settlement of the Porgera Joint Venture acquisition price (refer Note 4).

Cumulative preference shares:

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 exploration or the disposal of the Argonaut mineral rights
acquired from Randgold & Exploration Company Limited in September 1997. During fiscal 2005, the Argonaut mineral rights
reverted to the South African Government after no application for conversion was lodged within the stipulated period of one year,
under the provisions 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.

Durban Deep “C” options:

The Company has authorized but not issued 10,000,000 Durban Deep “C” options on ordinary shares at an exercise price of R15 per
ordinary share which are exercisable at any time during the period from the date on which the option is issued to a date not later than
five years from the date of issue. These options are to be used as consideration for acquisitions by the Company.

F-41

21. (LOSS)/PROFIT PER SHARE

(Loss)/profit per share is calculated based on the (loss)/profit divided by the weighted average number of shares in issue during the
year. Fully diluted (loss)/profit per share is based upon the inclusion of potential common shares with a dilutive effect on (loss)/profit
per share.

For the year ended June 30, 2006

Loss

Per-share

$000

Shares

amount

(Numerator)

(Denominator)

$ cents

Basic and fully diluted loss per share

Shares outstanding July, 1, 2005

296,206,048

Weighted average number of shares issued - 2006

14,359,778

Net loss from continuing operations applicable to common stockholders

(25,854)

310,565,826

(9)

Profit from discontinued operation

2,023

1

Net loss applicable to common stockholders

(23,831)

(8)

Anti-dilutive shares (shares underlying Senior Convertible Notes)

-

17,600,000

Anti-dilutive shares (shares underlying staff options allocated)

14,575,256

There is no dilution in loss per share for the fiscal year ended June 30, 2006, as the effect of dilutive securities in issue would have
been anti-dilutive as the Company recorded a loss for the year.

For the year ended June 30, 2005

Loss

Per-share

$000

Shares

amount

(Numerator)

(Denominator)

$ cents

Basic and fully diluted loss per share

Shares outstanding July, 1, 2004

233,307,667

Weighted average number of shares issued - 2005

24,388,129

Net loss from continuing operations applicable to common stockholders

(37,430)

257,695,796

(15)

Loss from discontinued operation

(44,359)

(17)

Net loss applicable to common stockholders

(81,789)

(32)

Anti-dilutive shares (shares underlying Senior Convertible Notes)

-

17,600,000

Anti-dilutive shares (shares underlying staff options allocated)

13,051,786

There is no dilution in loss per share for the fiscal year ended June 30, 2005, as the effect of dilutive securities in issue would have
been anti-dilutive as the Company recorded a loss for the year.

For the year ended June 30, 2004

Loss

Per-share

$000

Shares

amount

(Numerator)

(Denominator)

$ cents

Basic and fully diluted loss per share

Shares outstanding July, 1, 2003

184,222,073

Weighted average number of shares issued - 2004

32,287,770

Net loss from continuing operations applicable to common stockholders

(38,094)

216,509,843

(17)

Loss from discontinued operation

(20,804)

(10)

Net loss applicable to common stockholders

(58,898)

(27)

Anti-dilutive shares (shares underlying Senior Convertible Notes)

-

17,600,000

Anti-dilutive shares (shares underlying staff options allocated)

8,345,363

There is no dilution in loss per share for the fiscal year ended June 30, 2004, as the effect of dilutive securities in issue would have
been anti-dilutive as the Company recorded a loss for the year.

F-42

22. EMPLOYEE BENEFIT PLANS

Pension and provident funds

In South Africa, the Group participates in a number of multi-employer industry-based retirement plans. All plans are governed by the
Pension Funds Act, 1956. The provident funds are funded on the “money accumulative basis” with the members' and Group's
contributions having been fixed in the constitutions of the funds. In Papua New Guinea retirement fund contributions are regulated by
the Superannuation Act. According to the Act, the Group has to contribute 7% of the employee's earnings to a local superfund
(NASFUND), whilst the employee contributes 5% of their gross salaries and wages. Payments are made to the fund on a monthly
basis.

The majority of the Group's employees are covered by one of the above-mentioned funds. Fund contributions by the Group for the
year ended June 30, 2006 amounted to $4.3 million (2005: $7.4 million; 2004: $8.7 million).

Post-retirement benefits other than pensions

Prior to the Company's acquisition of Blyvoor, skilled workers (clerical workers and mine management) at that operation participated
in multi-employer health plans, which paid certain medical costs. Employer contributions were determined on an annual basis by these
health funds. Qualifying dependants received the same benefits as active employees. Blyvoor voluntarily accepted liability for post-
retirement medical benefits of employees who were members of these multi-employer health plans prior to the acquisition. The fixed
amount, which was determined based on negotiations between Blyvoor and the various medical schemes, was settled during fiscal
2004.

Crown has an obligation to fund a portion of the medical aid contributions of certain of its employees after they have retired. At June
30, 2006 a provision of $2.3 million for post-retirement medical benefits has been raised. This provision is based on the latest
calculations using a projected unit credit method, of independent actuaries performed as at June 30, 2006. Post-retirement medical
benefits are actuarially valued every three years. The obligation is unfunded. During fiscal 2006, the Company expensed $0.5 million
relating to the post-retirement medical benefits.

June 30,

2006

June 30,

2005

$'000

$'000

Opening balance

-

-

Acquired through acquisition of subsidiary

2,259

-

Actuarial loss recognized in earnings

455

-

Foreign exchange

(408)

-

Closing balance

2,306

-

The assumptions used in calculating the above amounts are:

Discount rate

7.8%

Expected annual increase in health care costs

5.8%

Assumed health care cost trend June 30

Health care cost trend assumed for next year

5.8%

Rate to which the cost trend is assumed to decline (the ultimate trend rate)

5.8%

Year that the rate reaches the ultimate trend

n/a

F-43

22. EMPLOYEE BENEFIT PLANS (continued)

Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one percentage-point
change in assumed health care cost trend rates would have the following effect:

One

percentage

point

increase

$'000

One

percentage

point

decrease

$'000

Effect on total service and interest cost

78

(61)

Effect on post-retirement benefit obligation

583

(452)

The Company expects to contribute $0.3 million to the post-retirement medical plan in fiscal 2007.

Estimated future benefit payments

$'000

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

2007

309

2008

343

2009

381

2010

422

2011

467

Long-service awards

The Group participates in the Chamber of Mines of South Africa Long-Service Awards Scheme, or the Scheme. The Scheme does not
confer on any employee or other persons any right of payment of any award. In terms of the Scheme, bonus payments may be made to
certain employees, usually semi-skilled, upon reaching the age of 55, who have completed 15 years of continuous service in South
African gold mining companies which are members of the Chamber of Mines of South Africa and The Employment Bureau of Africa,
provided such service is not pensionable service. The Scheme lays down the rules under which an employee may be eligible for the
award. The award is paid by the company for which the employee works upon becoming eligible for the award and electing to receive
payment. All awards must be confirmed by the Chamber of Mines of South Africa before payment. The amount of the award is based
on both the employee's skill level and years of service with qualified gold mining companies.

The liability at June 30, 2006 was $0.5 million (June 30, 2005: $nil). During fiscal 2006, the Company expensed $0.6 million
(2005: $0.3 million; 2004: $0.2 million) relating to the long-service awards.

F-44

22. EMPLOYEE BENEFIT PLANS (continued)

Share option plan

The Company has an Employee Share Option Scheme, or ESOS, under which all employees may be granted options to purchase
shares in the Company's authorized, but unissued ordinary shares. Unissued shares that have been reserved for the ESOS may not
exceed 15% of the number of issued ordinary and preferred ordinary shares.

The number of issued and exercisable share options is approximately 4.6% of the issued ordinary share capital. The participants in the
ESOS are fully taxed on any gains realized on the exercise of their options.

On October 24, 1997, the terms of the ESOS were amended. The amended terms applied to options outstanding at the date of the
amendment and options to be issued thereafter. The exercise price of options, which is determined at grant date, is the lowest seven
day trailing average of the closing market prices of an ordinary share on the JSE Limited (South Africa), or JSE, as confirmed by the
Company's directors, during the three months proceeding the day on which the employee is granted the option. Prior to the
amendment, the exercise price was the closing JSE market price on the day preceding the grant date of the option. The vesting period
for options is determined by the directors.

All options expire ten years after grant date.

During the fiscal years 1998 to 2006, the Company issued options, one quarter of which were exercisable six months after grant date, a
further quarter of which are exercisable twelve months after grant date and a further quarter of which are exercisable annually
thereafter. Share options activity in respect of these options was as follows:

Outstanding

Exercisable

Average

Average

price per

price per

Number of

share

Number of

share

Shares

(in Rand)

Shares

(in Rand)

Balance at June 30, 2003

5,645,057

17.62

931,205

19.43

Granted

3,452,117

18.37

Exercised

(940,269)

8.56

Forfeited/lapsed

(388,167)

17.98

Balance at June 30, 2004

7,768,738

19.03

2,964,354

18.67

Granted

5,794,784

7.21

Exercised

(66,000)

6.50

Forfeited/lapsed

(1,003,611)

15.10

Balance at June 30, 2005

12,493,911

13.96

5,949,499

17.68

Granted

3,090,944

5.94

Exercised

(679,911)

5.54

Forfeited/lapsed

(887,563)

11.64

Balance at June 30, 2006

14,017,381

13.37

8,699,972

15.63

Average price per share is disclosed in South African Rand as the options are on ordinary shares and the option price is stated in South
African Rand. As of June 30, 2006, the average price per share for outstanding options is $1.84 and average price per share for
exercisable options is $2.15.

F-45

22. EMPLOYEE BENEFIT PLANS (continued)

The weighted average grant date fair value of the above options granted in fiscal 2006 was R3.86 (2005: R1.87 and 2004: R7.41).

The grant date fair value of these options was determined using a Black-Scholes pricing option model, applying the following
weighted average assumptions:

June 30, 2006 June 30, 2005 June 30, 2004

Expected life (in years)

3

3

3

Risk free interest rate

7.94%

7.98%

9.24%

Volatility

36%

35%

31%

Dividend yield

0%

0%

0%

During fiscal 2002, the Company issued certain options, 25% which were exercisable immediately and the remaining 75% in equal
tranches after 6, 12, 24 and 36 months. Share options activity in respect of these options was as follows:

Outstanding

Exercisable

Average

Average

price per

price per

Number of

share

Number of

share

Shares

(in Rand)

Shares

(in Rand)

Balance at June 30, 2003

631,625

15.81

305,375

15.81

Exercised

(43,750)

15.81

Forfeited/lapsed

(11,250)

15.81

Balance at June 30, 2004

576,625

15.81

419,125

15.81

Exercised

-

15.81

Forfeited/lapsed

(18,750)

15.81

Balance at June 30, 2005

557,875

15.81

557,875

15.81

Exercised

-

15.81

Forfeited/lapsed

-

15.81

Balance at June 30, 2006

557,875

15.81

557,875

15.81

Average price per share is disclosed in South African Rand as the options are on ordinary shares and the option price is stated in South
African Rand. As of June 30, 2006, the average price per share for outstanding options is $2.17 and average price per share for
exercisable options is $2.17.

The following tables summarize information relating to all employee stock options outstanding as June 30, 2006:

Outstanding

Exercisable

Weighted

average

Weighted

Weighted

contractual

average

average

Number of

life (in

exercise

Number of

exercise

Shares

years)

price

Shares

price

(in Rand)

(in Rand)

Range of exercise prices (R)

R4.52 to R6.78

5,842,021

8.92

5.57

2,024,937

5.51

R6.79 to R10.18

261,375

4.80

7.44

261,375

7.44

R10.19 to R15.28

1,693,400

8.30

10.93

854,200

10.93

R15.29 to R22.93

5,821,660

6.88

18.27

5,160,535

18.26

R22.94 to R34.41

916,800

6.32

29.09

916,800

29.09

R34.42 to R36.08

40,000

6.01

36.08

40,000

36.08

14,575,256

7.79

12.86

9,257,847

15.64

F-46

23. FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash and cash equivalents

The carrying value of cash and cash equivalents approximates their fair value due to the short-term maturity of these deposits. The
Group attempts to minimize its credit risk by placing cash and cash equivalents with major banks and financial institutions located in
South Africa, Australia Papua New Guinea and Fiji, after evaluating the credit ratings of the respective financial institutions. The
Group believes that no concentration of credit risk exists in respect of cash and cash equivalents.

Derivative instruments

In the normal course of its operations, the Group is exposed to market risks, including commodity price, foreign currency and interest
rate risks. The Company has entered into transactions, which make use of derivative instruments, to economically hedge certain
exposures. These instruments include interest rate swaps, gold forward contracts, gold call options and gold lease rate swaps. The
decision to use these types of transactions is based on the Company's hedging policy, which precludes the forward selling of gold,
however with the recent acquisition of Emperor the Company acquired the gold forward contracts held by Emperor. Although most of
these instruments are used as economic hedges, none of them qualify for hedge accounting and, consequently, are marked-to-market
through the statement of operations in accordance SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”

Eskom gold for electricity contract

In October 2000, the Company entered into a contract to buy electricity from Eskom. Under the terms of the Company's agreement,
the Company paid Eskom the standard electricity tariff for all energy it consumes, including the 75 GWh per month specified in the
contract. In addition, every 12 month-period starting in October the Company adjusted the amounts paid in that period in accordance
with an established formula based on the gold price. This contract expired in September 2005.

The gold price adjustment was based on the notional amount of 15,000 ounces of gold multiplied by the difference between the
contracted gold price, which is the price that was agreed on the date of the transaction for a determined period, and the arithmetic
average of London PM fix for each business day in the calculation period.

The Company concluded that (1) the contract in its entirety did not meet the definition of a derivative instrument and therefore it did
not have to be carried on the balance sheet at fair value; (2) the embedded gold for electricity forward contract possessed economic
characteristics that were not clearly and closely related to the economic characteristics of the host contract; and (3) a separate,
stand-alone instrument with the same terms would qualify as a derivative instrument. Accordingly, the embedded derivative was
separated from the host contract and carried at fair value.

The contract was closed out on April 28, 2005, at a cost of $3.6 million.

Gold forward contracts

Gold forward contracts were entered into by Emperor with ANZ Banking Group Limited. A total of 145,695 ounces is to be delivered
under these gold forward contracts. The fair value of the gold forward contracts that is expected to mature in fiscal 2007 is a liability of
$7.2 million relating to 41,526 ounces. The remaining liability with a fair value of $18.1 million relates to the 104,169 ounces which are to be
delivered after June 30, 2007.

Gold call options

European Style call options were purchased in January 2006 with strike prices ranging from $634 to $653 per ounce. Expiry dates of the
options range from September 2006 to December 2008. The call options provide the Group with the right but not the obligation to buy in
total up to 46,426 ounces (reducing throughout the period) of gold at the various strike prices. The gold call options were taken up by the
Group to mitigate the deterioration in the gold forward contracts. The fair value of the gold call options at June 30, 2006 was an asset of
$2.9 million.

F-47

23. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Other positions

The Company had entered into a gold rate lease swap and call position transactions which had been accounted for in the financial
statements on a mark-to-market basis in prior fiscal years, and which matured or were closed out in fiscal 2004.

During fiscal 2004, a gold lease rate swap for 109,875 ounces, at a rate of 0.20% matured. A gold lease rate swap is a contract
whereby the Company and a counterparty select a notional amount of gold, and thereafter over the life of the contract one party pays a
fixed lease rate based on that amount of gold and the other party pays a floating lease rate based on the same amount of gold. The
Company had exposure to increases in the three-month lease rate up to June 2004. The volume the swap was based on decreases every
quarter until it reached zero (by June 2004). Every quarter the Company received a fixed cash flow equal to 0.2% per annum of the
volume at $280 per ounce, and paid the three-month floating lease rate converted at the then market spot rate.

During fiscal 2003, the Company bought call options as a risk management tool to protect the maximum exposure on the gold for
electricity contract. Options covering a total of 272,110 ounces were purchased for $14.9 million. These contracts expired by
September 2005. During fiscal 2004, the Company took advantage of the lower rand gold price and closed out 265,000 ounces of the
Eskom gold for electricity contract in line with its policy of not hedging gold production. Accordingly the exposure for which the call
options were bought as a risk management tool had been significantly reduced and the remaining call options were closed out during
fiscal 2004, recording a gain of $0.1 million.

Included in profit/(loss) on derivative instruments is $nil for fiscal 2006, $nil for fiscal 2005 and a loss of $3.2 million for fiscal 2004,
relating to these instruments.

Concentration of credit risk

The Group's South African operations all deliver their gold to Rand Refinery Limited, or Rand Refinery, which refines the gold to
saleable purity levels and then sells the gold, on behalf of the Group, on the bullion market. The gold is sold by Rand Refinery on the
same day as it is delivered and settlement is made within two days. Once the gold has been delivered to Rand Refinery, the risks and
rewards of ownership have passed.

The gold produced in Papua New Guinea by Tolukuma is sold directly to AGR Matthey and proceeds for gold sold are received within
two days of sale. The selling price is determined by the London Bullion Market Association spot price and the Company is paid in US
Dollars. We do not have an interest in AGR Matthey.

The gold produced by Porgera in Papua New Guinea is sold directly to Australia and New Zealand Investment Bank, or ANZ Investment
Bank. Proceeds for gold sold are received within two days from the swap confirmation report released by the refiners, AGR Matthey. The
selling price is determined by the spot price at the time of sale and the Company is paid in US Dollars. The concentration of credit risk in
Papua New Guinea is mitigated by the reputable nature of the customer and the settlement of the proceeds within two days.

The gold produced by Vatukoula in Fiji is sold directly to AGR Matthey. Proceeds for gold sold are received within 6 days of sale. The
selling price is determined by Reuters quoted “London Spot Bid Price” which means the London bid price as published by Reuters for two
day settlement and the Company is paid in US Dollars.

Foreign currency risk

The Group's functional currency for the South African operations is the South African Rand, for the Papua New Guinea operations it is
the Papua New Guinea Kina and for the Fiji operation is the Fiji Dollar. Although gold is sold in US Dollars, the Company is obliged
to convert these into Rands for its South African operations in terms of South African Reserve Bank, or SARB, regulations. The
Company is thus exposed to fluctuations in the Dollar / South African Rand exchange rate. The Company conducts its operations in
South Africa, Papua New Guinea and Fiji. Currently, foreign exchange fluctuations affect the cash flow that it will realize from its
operations as gold is sold in US Dollars while production costs are incurred primarily in Rands, Kina and Fiji Dollars.

The Company's results are positively affected when the US Dollar strengthens against these foreign currencies and adversely affected
when the US Dollar weakens against the foreign currencies. The Company's cash and cash equivalent balances are held in US Dollars,
Rands and Australian Dollars; holdings denominated in other currencies are relatively insignificant. Certain of the Company's
financial liabilities are denominated in a currency other than the Rand (refer Note 19). The Company is thus exposed to fluctuations in
the Rand with the relevant currency. The Company has not entered into any foreign exchange hedging contracts to attempt to mitigate
its foreign currency risk.

F-48

23. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Interest rate and liquidity risk

Fluctuations in interest rates impact the value of short-term cash investments and financing activities, giving rise to interest rate risks.

Interest rate swap agreements

An interest rate swap agreement was entered into in November 2002 to manage the exposure to changes in interest rates with regard to
the interest payable on the Senior Convertible Notes (refer Note 19). The fixed interest rate (in US Dollars) was swapped for a floating
South African interest rate, calculated at the Johannesburg Inter Bank Acceptance Rate, or JIBAR, plus 200 basis points per annum.
An amount of 60% of the coupon rate is subject to this swap agreement, based on the requirements of the SARB, as this represents the
amount of the funds raised in South Africa. The maturity date of this agreement was November 2006. As discussed in Note 17, the
interest rate swap agreement was closed out on November 12, 2005.

Interest rate swap agreements were entered into by Emperor to manage the interest rate risk on the interest payments of the Vatukoula loan
facility, which currently bears interest at an average variable rate of 7.76%. In order to minimize fluctuation in interest rates, 64% of the
loan has been covered by entering into interest rate swap agreements under which the Group is obliged to receive interest at variable rates
and pay interest at fixed rates until October 2008. The fixed interest rate payable was 4.34% per annum.

Fair value of financial instruments

The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale.

The following table represents the carrying amounts and fair values of the Group's financial instruments outstanding:

June 30,

2006

June 30,

2006

June 30,

2005

June 30,

2005

$'000

$'000

$'000

$'000

Carrying

amount

Fair value

Carrying

amount

Fair value

Financial assets

Cash and cash equivalents

54,912

54,912

36,085

36,085

Restricted cash and cash equivalents

12,344

12,344

-

-

Derivative instruments

2,857

2,857

-

-

Receivables

10,858

10,858

8,020

8,020

Listed investments

209

209

101

101

Investments in environmental trusts

8,306

8,306

6,416

6,416

Financial liabilities

Bank overdraft

331

331

1,370

1,370

Accounts payable and accrued liabilities

52,669

52,669

33,317

33,317

Derivative instruments

25,222

25,222

550

550

Long-term loans

- long-term portion

50,252

50,252

69,314

63,819

- short-term portion

76,117

74,469

9,678

9,678

The carrying values of cash and cash equivalents, receivables, accounts payable and accrued liabilities and short-term loans
approximates their fair values due to the short-term maturities of these assets and liabilities.

The fair value of listed investments has been determined by reference to the market value of the underlying investments. The
investment in the environmental trusts is invested primarily in interest bearing securities and equity-limited unit trusts, the cost of
which approximates their fair value.

The fair value of the fixed interest rate long-term debt instruments is subject to changes in market interest rates. The fair values are
calculated based on a credit adjusted US Treasury rate, with comparable terms of maturity.

F-49

24. COMMITMENTS AND CONTINGENT LIABILITIES

June 30,

2006

June 30,

2005

$'000

$'000

Capital expenditure commitments:

Contracted but not provided for in the financial statements

16,146

274

Authorized by the directors but not contracted for

2,689

3,393

18,835

3,667

Litigation
The Group is subject to litigation in the normal course of business. The Group believes that any adverse outcome from litigation would not
have a material effect on its financial position, results of operations or liquidity.

Securities class action
On June 13, 2005, a securities class action was filed in the United States District Court for the Southern District of New York against the
Company and two of its officers. Since then, four nearly identical securities class action complaints have been filed against the Company
and the same officers. The cases have been consolidated and a consolidated amended complaint has been filed. To date, neither the
Company, nor the individual defendants have been formally served with any complaint regarding these matters.

The actions are allegedly filed on behalf of purchasers of the Company’s shares during two purported class periods spanning

from October 23, 2003 to February 25, 2005. The complaints allege generally that the Company and the individual defendants made false
and misleading public statements regarding, among other things:

•

the restructuring of our North West Operations in South Africa;

•

the Company’s ability to reduce the negative impact of the increasing value of the South African Rand; and

•

the strength of the Company’s balance sheet.

Based on the Company’s review of the complaints, the Company believes the lawsuits are without merit and we intend to

vigorously defend ourselves and the Company’s officers named in the complaints. The Company’s attorneys have filed an application to
dismiss the plaintiffs’ case. The Company is currently awaiting direction from court on a date to present argument on the application, if the
judge decides to hear oral argument, or for a ruling on the application, should he decide not to hear argument.

F-50

25. GEOGRAPHIC AND SEGMENT INFORMATION

Based on risks and returns, the Directors consider that the primary reporting format is by business segment. The Group operates in one industry segment, being the extraction and
production of gold and related by-products. Therefore the disclosures for the primary segment have already been given in these financial statements.

The chief operating decision-maker is the Board of Directors, who evaluate the business based on the following geographical operational segments, based on revenue generated
from the location of the seller:

Year ended June 30, 2006

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

Blyvoor
Mine

ERPM
Mine

Crown
Mine

Other

Total South
Africanoperations

Porgera
Mine

Tolukuma
Mine

Vatukoula
Mine

Other

Total
Australasian
operations

Total
operations

Revenues

83,635

33,840

31,310

-

148,785

64,991

29,085

2,440

-

96,516

245,301

Depreciation and amortization

(3,697)

(2,027)

(2,338)

(49)

(8,111)

(10,014)

(3,930)

(2,694)

(27)

(16,665)

(24,776)

Production costs

(76,936)

(28,642)

(26,697)

(1,362)

(133,637)

(37,021)

(33,448)

(7,453)

-

(77,922)

(211,559)

Results

Net operating (loss)/income

1,177

1,735

1,513

(1,375)

3,050

5,307

(12,655)

(5,583)

6,447

(6,484)

(3,434)

(Loss)/profit after tax

369

(150)

1,518

(17,246)

(15,509)

1,295

(12,988)

(6,260)

7,633

(10,320)

(25,829)

Balance sheet

Mining assets

48,023

6,839

24,853

(1,195)

78,520

63,705

8,533

101,762

994

174,994

253,514

Total assets

55,026

12,085

31,809

14,878

113,798

117,302

17,837

122,346

34,938

292,423

406,221

Net current assets/(liabilities)

(10,025)

(2,887)

(1,091)

(58,065)

(72,068)

9,677

3,646

(18,736)

32,013

26,600

(45,468)

Other information

Capital expenditures

8,832

1,643

3,341

239

14,055

17,237

4,256

5,249

160

26,902

40,957

Impairment of assets

-

-

-

3

3

-

-

-

-

-

3

Total number of employees

7,740

2,653

10,393

F-51

25. GEOGRAPHIC AND SEGMENT INFORMATION (continued)

Year ended June 30, 2005

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

Blyvoor
Mine

North
West Mine

West Wits
Mine

Other

Total South

African

operations

Porgera
Mine

Tolukuma
Mine

Other

Total

Australasian

operations

Total
operations

Discontinued
operation

Total

continuing

operations

Revenues

68,370

81,538

-

-

149,908

82,793

32,446

-

115,239

265,147

(81,538)

183,609

Depreciation and amortization

(2,716)

(971)

-

2,773

(914)

(11,613)

(3,336)

1,095

(13,854)

(14,768)

971

(13,797)

Production costs

(73,814)

(100,695)

-

(1,218)

(175,727)

(36,210)

(25,278)

-

(61,488)

(237,215)

100,695

(136,520)

Results

Net operating income/(loss)

(11,917)

(62,714)

(486)

(8,203)

(83,320)

29,808

245

(2,850)

27,203

(56,117)

62,714

6,597

(Loss)/profit after tax

(12,567)

(62,464)

(355)

(20,574)

(95,960)

24,028

(718)

(27,242)

(3,932)

(99,892)

62,464

(37,428)

Balance sheet

Mining assets

46,112

-

152

1,384

47,648

66,238

7,344

940

74,522

122,170

Total assets

54,665

-

1,971

20,527

77,163

117,788

17,259

26,047

161,094

238,257

Net current assets/(liabilities)

(6,715)

-

(35)

6,697

(53)

(1,262)

6,371

6,541

11,650

11,597

Other information

Capital expenditures

729

3,524

-

37

4,290

17,174

3,399

-

20,573

24,863

(3,524)

21,339

Impairment of assets

-

39,451

-

664

40,115

-

-

-

-

40,115

(39,451)

664

Total number of employees

3,481

824

4,305

F-52

25. GEOGRAPHIC AND SEGMENT INFORMATION (continued)

Year ended June 30, 2004

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

Blyvoor
Mine

North
West Mine

West Wits
Mine

Other

Total South

African

operations

Porgera
Mine

Tolukuma
Mine

Other

Total

Australasian

operations

Total
operations

Discontinued

operation

Total

continuing

operations

Revenues

90,066

130,036

-

-

220,102

60,445

32,743

-

93,188

313,290

(130,036)

183,254

Depreciation and amortization

(2,643)

(4,160)

-

1,199

(5,604)

(9,260)

(7,340)

(7,931)

(24,531)

(30,135)

4,160

(25,975)

Production costs

(90,366)

(134,465)

-

(1,189)

(226,020)

(31,650)

(19,821)

-

(51,471)

(277,491)

134,465

(143,026)

Results

Net operating income/(loss)

(8,980)

(21,523)

(1,539)

(26,890)

(58,932)

18,631

2,402

266

21,299

(37,633)

21,523

(16,110)

(Loss)/profit after tax

(15,450)

(20,804)

(1,403)

(20,157)

(57,814)

9,062

2,294

(12,433)

(1,077)

(58,891)

20,804

(38,087)

Balance sheet

Mining assets

48,518

27,689

-

6,164

82,371

61,741

7,000

5,831

74,572

156,943

Total assets

31,572

79,368

4,245

103,681

218,866

19,204

9,571

35,094

63,869

282,735

Net current (liabilities)/assets

(59,902)

(157,709)

(19,036)

298,902

62,255

(25,102)

(1,651)

(60,495)

(87,248)

(24,993)

Other information

Capital expenditures

9,151

5,511

-

89

14,751

8,723

3,442

1

12,166

26,917

(5,511)

21,406

Impairment of assets

-

1,276

-

2,990

4,266

-

-

-

-

4,266

(1,276)

2,990

Total number of employees

12,986

751

13,737

F-53

26. VARIABLE INTEREST ENTITY

In fiscal 2006, as a result of the transactions entered into by the Company as part of the restructuring of its South African
Operations, the Company identified Khumo Gold as a Variable Interest Entity, or VIE, due to certain capital and debt structures.
Khumo Gold was established as an investment holding company to provide previously disadvantaged persons in South Africa
access to investment opportunities within the mining industry. Khumo Gold has a 15% interest in DRDGOLD SA at June 30, 2006
and holds investments in preference shares issued by Crown, ERPM and Blyvoor. These investments were funded by the
Company through the Company acquiring preference shares issued by Khumo Gold of $4.8 million (R31.8 million). The Company
does not hold any of the ordinary shares in Khumo Gold. Accordingly the Company began to consolidate the VIE from
December 1, 2005, in accordance with the requirements of FIN 46(R). On consolidation, the investments held by Khumo Gold in
DRDGOLD SA and the preference shares in Crown, ERPM and Blyvoor were eliminated against the preference shares issued by
Khumo Gold to the Company. Khumo Gold has no other assets and liabilities at June 30, 2006 nor did it earn any income or incur
any expenses during the period to June 30, 2006.

27. SUBSEQUENT EVENTS

Purchase of Top Star Dump

On August 28, 2006, the Company concluded an agreement with AngloGold Ashanti Limited 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 $1.1 million
(R8.0 million). In addition, a further $1.7 million (R12.0 million) is expected to be spent on infrastructure that will enable the
Company to process the dump. In November 2006, the Provincial Heritage Resources Authority of Gauteng initiated a protection
order against the removal of the dump. The Company is currently contesting the protection order.

6% Senior Convertible Notes repaid in full

On November 15, 2006, the Company repaid, in full, its outstanding 6% Senior Convertible Notes which matured on November
12, 2006. The Company paid a total of $69.6 million to the holders of the Senior Convertible Notes, which included the aggregate
principal amount of the Senior Convertible Notes of $66.0 million, plus all accrued original issue discount and interest. The
repayment was funded from available cash resources and borrowing facilities. The Company’s obligations under the Senior
Convertible Notes have now been satisfied and discharged.

Funding from Investec (Mauritius)

On September 13, 2006, the Company arranged a $35.0 million loan facility with Investec (Mauritius) to fund a portion of the
repayment of the Senior Convertible Notes on November 15, 2006. As at November 30, 2006, $33.0 million had been drawn and
$2.0 million is available under this facility.

Funding of Emperor

In October 2006, the Company committed to a $10.0 million working capital facility for Emperor. The Company has advanced
funds to Emperor under this facility of $2.0 million on October 5, 2006, $5.0 million on November 6, 2006 and $3.0 million on
November 27, 2006. The loan bears interest at LIBOR plus 3% per annum and is repayable on December 31, 2007. A
commitment fee of $0.2 million has also been charged to Emperor under the terms of this facility.

Subsequent to the end of the financial year, the board of DRD (Offshore) has agreed to convert the purchase price adjustment loan
of $5.0 million (refer to Note 4) into shares in Emperor, representing approximately a 3.4% interest in Emperor.

Shares issued by DRDGOLD South African Operations (Pty) Limited, or DRDGOLD SA

On December 11, 2006, Khumo Gold SPV (Pty) Limited, or Khumo Gold, exercised the option granted by the Company in terms
of the option agreement concluded between the parties in October 2005. Khumo Gold acquired from the Company a further
50,000 ordinary shares in DRDGOLD SA for $0.6 million (R4.3 million). After exercising the option, Khumo Gold's shareholding
in DRDGOLD SA increased by 5% to 20%.

In addition, Khumo Gold, as promoter for an employee trust, exercised the option for an employee trust to acquire from the
Company 60,000 ordinary shares in DRDGOLD SA for a consideration of $0.7 million (R5.1 million). After exercising the
option, the trust's shareholding in DRDGOLD SA is 6%.

The Company will finance the transaction, on condition that the terms of the finance are determined by independent experts to be
fair and reasonable to the shareholders of the Company. It is proposed that the Company will subscribe for preference shares in
Khumo Gold and extend a loan to the trustees of the trust.

F-54

27. SUBSEQUENT EVENTS (continued)

Vatukoula placed on care and maintenance

On December 5, 2006, after an extensive three-month review of Vatukoula, the Company 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 will be placed on a
care and maintenance program. This will result in an impairment of Vatukoula’s mining assets in the second quarter of fiscal 2007.
Vatukoula’s mining assets had a carrying value of $101.8 million at June 30, 2006. The amount of the impairment will be
determined on completion of the strategic review of Vatukoula in January 2007.

159

ITEM 19. EXHIBITS

The following exhibits are filed as a part of this Annual Report:

1.1*

Memorandum of Association of DRDGOLD Limited.

1.2† †

Articles of Association of DRDGOLD Limited, as amended on November 8, 2002.

1.3*

Excerpts of relevant provisions of the South African Companies Act.

1.4**

Durban Roodepoort Deep (1996) Share Option Scheme as amended.

2.1*

Excerpts of relevant provisions of the Johannesburg Stock Exchange Listings Requirements.

2.2† †

Indenture between DRDGOLD Limited, as Issuer, and The Bank of New York, as Trustee, dated November 12, 2002.

2.3† †

Purchase Agreement between DRDGOLD Limited and CIBC World Markets Corp., dated November 4, 2002.

2.4† †

Registration Rights Agreement between DRDGOLD Limited and CIBC World Markets Corp., dated November 12,
2002.

2.5† †

DRDGOLD Limited 6% Senior Convertible Note Due 2006 in the amount of $61,500,000 issued pursuant to Rule
144A of the Securities Act of 1933, as amended.

2.6† †

DRDGOLD Limited 6% Senior Convertible Note Due 2006 in the amount of $4,500,000 issued pursuant to Regulation
S under the Securities Act of 1933, as amended.

4.1*

Tribute Agreement, dated October 9, 1992 between DRDGOLD Limited and Rand Leases.

4.2*

Service Agreement, dated July 27, 1995, between DRDGOLD Limited and Randgold.

4.3*

Agreement, dated September 28, 1995, among First Wesgold Mining (Proprietary) Limited, DRDGOLD Limited and
Rand Leases in respect of purchase of assets of First Wesgold by Rand Leases.

4.4**

Pumping Assistance, dated October 14, 1997, for the 1997/1998 fiscal year from the Minister of Mineral and Energy
Affairs – Republic of South Africa to DRDGOLD Limited.

4.5***

Deposit Agreement among DRDGOLD Limited, The Bank of New York as Depositary, and owners and holders of
American Depositary Receipts, dated as of August 12, 1996, as amended and restated as of October 2, 1996, as further
amended and restated as of August 11, 1998.

4.6****

Security Agreement, dated November 5, 1998, between The Chase Manhattan Bank, DRDGOLD Limited, Blyvoor,
Buffels and West Wits.

4.7****

Loan Agreement, dated June 8, 1999, between Industrial Development Corporation of South Africa Limited, Crown
and DRDGOLD Limited.

4.8****

Lender Substitution Deed, dated August 18, 1999, between DRDGOLD Limited, DRD Australasia, NM Rothschild &
Sons (Singapore) Limited, NM Rothschild & Sons (Australia) Limited, as agent in its own capacity, and Rothschild
Nominees (Pty) Limited.

4.9****

A $10m Facility Agreement, dated September 10, 1999, between DRDGOLD Limited, DRD Australasia and NM
Rothschild & Sons (Australia) Limited.

4.10****

Facility Agreement, dated August 9, 1996, between PT Barisan Tropical Mining, Rothschild Australia Limited and the
Participants.

4.11****

Deposit Agreement, dated September 30, 1999, between Buffels and BOE Merchant Bank, a division of BOE Bank
Limited.

4.12****

Undertaking and Security Agreement, dated November 17, 1999, between BOE Bank Limited, through its division
BOE Merchant Bank, and Buffels.

4.13****

Guarantee and Indemnity Agreement, dated November 17, 1999, between DRDGOLD Limited, Blyvoor, Argonaut
Financial Services (Proprietary) Limited, West Wits, Crown and BOE Bank Limited, through its division BOE
Merchant Bank.

4.14****

Loan Security Agreement, dated November 17, 1999, between FBCF Equipment Finance (Proprietary) Limited and
Buffels.

4.15****

Sale of Business Agreement in respect of Harties, dated August 16, 1999, between Avgold Limited, Buffels and
DRDGOLD Limited.

4.16****

Form of Restraint Agreement.

4.17****

Sale of Shares Agreement, dated September 29, 1997, between RMP Properties Limited, Randgold, Crown, City Deep
Limited, Consolidated Main Reef Mines and Estate Limited, Crown Mines Limited, RMP Properties SA Limited and
Industrial Zone Limited.

4.18*****

Form of Non-Executive Employment Agreement.

4.19*****

Form of Executive Employment Agreement.

4.20*****

Share Sale Option Agreement, dated March 12, 1993, between Newmont Proprietary Limited, Ballimore No. 56
Proprietary Limited, Clayfield Proprietary Limited and Dome Resources N.L.

160

4.21*****

Convertible Loan Agreement, dated November 19, 1997, between Tolukuma Gold Mines Proprietary Limited, Dome
Resources N.L. and Mineral Resources Development Company Proprietary Limited.

4.22*****

First Deed of Variation of Loan Agreement, between Mineral Resources Development Company Pty Limited, Dome
Resources N.L. and Tolukuma Gold Mines Pty Limited.

4.23*****

Agreement, dated February 21, 2000, between DRDGOLD Limited and Western Areas Limited.

4.24*****

Independent Auditor’s Report from PricewaterhouseCoopers to the Board of Directors and Shareholders of Crown
Consolidated Gold Recoveries Limited, dated August 28, 2000.

4.25*****

Shareholders’ Agreement, dated September 29, 2000, between DRDGOLD Limited, Fraser Alexander Tailings
(Proprietary) Limited and Mine Waste Solutions (Proprietary) Limited.

4.26*****

First Addendum to the Agreement, dated November 15, 2000, between DRDGOLD Limited and Western Areas
Limited.

4.27*****

Second Addendum to the Agreement, dated December 21, 2000, between DRDGOLD Limited and Western Areas
Limited.

4.28†

Agreement between DRDGOLD Limited, Western Areas, Limited, Consolidated African Mines Limited and JCI Gold
Limited, dated April 25, 2001.

4.29†

Addendum to the Agreement between DRDGOLD Limited, Western Areas Limited, Consolidated African Mines
Limited and JCI Gold Limited, dated August 31, 2001.

4.30†

Addendum to the Agreement between DRDGOLD Limited, Western Areas Limited, Consolidated African Mines
Limited and JCI Gold Limited, dated September 26, 2001.

4.31†

Guarantee and Cession in Securitatem Debiti Agreement between DRDGOLD Limited and Investec Bank Limited,
dated October 9, 2001.

4.32†

Second Deed of Variation of Loan Agreement between Tolukuma Gold Mines Limited, Dome Resources NL and
Mineral Resources Development Company Limited, dated June 28, 2001.

4.33†

Principal Terms and Conditions for Waiving Right to Declare Default and Enforce Security Deed under 1993 Purchase
Agreement between Newmont Second Capital Corporation, Tolukuma Gold Mines (Pty.) Limited, Dome Resources
(PNG) Pty. Limited, Dome Resources NL and DRDGOLD Limited, dated July 16, 2001.

4.34†

Loan Agreement between Bank of South Pacific Limited and Tolukuma Gold Mines Limited, dated November 8, 2001.

4.35† †

Master Finance Lease between Volvo Truck Finance Australia (Pty) Ltd and Dome Resources N.L., dated November 1,
2000.

4.36† †

Agreement between DRDGOLD Limited and Rand Refinery Ltd, dated October 12, 2001.

4.37† †

Share Purchase Agreement between Crown Consolidated Gold Recoveries Ltd, The Industrial Development
Corporation of South Africa Ltd, Khumo Bathong Holdings (Pty) Ltd and DRDGOLD Limited, dated June 12, 2002.

4.38† †

Shareholder’s Agreement between The Industrial Development Corporation of South Africa Limited, Khumo Bathong
Holdings (Pty) Ltd, Crown Consolidated Gold Recoveries Ltd, Crown Gold Recoveries (Pty) Ltd. And DRDGOLD
Limited, dated June 12, 2002.

4.39† †

Addendum to Shareholder’s Agreement between The Industrial Development Corporation of South Africa Limited,
Khumo Bathong Holdings (Pty) Ltd, Crown Consolidated Gold Recoveries Ltd, Crown Gold Recoveries (Pty) Ltd. And
DRDGOLD Limited, dated June 14, 2002.

4.40† †

Subscription Agreement between Khumo Bathong Holdings (Pty) Limited and DRDGOLD Limited, dated June 12,
2002.

4.41† †

Loan Agreement between DRDGOLD Limited and Khumo Bathong Holdings (Pty) Ltd, dated June 12, 2002.

4.42† †

Memorandum of Loan Agreement No. 1 between Durban Roodepoort Deep and Crown Gold Recoveries (Pty) Ltd,
dated June 12, 2002.

4.43† †

Memorandum of Loan Agreement No. 2 between DRDGOLD Limited and Crown Gold Recoveries (Pty) Ltd, dated
June 12, 2002.

4.44† †

Memorandum of Loan Agreement No. 3 between Crown Consolidated Gold Recoveries Ltd and Crown Gold
Recoveries (Pty) Ltd, dated June 12, 2002.

4.45† †

Loan Agreement between Industrial Development Corporation of South Africa Ltd. And Blyvooruitzicht Gold Mining
Company Ltd, dated July 18, 2002.

4.46† †

Agreement of Loan and Pledge between DRDGOLD Limited and East Rand Proprietary Mines Limited, dated
September 12, 2002.

4.47† †

Management Services Agreement between DRDGOLD Limited, Khumo Bathong Holdings (Pty) Ltd and Crown Gold
Recoveries (Pty) Ltd, dated October 1, 2002.

4.48† †

Agreement amongst DRDGOLD Limited, West Witwatersrand Gold Mines Limited and Bophelo Trading (Pty) Ltd,
dated June 12, 2002.

4.49† †

Letter Agreement between DRDGOLD Limited and The Standard Bank of South Africa, represented by its Standard
Corporate and Merchant Bank Division, dated October 7, 2002.

161

4.50† †

Memorandum of Agreement between Daun Et Cie A.G., Courthiel Holdings (Pty) Ltd, Khumo Bathong Holdings (Pty)
Ltd, Claas Edmond Daun, Paul Cornelis Thomas Schouten, Moltin Paseka Ncholo, Michelle Patience Baird, Derek
Sean Webbstock, as sellers, and Crown Gold Recoveries (Pty) Ltd, as purchaser, dated October 10, 2002.

4.51† †

Memorandum of Loan Agreement between DRDGOLD Limited and Crown Gold Recoveries (Pty) Ltd, dated October
10, 2002.

4.52† †

Letter Agreement Relating to Consultancy Arrangement between DRDGOLD Limited and Nicolas Goodwin, dated October 15, 2002

4.53† †

Management Services Agreement between DRDGOLD Limited and East Rand Proprietary Mines Ltd, dated October
10, 2002.

4.54† †

Agreement for sale of shares in Emperor Mines Limited, between DRD (Isle of Man) Limited and Kola Ventures
Limited, dated December 13, 2002.

4.55† † †

Confirmation, dated August 14, 2003, between DRDGOLD Limited and Investec Bank (Mauritius) Limited.

4.56† † †

Amendment to Confirmation, dated September 4, 2003, between DRDGOLD Limited and Investec Bank (Mauritius)
Limited.

4.57† † † †

Deed of Amalgamation for the Corporate Restructuring of Orogen Minerals (Porgera) Limited, Mineral Resources
Porgera Limited and Dome Resources (PNG) Limited, dated October 14, 2003.

4.58† † † †

Undertaking, between Oil Search Limited and DRD (Isle of Man) Limited, dated October 14, 2003.

4.59† † † †

Loan Assignment Agreement between Orogen Minerals Limited, DRD (Isle of Man) Limited and Orogen Minerals (Porgera)
Limited, dated October 14, 2003.

4.60† † † †

Agreement between Orogen Minerals Limited and DRD (Isle of Man) Limited, dated October 14, 2003.

4.61† † † †

Loan Assignment Agreement, between Dome Resources (PNG) Limited, Dome Resources Pty Limited, DRD (Isle of
Man) Limited and Tolukuma Gold Mines Limited, dated November 21, 2003.

4.62† † † †

Memorandum of Agreement made and entered into between DRDGOLD Limited, West Witwatersrand Gold Mines
Limited, Mogale Gold (Proprietary) Limited and Luipaards Vlei Estates (Proprietary) Limited dated June 6, 2003.

4.63#

Porgera Joint Venture Operating Agreement between Placer (P.N.G.) Pty Limited and Highlands Gold Properties Pty.
Limited and PGC (Papua New Guinea) Pty Limited, dated November 2, 1988.

4.64#

Agreement of Employment between DRDGOLD Limited and Mr. D.J.M. Blackmur, dated as of October 21, 2003.

4.65#

Banking facilities Agreement made and entered between DRDGOLD Limited and Standard Bank of South Africa,
Limited, dated November 14, 2003.

4.66#

Agreement of Employment between DRDGOLD Limited and Mr. M.M. Wellesley-Wood, dated as of December 1,
2003.

4.67#

Service Agreement between DRD (Isle of Man) Limited and Mr. M.M. Wellesley-Wood, dated as of December 1,
2003.

4.68#

Agreement of Employment between DRDGOLD Limited and Mr. I.L. Murray, dated as of December 1, 2003.

4.69#

Service Agreement between DRD (Isle of Man) Limited and Mr. I.L. Murray, dated as of December 1, 2003.

4.70#

Subscription and Option Agreement made and entered between DRD (Isle of Man) Limited, Net-Gold Services Limited
and G.M. Network Limited, dated January 26, 2004.

4.71#

Forward Bullion Transaction Agreements made and entered between DRDGOLD Limited and Investec Bank Limited,
dated February 4, 2004, February 6, 2004, February 10, 2004, February 11, 2004 and February 12, 2004.

4.72#

Loan Agreement made and entered between DRDGOLD Limited and Investec Bank Limited, dated June 24, 2004.

4.73#

Termination Agreement made and entered between DRDGOLD Limited, Eskom Holdings Limited and Investec Bank
Limited, dated June 24, 2004.

4.74#

Novation Agreement made and entered between J Aron & Company, Eskom Holdings Limited and Investec Bank
Limited, dated June 24, 2004.

4.75#

Memorandum of Understanding made and entered between Buffelsfontein Gold Mines Limited, Buffelsfontein Division
and The National Union of Mineworkers, The United Association of South Africa, The Mine Workers Union
(Solidarity) and The South African Electrical Workers Association regarding retrenchments associated with No. 9,
10 and 12 Shafts of Buffelsfontein Division, dated August 6, 2004.

4.76#

CCMA Settlement Agreement made and entered between Blyvooruitzicht Gold Mining Company Limited and The
United Association of South Africa, South African Equity Workers’ Association, Solidarity and The National Union
of Mineworkers regarding the retrenchment of up to 2,000 employees of the Blyvooruitzicht Gold Mining Company,
dated September 2, 2004.

4.77#

Loan Agreement made and entered between DRDGOLD Limited and Investec Bank Limited, dated September 15,
2004.

4.78#

Subscription Agreement made and entered between DRD (Isle of Man) Limited and DRDGOLD Limited, dated
September 21, 2004.

4.79#

Common Terms Agreement of Loan made and entered between DRD (Isle of Man) Limited and Investec Bank
(Mauritius) Limited, dated October 14, 2004.

162

4.80#

Facility A Loan Agreement made and entered between DRD (Isle of Man) Limited and Investec Bank (Mauritius)
Limited, dated October 14, 2004.

4.81##

Loan Agreement made and entered between DRDGOLD Limited and Investec Bank Limited, dated December 10,
2004.

4.82##

Subscription Agreement between DRDGOLD Limited and Baker Steel Capital Managers LLP (BSCM), dated April 7,
2005.

4.83##

Underwriting Agreement between DRDGOLD Limited, the Baker Steel Capital Managers LLP (BSCM) and certain
underwriters, dated April 5, 2005.

4.84##

Memorandum of Agreement between DRDGOLD Limited, Simmer & Jack Mines Limited and Simmer & Jack
Investments (Proprietary) Limited (S&J Companies), dated August 31, 2005.

4.85##

Cession Agreement entered into among The Industrial Development Corporation of South Africa Limited (IDC),
DRDGOLD Limited, Business Ventures Investment No. 750 (Pty) Ltd and Business Ventures Investment No. 751 (Pty)
Ltd (the BVI Companies), dated July 13, 2005.

4.86##

Share Sale Agreement entered into among The Industrial Development Corporation of South Africa Limited (IDC),
DRDGOLD Limited, Business Ventures Investment No. 750 (Pty) Ltd (BVI 1) and Business Ventures Investment No.
751 (Pty) Ltd (BVI 2), dated July 13, 2005.

4.87##

Term Sheet concluded between DRDGOLD Limited and Khumo Bathong Holdings (Pty) Ltd (KBH), dated
July 6, 2005.

4.88##

Facility B Loan Agreement between Investec Bank (Mauritius) Limited and DRD (Isle of Man)
Limited (DRDIOM), dated March 3, 2005.

4.89##

Convertible Loan Facility Agreement between DRDGOLD Limited and Emperor Mines Limited (Emperor), dated July
8, 2005.

4.90##

Agreement of Employment between DRDGOLD Limited and Mr. J.W.C. Sayers, dated as of August 10, 2005.

4.91##

Option Agreement entered into by and between DRDGOLD Limited and M5 Developments (Pty) Limited, dated July
21, 2005.

4.92##

Share Sale Agreement between DRD (Offshore) Limited, DRDGOLD Limited and Emperor Mines Limited, dated
November 16, 2005.

4.93###

Deed of loan, cession, payment and set-off entered between DRDGOLD Limited, East Rand Proprietary Mine
Limited, Crown Gold Recoveries (Pty) Limited and Blyvooruitzicht Gold Mining Company, dated
November 7, 2005.

4.94###

Share sale agreement between Business Venture Investments 750 (Pty) Ltd (“BVI 750”) and DRDGOLD South
African Operations (Pty) Limited, dated November 8, 2005.

4.95###

Subscription agreement between DRDGOLD Limited and DRDGOLD South African Operations (Pty) Limited,
dated November 9, 2005.

4.96###

Share sale agreement between Crown Consolidated Gold Recoveries Limited and DRDGOLD South African
Operations (Pty) Limited, dated November 14, 2005.

4.97###

Subscription agreement between DRDGOLD South African Operations (Pty) Limited and Khumo Gold SPV (Pty)
Limited, dated November 18, 2005.

4.98###

Subscription agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited, dated
November 18, 2005.

4.99###

Cession agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited and Khumo Bathong
Holdings (Pty) Limited, dated November 18, 2005.

4.100###

Cession Agreement between DRDGOLD Limited and The Industrial Development Corporation of South Africa
Limited and Business Venture Investment No 750 (Pty) Limited and Business Venture Investment No 751 (Pty)
Limited, dated November 18, 2005.

4.101###

Option agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited and DRDGOLD South
African Operations (Pty) Limited, dated November 18, 2005.

4.102###

Offer of Class A Preference share between Khumo Gold SPV (Pty) Limited and East Rand Proprietary Mines
Limited, dated November 18, 2005.

4.103###

Offer of Class A Preference between Khumo Gold SPV (Pty) Limited and Blyvooruitzicht Gold Mining Company
Limited, dated November 18, 2005.

4.104###

Offer of Class A Preference between Khumo Gold SPV (Pty) Limited and Crown Gold Recoveries (Pty) Limited,
dated November 18, 2005.

4.105###

Shareholders agreement between DRDGOLD Limited and Khumo Gold SPV (Pty) Limited and DRDGOLD South
African Operation (Pty) Limited, dated November 24, 2005.

4.106###

Sale and subscription agreement between DRDGOLD Limited and DRD (Offshore) Limited, dated January 4, 2006.

4.107###

Share Sale agreement between DRD (Isle of Man) Limited and DRD (Offshore) Limited, dated February 22, 2006.

163

4.108###

Restructure deed between DRD (Offshore) Limited and DRD (Isle of Man) Limited and Emperor Mines Limited
and Emperor Gold Mining Company Limited and Australia and New Zealand Banking Group Limited, dated
February 24, 2006.

4.109###

Facility agreement between DRD (Porgera) Limited and Tolukuma Gold Mines Limited and Australia and New
Zealand Group Limited, dated March 20, 2006.

4.110###

Settlement of loans agreement between DRD (Isle of Man) Limited and DRD (Offshore) Limited, dated March 23,
2006.

8.1###

List of Subsidiaries.

12.1###

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

12.2###

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

13.1###

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

13.2###

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

15.1#

Crown Gold Recoveries (Pty) Limited Consolidated Financial Statements for the years ended June 30, 2004 and 2003.

16.1##

15.2##

Emperor Mines Limited Consolidated Financial Statements for the years ended June 30, 2005 and 2004.

Crown Gold Recoveries (Pty) Limited Consolidated Financial Statements for the years ended June 30, 2005, 2004 and 2003.

__________
*

Incorporated by reference to our Registration Statement (File No. 0-28800) on Form 20-F.

**

Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 1997.

***

Incorporated by reference to our Registration Statement (File No. 333-9242) on Form F-6.

****

Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 1999.

***** Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2000.
†

Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2001.

† †

Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2002.

† † † Incorporated by reference to Amendment No. 4 of our Annual Report on Form 20-F for the fiscal year ended June 30, 2002.
† † † † Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2003.
#

Incorporated by reference to Amendment No. 3 of our Annual Report on Form 20-F for the fiscal year ended June 30, 2004.

##

Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2005.

###

Filed herewith.

164

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and

authorized the undersigned to sign this annual report on its behalf.

DRDGOLD LIMITED

By: /s/ M.M. Wellesley-Wood

M.M. Wellesley-Wood
Chief Executive Officer

By: /s/ J.W.C. Sayers

J.W.C. Sayers
Chief Financial Officer

Date: December 19, 2006