Published: 23 August 2013

DRDGOLD Limited, South Africa's fourth largest gold miner, has received expression of interest from potential acquirers of its Zimbabwean assets.

DRDGold is selling its Zimbabwean exploration projects and the ERPM assets in South Africa.

"We have received expressions of interest from potential acquirers of these assets, and negotiations to conclude the sale of our stake are continuing," said the company in its year end financial statement.

"We recorded an impairment of R50.1 million against our Zimbabwe exploration assets," said the gold miner in a statement.

DRDGold wants to recoup the R40m it has spent on exploration in Zimbabwe and has packaged its five assets there for sale. One option may be selling them for shares in another company, taking exploration spend off its own balance sheet.

By selling the Zimbabwean assets, the old ERPM underground mine and the deep-level exploration prospects in South Africa, DRDGold will become a pure surface-treatment operation.

Sometime this year 2013, RioZim Limited signed a partnership agreement with DRDGold, as it begins a restructuring exercise likely to split the group into several stand-alone units.

DRD Gold is a 50 percent partner in a greenstone belt project, Chizim Gold, in Zimbabwe. It is, however, planning to relinquish its interest in this operation as it moves to become a fully fledged dump reclamation company.

The deal with RioZim appears to be in line with this strategy.

RioZim's chief executive officer, Asthton Ndlovu, told shareholders at the company's annual general meeting last week that the restructuring would see the creation of RioGold, which would partner with investors only interested in the group's gold assets.

"We have a partnership with DRD Gold Limited and have already signed a memorandum of understanding with them on the treatment of the dump at Renco," Ndlovu said.

He said DRD Gold had carried out an analysis of the dump and RioZim was now awaiting a proposal on how to proceed with dump treatment.

DRD Limited is a mid-tier, unhedged gold producer and a world leader in surface gold tailings retreatment.

Ndlovu said the new strategy for RioZim, which is meant to unlock shareholder value, would be to break the company into resource related business units, which have the potential to attract investors and clear the mining company's debt currently standing at US$42 million.

- businessdaily