DRDGOLD Limited 20F 2007 Annual report

As filed with the Securities and Exchange Commission on December 14, 2007

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE
ACT OF 1934

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

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

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

For the fiscal year ended June 30, 2007

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, 2007 the Registrant had outstanding 370,341,981 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

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 the past 90 days. Yes

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

Contact details:

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

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

Telephone: +2711 219 8700

TABLE OF CONTENTS

Page

PART I

ITEM 1.

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

ITEM 2.

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

ITEM 3.

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

3A.

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

3B.

Capitalization

And Indebtedness......................................................................................................................................

3C.

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

3D.

Risk

Factors .......................................................................................................................................................................

ITEM 4.

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

4A.

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

4B.

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

4C.

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

4D.

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

ITEM 4A.

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

ITEM 5.

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

5A.

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

5B.

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

100

5C.

Research

And

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

104

5D.

Trend

Information...........................................................................................................................................................

104

5E.

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

104

5F.

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

104

5G.

Safe

Harbor .....................................................................................................................................................................

104

ITEM 6.

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

105

6A.

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

105

6B.

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

109

6C.

Board

Practices ................................................................................................................................................................

110

6D.

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

114

6E. Share

Ownership...............................................................................................................................................................

115

ITEM 7.

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

117

7A.

Major

Shareholders..........................................................................................................................................................

117

7B.

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

118

7C.

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

120

ITEM 8.

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

121

8A.

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

121

8B.

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

121

ITEM 9.

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

122

9A.

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

122

9B.

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

122

9C.

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

123

9D.

Selling

Shareholders .........................................................................................................................................................

123

9E. Dilution ............................................................................................................................................................................

123

9F.

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

123

ITEM 10.

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

124

10A.

Capital......................................................................................................................................................................

124

10B.

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

124

10C.

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

126

10D.

Exchange

Controls.............................................................................................................................................................

130

10E.

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

132

10F.

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

137

10G.

Statement

Experts ........................................................................................................................................................

137

10H.

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

137

10I.

Subsidiary

Information .....................................................................................................................................................

137

ITEM 11.

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

138

ITEM 12.

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

140

PART II

ITEM 13.

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

141

ITEM 14.

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

141

ITEM 15.

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

141

ITEM 16A.

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

142

ITEM 16B.

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

142

ITEM 16C.

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

142

ITEM 16D.

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

143

ITEM 16E.

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

143

PART III

ITEM 17.

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

144

ITEM 18.

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

F-pages

ITEM 19.

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

145

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, the Company’s shareholding in Emperor was 39.52% and consequently the Company’s

investment in Emperor was accounted for by the equity method in the Company’s consolidated financial statements. On April 6,
2006 the Company’s 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 Company and its subsidiaries from that date. Rule 3-09 of Regulation S-X
required the Company to include in the 2006 Form 20-F separate audited 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 Company did not include the audited Emperor Financial Statements in the 2006 Form 20-F, but in an explanatory note the
Company stated that “the Emperor Financial Statements are currently unavailable and have been omitted from this report. Upon
the Emperor Fi nancial Statements becoming available we will file an amendment to this Annual Report to include such financials
statements.” The Company disposed of its interest in Emperor in October 2007.

Despite the Company’s good faith efforts, the Company has had insufficient access to records to prepare the audited

Emperor Financial Statements. On December 13, 2007, the Company filed comparable unaudited Emperor Financial Statements
as an exhibit to Amendment No.1 of its 2006 Form 20-F. The unaudited Emperor Financial Statements have been incorporated by
reference in this Annual Report.

Pursuant to Rule 3-13 of Regulation S-X (“Rule 3-13”) the Company has delivered to the United States Securities and

Exchange Commission, or the Commission, a written request that the Commission permit the omission of the audited Emperor
Financial Statements from the 2006 Form 20-F and their substitution with the comparable unaudited Emperor Financial
Statements that the Company is filing as an exhibit to Amendment No. 1 of its 2006 Form 20-F. The Company cannot predict
when the Commission will respond to the Company’s Rule 3-13 request or, if the Commission responds, whether it will permit the
omission of the audited Emperor Financial Statements from the 2006 Form 20-F and their substitution by the unaudited Emperor
Financial Statements. Because it is not possible for the Company to prepare the audited Emperor Financial Statements, if the
Commission does not permit omission of such financial statements and their substitution by the unaudited Emperor Financial
Statements the Company will not have satisfactorily filed all information required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934, or the Exchange Act.

Preparation of Financial Information

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

Accordingly, our books of account are maintained in South African Rand. Our financial statements 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 2007 fiscal year are
R7.076 per $1.00, A$1.178 per $1.00 and K2.909 per $1.00, which reflect the noon buying rate in New York City at June 30, 2007.
For statement of operations amounts, the average conversion rate for Rand during the 2007 fiscal year of R7.219 per $1.00, A$1.273
per $1.00 and K2.839 per $1.00 is used. The rates used for currency translations for transactions occurring during the 2006 and 2005
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 b e
converted at the rates indicated into Dollars.

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

which have been determined using industry guidelines promulgated by the Gold Institute and are not US GAAP financial
measures. An investor should not consider these items in isolation or as alternatives to cash and cash equivalents, 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. See “Glossary of Terms and Explanations” and Item 5A.: “Operating and
Financial Review and Pros pects – Cash costs and total costs per ounce - Reconciliation of cash costs per ounce, total costs and
total costs per ounce.”

DRDGOLD Limited

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

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

Special Note Regarding Forward-Looking Statements

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

regarding future events or other future financial performance and information relating to us that are based on the beliefs of our
management, as well as assumptions made by and information currently available to our management. Some of these forward-
looking statements include phrases such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “should,” or
“will continue,” or similar expressions or the negatives thereof or other variations on these expressions, or similar terminology, or
discussions of strategy, plans or intentions. These statements also include descriptions in connection with, among other things:

• estimates regarding future production and throughput capacity;

• our anticipated commitments;

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

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

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

assumptions. Many factors could cause our actual results, performance or achievements to be materially different from any future
results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others:

• adverse changes or uncertainties in general economic conditions in the markets we serve;

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

• changes in our competitive position;

• changes in business strategy;

• any major disruption in production at our key facilities; or

• adverse changes in foreign exchange rates and various other factors.

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

results, causing these results to differ materially from these expressed in any forward-looking statements. These factors are not
necessarily all of the important factors that could cause our results to differ materially from those expressed in any forward-looking
statements. Other unknown or unpredictable factors could also have material adverse effects on future results.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date

hereof. We do not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events.

Imperial units of measure and metric equivalents

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

Metric Imperial Imperial Metric

1 metric tonne

1.10229 short tons

1 short ton

0.9072 metric tonnes

1 kilogram

2.20458 pounds

1 pound

0.4536 kilograms

1 gram

0.03215 troy ounces

1 troy ounce

31.10353 grams

1 kilometer

0.62150 miles

1 mile

1.609 kilometres

1 meter

3.28084 feet

1 foot

0.3048 metres

1 liter

0.26420 gallons

1 gallon

3.785 liters

1 hectare

2.47097 acres

1 acre

0.4047 hectares

1 centimeter

0.39370 inches

1 inch

2.54 centimetres

1 gram/tonne

0.0292 ounces/ton

1 ounce/ton

34.28 grams/tonnes

0 degree Celsius

32 degrees Fahrenheit

0 degrees Fahrenheit

- 18 degrees Celsius

Glossary of Terms and Explanations

Adularia ............................................ A transparent or translucent variety of common feldspar.
Archaean........................................... A period of the geological time scale between 2.5 and 4.6 billion years ago, the earliest part of the

Precambrian.

Assaying ...........................................   The chemical testing process of rock samples to determine mineral content.
Auriferous.........................................     Containing gold.
Bonanza ...........................................     Unexpected high-grade occurrences.
Care and maintenance ......................     Cease active mining activity at a shaft, but continue to incur costs to ensure that the Ore Reserves

are open, serviceable and legally compliant.

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

equal to a projected gold price per ounce.

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

Reserves for which (a) the quantity is computed from dimensions revealed in outcrops, trenches,
workings or drill holes; grade and/or quality are computed from the results of detailed sampling
and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic
character is so well defined that size, shape, depth, and mineral content of Ore Reserves are
well-established.

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

that used for Proven Ore Reserves, but the sites for inspection, sampling, and measurement are
farther apart or are otherwise less adequately spaced. The degree of assurance, although lower
than that for Proven Ore Reserves, is high enough to assume continuity between points of
observation.

oz/t .................................................... Ounces per ton.
Reef................................................... A gold-bearing sedimentary horizon, normally a conglomerate band that may contain economic

levels of gold.

Refining ............................................      The final purification process of a metal or mineral.
Rehabilitation ...................................      The process of restoring mined land to a condition approximating its original state.
Reserves............................................      That part of a mineral deposit which could be economically and legally extracted or produced at

the time of the reserve determination.

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

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

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

shaft is also used for ventilation and as an auxiliary exit. It is equipped with a hoist system that
lowers and raises a cage in the shaft, transporting equipment, personnel, materials, ore and waste.
A shaft generally has more than one compartment.

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

make room for subsequent mining activities. Most of the blasted ore is left to accumulate in the
stope and is drawn after the stope is completely mined.

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

recovered.

Sloughing..........................................       The localized failure of part of the slimes dam wall caused by a build up of water within the dam.
Stope .................................................     Underground production working area on the Ore Horizon.
Sub-level stoping..............................       A method of mining in which the ore is blasted, on multiple levels in one stope, and drawn off as

it is blasted, leaving an open stope.

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

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

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

been extracted.

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

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

Total costs per 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
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.

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

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

Waste rock ........................................ Non-auriferous rock.
Yield ................................................. The amount of recovered gold from production generally expressed in ounces or grams per ton of

ore.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not

applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not

applicable.

ITEM 3. KEY INFORMATION

3A. SELECTED FINANCIAL DATA

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

2006 and 2005 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,
2007 and 2006 and for the years ended June 30, 2007, 2006 and 2005. The selected consolidated financial data as of June 30, 2004
and 2003 and for the years ended June 30, 2004 and 2003 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.

Selected Consolidated Financial Data

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

Year ended June 30,

2007

2006

2005

2004

2003

$’000

Consolidated Statement of Operations Data

Revenues........................................................................ 237,274

177,870

100,816 122,809

109,419

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

(218,163)

(165,365)

(100,310) (111,376)

(90,761)

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

(33,921)

(2,512)

(23,211) (34,741)

47,237

(Loss)/profit from continuing operations before tax and

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

(36,181)

(1,447)

(40,698) (29,419)

59,406

Income and mining tax benefit/(expense)..................... 410

526

(247) (5,755)

(15,830)

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

(4,501)

(8,827)

(9,452)

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

7,654

(931)

(2)

(7)

Net (loss)/profit from continuing operations applicable

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

(28,117)

(6,353)

(40,947)

(44,008)

34,124

Loss from discontinued operation, net of taxes ............ (104,725)

(17,478)

(40,842) (14,890)

(19,992)

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

(132,842)

(23,831)

(81,789)

(58,898)

13,959

Basic (loss)/profit per share - continuing operations

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

(8)

(2)

(16) (16)

Basic loss per share - discontinued operation (cents)...

(32)

(6)

(16)

(11)

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

(40)

(8)

(32)

(27)

Diluted (loss)/profit per share - continuing operations

(cents) ......................................................................... (8)

(2)

(16)

Diluted loss per share - discontinued operation (cents)

(32)

(6)

(16)

(11)

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

(40)

(8)

(32)

(27)

Consolidated Balance Sheet Data

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

19,354

54,912

36,085 22,453

44,423

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

231,275

406,221

238,257

282,735

207,335

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

(239,715)

(272,336)

(158,330)

(200,194)

(197,145)

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

(50,252)

(69,314)

(59,865)

(63,149)

Stockholders' (equity)/deficit ........................................ 9,318

(103,014)

(79,053)

(81,612)

(10,190)

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

(231,275)

(406,221)

(238,257)

(282,735)

(207,335)

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

370,341,981

320,035,078

296,206,048

233,307,667

184,222,073

Non-US GAAP Financial Data

Working capital (deficit)/surplus

................................. (66,980)

(45,468)

11,597 (24,993)

2,419

Cash costs per ounce

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

576

498

421 349

275

Cash costs per ounce

- discontinued operation............ 625

355

346 339

312

Cash costs per ounce

.................................................... 586

458

374 343

297

Total costs per ounce

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

722

541

594 477

151

Total costs per ounce

- discontinued operation ........... 1,977

526

453 396

321

Total costs per ounce

.................................................... 981

536

506 428

250

Comparatives have been restated for the reclassification of Porgera and Vatukoula as discontinued operations.

Working capital (deficit)/surplus is a non-US GAAP financial measure of performance that we use to determine our liquidity and

is defined as current assets less current liabilities.

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.”

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.”

3B. CAPITALIZATION AND INDEBTEDNESS

Not

applicable.

3C. REASONS FOR THE OFFER AND 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; 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 in fiscal 2007, 2006 and 2005 (based on the average exchange rates at June 30 of each year), 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 2006 and fiscal 2007, the

Rand depreciated against the Dollar by 3.3% and 12.3% respectively (based on average exchange rates at June 30 of each year). As at
June 30, 2007, even though the Rand depreciated against the Dollar during the fiscal year, it has appreciated by 47.3% since 2001
when it reached R13.44 = $1.00 in December 2001 (based on closing rates).

A decrease in the gold price and a strengthening of the foreign exchange rate of the Rand could result in a decrease in

profitability. In fiscal 2007 and 2006, 70% and 60% of production 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
operations could continue to experience a reduction in cash flow and profitability and this would negatively and adversely affect our
business, operating results and financial condition.

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

We incurred net losses of $132.8 million for fiscal 2007, $23.8 million for fiscal 2006 and $81.8 million for fiscal 2005, 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. 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. On
March 28, 2007 Emperor Mines Limited, or Emperor, completed an agreement to sell all its Fijian assets, including the Vatukoula

mine, to Westech Gold (Pty) Limited, a private company incorporated in Australia. Excluding the Vatukoula mine, production at

the Australasian Operations decreased by 37% in fiscal 2007, mainly as a result of suspending mining activity from the Gulbadi area
at our Tolukuma operation. In April 2007, Emperor announced the sale of its 20% interest in the Porgera Joint Venture to the Barrick
Gold Corporation, a transaction that was approved by DRDGOLD shareholders at a general meeting held on July 27, 2007. This
transaction was completed on August 17, 2007. Furthermore, on October 23, 2007, we announced the disposal of our remaining
interest in Emperor.

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

control.

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

volumes, costs and seismicity. If we are unable to meet our cash requirements out of cash flows generated from our operations, we
would need to fund our cash requirements from alternative financing and we cannot guarantee that any such financing would be on
acceptable terms, or would be permitted under the terms of our existing financing arrangements, or would be available at any terms.
In the absence of sufficient cash flows or adequate financing, our ability to respond to changing business and economic conditions,
make future acquisitions, react to adverse operating results, meet our debt service obligations and fund required capital expenditures
or increased working capital requirements may be adversely affected.

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

financial condition.

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

and acquisition efforts in the regions in which we operate and any new regions that we identify. In fiscal 2007, our ore reserves
decreased by 28.6% primarily as a consequence of the closure and subsequent disposal of the Vatukoula mine and our interest in
the Porgera Joint Venture. In fiscal 2006, our ore reserves increased with the acquisition of Crown Gold Recoveries (Pty) Limited,
or Crown, East Rand Proprietary Mines Limited, or ERPM and Emperor. In fiscal 2005, 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, due to the age of these mines and safety concerns and could result in increased
production co sts and reduced profitability. We can make no assurances that any new or ongoing exploration programs will result
in new mineral producing operations that will sustain or increase our Ore Reserves. A failure to discover or acquire new Ore
Reserves in sufficient quantities to maintain or grow the current level of our reserves will negatively affect our future cash flow,
results of operations and financial condition.

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

and integrating them with our existing operations.

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.

The ability to grow through acquisitions 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 all 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 may need to improve our internal controls over financial reporting and our independent auditors may not be able to

attest to their effectiveness.

We have evaluated our internal controls surrounding the financial reporting process so that management can attest to the

effectiveness of these controls, as required by Section 404 of the United States Sarbanes-Oxley Act of 2002. During the course of this
evaluation, we have identified areas within our internal controls over the financial reporting process that need improvement (refer to
Item 15.: "Controls and Procedures"). As we have identified deficiencies within our internal controls surrounding the financial
reporting process and implemented the appropriate remediation steps to address these deficiencies, 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 at the fiscal 2008 deadline. 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 and 2007, 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 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 external advisers with US GAAP expertise to
supplement our internal resources.

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.

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. Similarly two year wage
agreements were entered into at Crown and ERPM. Those wage agreements have all since expired and new agreements have been
negotiated. For Blyvoor, a two-year agreement (effective from July 1, 2007) with NUM, UASA and Solidarity was signed on
October 31, 2007. This agreement will result in effective wage increases of 9.5% and 7.5% for fiscal 2008 and fiscal 2009,
respectively. Similarly , two new wage agreements (effective from October 1, 2007) have been signed for Crown and ERPM. These
agreements will result in effective wage increases of 9.6% and 9.3% for Crown in fiscal 2008 and fiscal 2009, respectively and in
effective wage increases of 14.2% and 10.8% for ERPM in fiscal 2008 and fiscal 2009, respectively. In the past, we have been
impacted by price increases imposed by our South African steel suppliers and parastatal entities which supply us with electricity and
water. These, combined with the increases in labor costs, could result in our costs of production increasing above the gold price
received. Discussions with suppliers to moderate price increases have been unsuccessful in the past.

The costs of fuels, lubricants and other oil and petroleum based products have increased in fiscal 2007 as a result of the

general increase in the cost of crude oil in global markets. In the event that the increase in crude oil prices continues, this could have a
significant impact on our production costs. Our initiatives to reduce costs may not be sufficient to offset the increases imposed on our
operations and could negatively affect our business, operating results and financial condition.

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

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

various state, provincial and local laws, which regulate air and water quality, hazardous waste management and environmental
rehabilitation and reclamation. Our mining and related activities impact the environment, including land, habitat, streams and

environment near the mining sites. Delays in obtaining, or failures to obtain government permits and approvals may adversely
impact our operations. In addition, the regulatory environment in which we operate could change in ways that could substantially
increase costs to achieve compliance, therefore having a material adverse effect on our profitability.

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

estimated these liabilities at $83.2 million and included them in the discounted provision for the Group’s environmental
rehabilitation, reclamation and closure costs of $43.4 million on our balance sheet as at June 30, 2007. 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.

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. 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.

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 and because our marginal mines predominantly are comprised of aged infrastructures, we

inherently run the risk of exposure to greater health, safety and environmental liabilities which we closely monitor but are unable to
fully mitigate.

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

Regrettably eight people died in work-related incidents during fiscal 2007, compared to seven fatalities in fiscal 2006. Three

of these fatalities were largely attributable to seismicity-related rockfalls. The other five fatalities resulted from one noxious fumes
incident, one truck and tramming incident, one rigging incident and two fatalities in a helicopter accident. 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, including temporary suspension of underground mining, 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.

Because of the nature of our business, we may become subject to liability for pollution or other hazards against which we

are unable to insure, including those in respect of past mining activities. Our existing property 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 $212 million (R1.5 billion). Claims for each and every event are limited by the insurers to $141 million (R1.0 billion). 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 amount being $5.7 million (R40.0 million). A specific
limitation of $14.1 million (R100.0 million) applies for loss suffered or claims as a result of any seismic event smaller th an 4.5 on the
Richter scale. General liability insurance cover is in the amount of $141 million (R1.0 billion).

Future insurance coverage may not cover the extent of claims brought against us, including claims for environmental,

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

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

The success of our business will depend, in large part, upon the skills and efforts of a small group of management and

technical personnel including our Chief Executive Officer and our Chief Financial Officer. Factors critical to retaining our present
staff and attracting additional highly qualified personnel include our ability to provide these individuals with competitive
compensation arrangements, equity participation and other benefits. If we are not successful in retaining or attracting highly qualified
individuals in key management positions, our business may be harmed. We do not maintain “key man” life insurance policies on any
members of our executive team. The loss of any of our key personnel could prevent us from executing our business plans, which may
result in decreased production, increased costs and decreased profitability.

Risks related to the gold mining industry

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

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

control, including:

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

banks of their gold holdings;

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

• speculative trading activities in gold;

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

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

• international or regional political and economic events or trends;

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

• financial market expectations regarding the rate of inflation; 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.

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

unproductive.

We must continually replace Ore Reserves that are depleted by production. Notably during fiscal 2005, we lost access to

the ore reserves from our North West Operations since Buffelsfontein, which owns the North West Operations, was placed into
provisional liquidation on March 22, 2005. Additionally, with the disposal of the Vatukoula mine during fiscal 2007 and of our
remaining interest in Emperor in fiscal 2008, we have lost access to our Australasian Operations’ Ore Reserves. Our future growth
and profitability will depend, in part, on our ability to identify and acquire additional mineral rights, and on the costs and results of
our continued exploration and development programs. Gold mining companies may undertake exploration activities to discover
gold mineralization, which in turn may give rise to new gold bearing ore bodies. Exploration is highly speculative in nature and
requires substantial expenditure for drilling, sampling and analysis of ore bodies in order to quantify the extent of the gold reserve.
Man y 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 i ncurred on unsuccessful exploration activities are, as a result, not likely to be recovered and we could
incur a write-down on our investment in that interest or the irrecoverable loss of funds spent.

There is uncertainty with our Ore Reserve estimates.

Our Ore Reserve figures described in this document are the best estimates of our current management as of the dates

stated and are reported in accordance with the requirements of Industry Guide 7 of the SEC. These estimates may be imprecise
and may not reflect actual reserves or future production.

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

examinations, reserve estimates may have to be adjusted and mining plans may have to be altered in a way that might ultimately
cause our results of operations and financial condition to decline. Moreover, if the price of gold declines, or stabilizes at a price that is
lower than recent levels, or if our production costs, and in particular our labor costs, increase or recovery rates decrease, it may
become uneconomical to recover Ore Reserves containing relatively lower grades of mineralization. Under these circumstances, we
would be required to re-evaluate our Ore Reserves. Short-term operating factors relating to the Ore Reserves, such as the need for
sequential development of ore bodies and the processing of new or different grades, may increase our production costs and decrease
our profitability during any given period. These factors have and could result in reductions in our Ore Reserve estimates, which
could in turn adversely impact upon the total value of our mining asset base and our business, operating results and financial
condition.

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

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

rock dumps and tailings dams. These operations are exposed to numerous risks and events, the occurrence of which may result in the
death of, or personal injury to, employees, the loss of mining equipment, damage to or destruction of mineral properties or
production facilities, monetary losses, delays in production, environmental damage, loss of the license to mine and potential legal
claims. The risks and events associated with the business of gold mining include, but are not limited to:

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

other hazardous material into the air and water;

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

closure of sections or an entire underground mine;

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

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

contamination;

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

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

pit walls and tailings dams; and

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

In addition, deep level underground mines in South Africa, as compared to other gold mining countries, involve

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

Risks related to doing business in South Africa

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 significantly
however, as of June 2007, the Consumer Price Inflation Index, or CPIX, stood at 6.4%, up from 4.8% since June 2006. Analysts
expect inflation to decrease slightly this year but still believe that the CPIX target band would be in the region of 3-6%, partly due to
the rapid growth in the private sector. As of September 2007, the CPIX rate further increased to 6.7% which is higher than the
maximum analyst prediction of 6%. A return to high levels of inflation in South Africa for prolonged periods, without a concurrent
devaluat ion of the Rand or increase in the price of gold, could result in an increase in our costs which could reduce our profitability.

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

Acquired Immune Deficiency Syndrome, or AIDS, and tuberculosis which is closely associated with the onset of the disease

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

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

Government Regulation

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

government’s administrative bodies. These involve directives in respect of health and safety, the mining and exploration of minerals,
and managing the impact of mining operations on the environment. A variety of permits and authorities are required to mine lawfully,
and the government enforces its regulations through the various government departments.

The Mineral and Petroleum Resources Development Act, 2002

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

places all mineral and petroleum resources under the custodianship of the state. Private title and ownership in minerals, or the “old
order rights,” are to be converted to “new order rights,” essentially the right to mine. The MPRD Act allows the existing holders of
mineral rights a period of five years to apply for the conversion of used old order rights, and one year for the conversion of unused
old order rights. Once these periods have lapsed, the holders may have to compete to acquire the right to mine minerals previously
held under old order rights. During fiscal 2008, 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 if enforceable the level of compensation we will receive, if any. Factors that are taken into account
are market value, as well as the history of acquisition of these rights.

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

rights. The area covered by the new order rights may be reduced by the State if it finds that the prospecting or mining work
program submitted by an applicant does not substantiate the need to retain the area covered by the old order rights. The duration
of the new order rights will no longer be perpetual but rather, in the case of new order mining rights, for a maximum of 30 years
with renewals of up to 30 years each and, in the case of prospecting rights, up to five years with one renewal of up to three years.
In addition, the new order rights will only be transferable subject to the approval of the Minister of Minerals and Energy. Mining
or prospecting must commence within one year or 120 days, respectively, of the mining right or prospecting right becoming
effective, and must be conducted continuously and actively thereafter. The new rights can be suspended or cancelled by the
Minister of Minerals and Energy in the event of a breach or, in the case of mining rights, non-optimal mining in accordance with the
mining work program.

The implementation of the MPRD Act will result in significant adjustments to our property ownership structure. 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 the 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 published. The bill provides for a royalty of 1.5% of gross revenue per year, payable quarterly. The royalty is tax deductible and
the cost after tax amounts to a rate of between 0.825% and 0.975% at the prevailing marginal tax rates applicable to the group. If the
bill is passed in its current form by Parliament, the payment of royalties will commence on May 1, 2009. The introduction of the
proposed revenue based royalty would have an adverse effect on the business, operat ing 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

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

The goals set by the Mining Charter include that each mining company must achieve 15 percent ownership by historically

disadvantaged South Africans of its South African mining assets within five years and 26 percent ownership within ten years from
May 1, 2004. This is to be achieved by, among other methods, the sale of assets to historically disadvantaged persons on a willing
seller/willing buyer basis at fair market value. When considering applications for the conversion of existing rights, the State will

take a “scorecard” approach, evaluating the commitments of each company to the different facets of promoting the objectives of
the Mining Charter. Failure on our part to comply with the requirements of the Mining Charter and the “scorecard” could subject
us to negative consequences. We may incur expenses in giving additional effect to the Mining Charter and the “scorecard”,
including costs which we may incur in facilitating the financing of initiatives towards ownership by historically disadvantaged
persons. There is also no guarantee that any steps we might take to comply with the Mining Charter would ensure that we could
successfully acquire new order mining rights in place of our existing rights. In addition, the terms of such new order rights may
not be as favorable to us as the terms applicable to our existing rights. We run the risk of losing our mining rights if we do not
comply with the requirements stipulated in the Mining Charter. This could have an adverse affect on our business, operating
results and financial condition.

Land claims

Our privately held land and mineral rights in South Africa could be subject to land restitution claims under the Restitution of

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

Since our South African labor force has substantial trade union participation, we face the risk of disruption from labor

disputes and new South African labor laws.

Labor costs constitute 39% of our production costs for fiscal 2007, 35% for fiscal 2006 and 51% for fiscal 2005. As of

June 30, 2007, we employ and contract 8,740 people. Of these, 7,971 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. 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 events 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, 2007, only 21% 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.

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.

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 a 74% interest in DRDGOLD South African Operations (Pty) Limited,
or DRDGOLD SA. Of the remaining 26%, 20% is held by our Black Economic Empowerment, or BEE, partner Khumo Gold SPV
(Pty) Limited, or Khumo Gold and 6% is held by an employee trust. DRDGOLD SA wholly owns and operates Blyvooruitzicht Gold
Mining Company Limited, or Blyvoor, East Rand Proprietary Mines Limited, or ERPM, and Crown Gold Recoveries (Pty) Limited,
or Crown. In Australasia as at June 30, 2007, we held a 78.72% interest in Emperor Mines Limited, or Emperor, which owned and
operated the Tolukuma gold mine in Papua New Guinea, or PNG, and also held a 20% interest in the unincorporated Porgera Joint
Venture in PNG, managed by Barrick Gold Corporation, or Barrick, which was sold on August 17, 2007. We sold our entire
shareholding in Emperor on October 22, 2007.

We are a public company, incorporated on February 16, 1895, as Durban Roodepoort Deep, Limited, and our shares were

listed on the JSE in that same year. In 1898, our milling operations commenced with 30 stamp mills and in that year we treated
38,728 tons of ore and produced 22,958 ounces of gold. In South Africa, we have focused our operations on the West Witwatersrand
basin which has been a gold production region for over 100 years.

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

Market (formerly the Nasdaq SmallCap Market), the Marche Libre on the Paris Bourse, the Brussels Bourse in the form of
International Depository Receipts, the Over The Counter, or OTC, market in Berlin and Stuttgart and the Regulated Unofficial
Market on the Frankfurt Stock Exchange.

Our registered office and business address is 299 Pendoring Avenue, Blackheath, Randburg, South Africa, 2195. The postal

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

South African Operations

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

underground operating mine located within the Witwatersrand Basin, exploiting gently to moderately dipping gold bearing
quartz pebble conglomerates in addition to certain surface sources.

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

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

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

October 10, 2002, by Crown.

During fiscal 2007, we restructured our South African operations (see Item 4A.: “History and Development of the

Company - Important Events in Our Development Generally and in the Current Year”) so that we now hold a 74% (2006: 85%)
interest in a newly created company, DRDGOLD SA, which in turn holds a 100% stake in ERPM, Crown and Blyvoor.

Australasian Operations

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

$3.3 million in cash), an underground mine in PNG, provided an initial base in the Australasian region and led to the
acquisition of a 20% interest in the unincorporated Porgera Joint Venture.

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

shares and $60.3 million in cash.

• The Vatukoula mine, a multi-shaft underground mine in Fiji, was acquired during fiscal 2006 when we concluded a sale

and purchase agreement with Emperor. Pursuant to this agreement we initially held 88.3% of Emperor which in turn held a
100% interest in Tolukuma, a 100% stake in the Vatukoula mine, 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.

In March 2007, Emperor sold all of its Fijian assets, including the Vatukoula mine to Westech Gold (Pty) Limited. Under

the agreement Emperor sold 100% of its shares in its Australian subsidiary which in turn owned the Fijian assets. The sale was
completed on March 28, 2007. On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on
October 22, 2007, we sold our entire shareholding in Emperor to various institutional investors.

Important Events in Our Development Generally and in the Current Year

Purchase of the Top Star Dump

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

remaining extent of Erf 1 Park Central Township, better known as “The Top Star Dump”, in central Johannesburg for an amount of
R8.0 million ($1.1 million). In addition, a further R24.0 million ($3.4 million) is expected to be spent on the infrastructure that will
enable us to process the dump. The Top Star Dump has been evaluated geostatistically by us and reviewed independently by RSG
Global and has a probable reserve of 5.1 Mt, at a grade of 0.755 g/t.

On August 30, 2006, the Provincial Heritage Resources Authority of Gauteng, or PHRAG, published a notice in the

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

6% Senior Convertible Notes

On November 15, 2006, we repaid, in full, our outstanding 6% Senior Convertible Notes which matured on November 12,

2006. We 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. Our obligations under the Senior Convertible Notes have now been satisfied
and discharged.

West Rand Joint Venture

On April 26, 2007, we and Mintails Limited, or Mintails, announced the formation of a joint venture company to explore,

evaluate and potentially mine gold and uranium by opencast and underground mining methods in the Western Rand Goldfield of
South Africa's Witwatersrand Basin. Following discussions initiated during the fourth quarter of 2006, the joint venture company
stakeholders, we, Mintails SA (Pty) Limited, or Mintails SA, a wholly owned subsidiary of Mintails, and Mineral and Mining
Reclamation Services (Pty) Ltd, or MMRS, have agreed to consolidate their West Rand Goldfield projects comprising Rand Leases,
Durban Roodepoort Deep, East Champ D'Or, Luipaardsvlei and West Rand Consolidated (including West Wits). The joint venture
company’s goal is to reevaluate and restart mining on the West Rand goldfield, which forms part of the Witwatersrand Basin in South
Africa's Gauteng province. Initially, we and Mintails SA will hold 45% each in the joint venture company and MMRS the remaining
10%.

Ergo Min ing Joint Venture

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

DRDGOLD SA. Following discussions initiated in the first quarter of 2007, the Ergo Mining Joint Venture parties agreed to pursue a
strategy to consolidate certain of their assets on the East Rand. Mintails SA would contribute one fully refurbished carbon-in-leach, or
CIL, circuit at the Brakpan plant and DRDGOLD SA would contribute the Elsburg tailings complex, comprising approximately
180 Mt of tailings. Mintails SA and DRDGOLD SA would each own 50% of the Ergo Mining Joint Venture.

The Ergo Mining Joint Venture acquired from Anglo Gold Ashanti significant gold-bearing tailings materials created from

historical gold production and remaining infrastructure surrounding Ergo, a surface reclamation operation on South Africa's East
Rand goldfields which was discontinued by Anglo Gold Ashanti in 2004. It is envisaged that the Ergo Mining Joint Venture, together
with the additional tailings resources and infrastructure acquired from Anglo Gold Ashanti, will create significant potential for the
processing of surface gold tailings on the East Rand goldfields. Over its 25-year history, Ergo processed more than 890 Mt of tailings
material on the East Rand and produced approximately 8.2 million ounces of gold and 5.5 million pounds of uranium through two
plants, Brakpan and East Daggafontein. These two plants were purchased by Mintails SA in 2006.

The Ergo Mining Joint Venture entered into a sale of assets agreement with Anglo Gold Ashanti pursuant to which it

acquired the remaining moveable and immovable assets of Ergo for a consideration of R42.8 million ($6.1 million). These assets will
be operated by the Ergo Mining Joint Venture for its own account, under the Anglo Gold Ashanti authorizations, until new order
mining rights have been obtained. These assets, comprising servitudes (access agreements), infrastructure, piping, equipment, old
order mining rights and the right to an additional 15 Mt of tailings material, provide a platform to consolidate these tailings assets
with the Elsburg tailings.

The Ergo Mining Joint Venture would be managed by Crown, which has treated more than 200 Mt of sand and slime and

produced approximately 2.8 million ounces of gold through its plants. The initial phase of the project envisaged the refurbishment of
one CIL circuit at the Brakpan plant which would have the capacity to treat an estimated 1.25 Mt of tailings per month. The process
would involve the treatment of tailings from the Elsburg tailings complex through the Brakpan plant with residue being deposited on
the East Daggafontein deposition site.

On November 26, 2007, we announced that DRDGOLD SA signed a binding term sheet with Mintails SA its partner in the

previously announced Ergo Mining Joint Venture, which provides for significant expansion of the joint venture through:

• the planned refurbishment over the next 36 months of all infrastructure at the Brakpan plant, to increase capacity from one

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

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

and slimes dams in the region.

The expanded Ergo Mining Joint Venture will pursue feasibility studies to refurbish and re-open the full Brakpan plant,

which historically produced gold, uranium and sulphuric acid. Through this expansion, the Ergo Mining Joint Venture partners have
endorsed the strategy of pursuing a consolidation of all their available and unexploited surface gold and uranium assets on the East
Rand.

Phase I of the Ergo Mining Joint Venture involves the refurbishment of one CIL circuit at the Brakpan plant with the

capacity to treat an estimated 15 Mt of tailings a year, for the recovery of some 75,000 ounces of gold a year. Phase II, now under
investigation, envisages the expansion of the gold plant by refurbishing the second CIL circuit and developing uranium and acid
plants.

Agreements have been concluded for:

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

Anglo Gold Ashanti for a payment of R45.0 million ($6.4 million) and assumption of rehabilitation obligations; and

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

105 Mt, from Pamodzi Gold Limited. These properties will form part of the Mintails SA contribution to the expanded Ergo
Mining Joint Venture.

The acquisition of the Withok deposition site will provide the expanded Ergo Mining Joint Venture with extensive

additional deposition capacity commensurate with the substantial increases in tailings material and processing capacity.

The arrangements between the Ergo Mining Joint Venture partners have been structured to provide for the contribution of

assets and funding to the operation on a 50:50 basis. The Ergo Mining Joint Venture acquisitions are subject to regulatory review,
completion of definitive agreements, corporate and other approvals.

DRDGOLD SA

On July 6, 2005, we signed a Memorandum of Understanding with Khumo Bathong Holdings (Pty) Limited, or KBH,

regarding the acquisition by Khumo Gold of a 15% stake in our South African Operations. The purpose of the transaction was to
bring us into full compliance with the 10-year, 26% black economic empowerment equity requirement as stipulated in the Mining
Charter of South Africa.

On July 20, 2005, we acquired from the IDC, all the debt which it held against Crown and ERPM for a consideration which

was settled through the issue of 4,451,219 of our ordinary shares, which at the date of issue, represented approximately $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 Industrial Development Corporation
of South Africa, or IDC, which agreed to a debt restructuring in Crown. The new structure resulted in Khumo Gold acquiring,
initially, a 15% interest in a newly created vehicle, DRDGOLD SA, which holds a 100% interest in ERPM, Crown and Blyvoor. We
initially retained an 85% interest.

On November 18, 2005, we subscribed for $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 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). Khumo Gold was 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 included a 6% stake to be placed in a new employee trust.

On December 11, 2006, Khumo Gold exercised the option and acquired from us a further 50,000 ordinary shares in

DRDGOLD SA for a total cash consideration of $0.6 million (R4.3 million). After exercising the option, Khumo Gold's
shareholding in DRDGOLD SA increased to 20%. In addition, Khumo Gold, as promoter for an employee trust, exercised the
option for an employee trust to acquire from us 60,000 ordinary shares in DRDGOLD SA for a consideration of $0.7 million
(R5.1 million). After exercising the option, the trust's shareholding in DRDGOLD SA is 6%. Furthermore, Khumo Gold and the
employee trust subscribed for $1.6 million (R11.2 million) new preference shares in ERPM, subscribed for $0.2 million (R1.7
million) new preference shares in Crown and subscribed for $0.4 million (R2.7 million) new preference shares in Blyvoor. We
financed the transaction through the subscription of a further $1.6 million (R11.4 million) preference shares in Khumo Gold and by
extending a loan to the employee trust of $1.9 million (R13 .6 million).

Emperor

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 our former Chief Executive Officer,

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 Emperor to positive cash flow and creating a sustainable, long-term future for Emperor 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, for the restructuring of Emperor’s debt servicing obligations. 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 agreed to provide
Emperor with management and technical services.

On November 16, 2005, we concluded a sale and purchase agreement with Emperor pursuant to which, on April 6, 2006,

Emperor acquired our wholly owned subsidiary, DRD (Isle of Man) Limited, or DRD (Isle of Man), which in turn held our PNG
assets, comprising the 20% interest in the Porgera Joint Venture, the 100% interest in Tolukuma Gold Mines Limited and all of our
exploration tenements in PNG. The purchase consideration of $237.3 million was subject to certain completion adjustments to reflect
the change in the capital position of both Emperor and DRD Isle of Man between October 1, 2005, which was the effective date, and
April 6, 2006, the date that the transaction was completed. The purchase consideration included 751,879,699 new Emperor shares
issued to DRD (Offshore) Limited, or DRD (Offshore), and a cash consideration of $37.3 million payable to DRD (Offshore). An
amount of $5.0 million was outstanding on the cash consideration and was repayable in two installments to DRD (Offshore) on
March 30, 2007 and June 30 , 2007. This outstanding amount attracted interest at the London Inter-bank Offered Rate, or LIBOR,
plus 2% per annum and was entered into on market related terms. Subsequent to June 30, 2006, the board of DRD (Offshore)
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 attracted interest at LIBOR plus 3% per annum and is repayable on
December 31, 2007. This facility was repaid on August 17, 2007, on the completion of the sale of our 20% interest in the Porgera
Joint Venture to Barrick.

In April 2006 Vatukoula implemented the new Accelerate Development and Training Program, or ACDTP, which

involved a temporary shutdown of the mine on April 20, 2006 and a gradual start-up early in June 2006. The ACDTP was
designed to introduce flexibility to production areas, improve infrastructure and increase the productivity of the workforce. The
plan included development of higher grade areas at Philip Shaft and upgrading of associated shaft infrastructure. In addition, the
entire workforce was to undergo comprehensive assessment, reskilling and retraining.

On October 14, 2006, a serious incident involving a mine shaft conveyance occurred in the Philip Shaft at the Vatukoula

mine when, during testing of the shaft conveyance following maintenance, a skip-cage fell down the shaft, causing damage to the
surface winder mechanism. The Philip shaft was closed following the incident, while investigations and repairs were undertaken.
Production at Philip Shaft recommenced on November 14, 2006.

On December 5, 2006, after an extensive three-month review of Vatukoula, we determined that continued mining

operations at Vatukoula were no longer economically viable and that the mine would therefore cease production. Pending
completion of a strategic review to optimize the value of Vatukoula and other Fijian land holdings, the mine was placed on a care
and maintenance program. On March 28, 2007, Emperor sold all its Fijian assets, including the Vatukoula Mine to Westech Gold
(Pty) Limited, a private company incorporated in Australia, for A$1.00. Under the agreement, Emperor sold 100% of its shares in
its Australasian subsidiaries (Emperor Finance Limited and Emperor Australia Limited) which in turn owned the Fijian assets.

On July 27, 2007, DRDGOLD shareholders at a general meeting approved the disposal by Emperor of its 20% interest in

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

On October 22, 2007, we sold our entire interest in Emperor for A$55.9 million ($52.4 million) to 26 institutional

investors with each acquired between 0.4% and 21.6% of the shares.

The composition of Emperor’s Board of Directors at June 30, 2007, included 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,

Mr. J.W.C. Sayers and Mr. G.C. Campbell resigned from Emperor’s Board on the completion of the sale of our interest in
Emperor. Mr. G.C. Campbell rejoined the Emperor Board as an Independent Non-Executive Director subsequent to the sale of our
interest. Mr. I. MacMaster was appointed as Chairman on November 1, 2007.

Porgera Joint Venture

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
OMP 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, which had fifteen mineral tenements which formed 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, 2007, the Porgera Joint Venture
was owned by Barrick (75%), DRD (Porgera) Limited (20%) and Mineral Resources Enga Limited, or MRE, on behalf of the Enga
Provincial Governments and landowners in Papua New Guinea (5%). Barrick acquired Placer Dome Inc. together with its affiliate,
Placer (PNG) Limited and took over as operator of the Porgera Joint Venture in December 2005. Porgera was 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 was governed by an operating agreement that prevented the partners from acting unilaterally.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick.

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
first offered to be sold to them on similar terms. We subsequently repudiated our agreement with M5 and notified Rand Leases
Properties Limited that we did not intend offering the property to them. Both parties indicated to us their intentions to institute
legal proceedings for the sale and transfer of the property. On December 12, 2006, Rand Leases Properties Limited issued a
summons against us and we filed an Appearance to Defend. A trial date has been allocated by the High Court of South Africa for
April 25, 2008.

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

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

4B. BUSINESS OVERVIEW

Description of Our Mining Business

Exploration

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

existing sites and at undeveloped sites. Once a potential ore body has been discovered, exploration is extended and intensified in
order to enable clearer definition of the ore body and the portions with the potential to be mined. Geological techniques are constantly
refined to improve the economic viability of exploration and exploitation.

Mining

Our 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 comprised 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 and the gold market performed strongly in

fiscal 2007. Whilst the gold price did not again breach $700 per ounce after June 2006, the average spot price was 21% higher than in
the previous fiscal year, at $638 per ounce. Amid continuing global economic uncertainty, investors turned once more to gold
(notably to safe-haven products such as Exchange Traded Funds) and this, together with more de-hedging activity and a slowdown in
new mine supply, particularly from South Africa, saw demand exceed supply. The average gold price received by us for the year was
19% higher than the previous year at $642 per ounce.

Looking ahead, we believe that the global economic environment, including economic uncertainty and other factors, will

continue to make gold attractive to investors. The supply side shortfall is likely to continue because of circumstances including
operational challenges and delays in opening new mines and the challenge, particularly to South African producers such as ourselves,
of maintaining profitable production in the face of increasing mining depths and rising costs.

As at June 30, 2007, we had shareholdings in two stand-alone businesses: 74% in DRDGOLD SA and 78.72% in

Emperor. Our total revenue from continuing operations by geographic market was as follows:

Year ended June 30,

2007 2006

2005

$’000 $’000

$’000

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

208,348 148,785

68,370

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

28,926 29,085

32,446

237,274 177,870

100,816

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% (Fiscal 2006: 4.1%) of RRL (which is jointly owned by South
African mining companies). Mr. D.J. Pretorius, our Chief Executive Officer of DRDGOLD SA, is a director of RRL.

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

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

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

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

The gold produced by Vatukoula in Fiji was sold directly to AGR Matthey. Proceeds for gold sold were received within six

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

The contractual agreements with the refineries are very important 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, 2007,

and 2006, in both imperial and metric units. Our Ore Reserves are comprised of our attributable Ore Reserves of our subsidiaries.

Our attributable 16% share of the Ore Reserves of the Porgera Joint Venture as at June 30, 2006, was 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

. The Porgera Ore Reserves were 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.

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 include a degree of uncertainty and depend to some extent on statistical
inferences which may ultimately prove to have been unreliable.

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. 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.

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 2007, in respect of our South African assets, Ore Reserves were determined assuming a gold price of R154,437

per kilogram ($660 per ounce). In respect of our Australasian assets, Ore Reserves for Tolukuma were determined assuming a
gold price of K2,024 per ounce ($660 per ounce).

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

approximately R117,055 per kilogram. The assumed Dollar gold price was approximately $582 per ounce. In respect of our
Australasian assets, Ore Reserves for Tolukuma were determined assuming a gold price of $582 per ounce at an exchange rate of
K3.1615 = $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 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.

In fiscal 2007, our attributable Ore Reserves decreased by 28.6% from 8.8 million ounces at June 30, 2006, to 6.3 million

ounces at June 30, 2007, primarily as a consequence of the closure and subsequent disposal of the Vatukoula mine and our interest
in the Porgera Joint Venture.

Based on the revised Ore Reserves set forth below, the revised life of mine for each of our operations at June 30, 2007,

were as follows:

Underground

Surface

Mine

2007 2006 2007 2006

South

Africa

Blyvoor

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

20 years

5 years

6 years

Crown

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

N/A

7 years

8 years

ERPM

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

7 years

9 years

7 years

Australasia

Vatukoula

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

N/A

8 years N/A N/A

Tolukuma

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

2 years

N/A

Porgera

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

N/A

10 years N/A

11 years

Our Ore Reserves as of June 30, 2007 and 2006 are set forth in the table below.

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

As at June 30, 2007, we had a 78.72% interest in Emperor which in turn had a 100% interest in Tolukuma and a 20% interest in

the Porgera Joint Venture. On March 28, 2007, Emperor sold the Vatukoula mine, on August 17, 2007, Emperor sold its 20%
interest in the Porgera Joint Venture and on October 22, 2007, we sold our entire shareholding in Emperor.

Ore Reserves: Imperial

At June 30, 2007

At June 30, 2006

Proven Ore Reserves

Probable Ore Reserves

Proven Ore Reserves

Probable Ore Reserves

Tons

Grade

Gold

Content

Tons

Grade

Gold

Content

Tons

Grade

Gold

Content

Tons

Grade

Gold

Content

(mill)

(oz/ton)

('000 ozs)

(mill)

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

(mill)

(oz/ton) ('000 ozs)

South African Operations:

Blyvoor

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

18.58 0.17 3,179

11.08 0.15 1,699

20.08 0.19 3,716 7.61 0.16 1,210

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

14.19 0.02

243 -

19.22

0.02 329 -

Total

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

32.77 0.10 3,422

11.08 0.15 1,699

39.30 0.10 4,045 7.61 0.16 1,210

ERPM

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

0.96 0.24

229

1.07 0.21 221

1.25 0.24

305 1.92 0.22

417

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

11.77 0.02

219 -

15.07

0.02 281 -

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

12.73 0.04

448

1.07 0.21 221

16.32 0.04

586 1.92 0.22

417

Crown

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

12.27 0.01

180

13.70 0.02 232

17.99 0.02

274 9.48 0.02

150

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

12.27 0.01

180

13.70 0.02 232

17.99 0.02

274 9.48 0.02

150

Australasian Operations:

Porgera

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

0.54

0.21

111

1.06

0.25

267

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

- -

- - -

8.47

0.09

730

1.89

0.09

170

Total

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

- -

- - -

9.01

0.09

841

2.95

0.15

437

Tolukuma

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

- -

0.18

0.60

108

0.18

0.55

0.23

0.42

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

- -

- - -

- - - - -

Total

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

- -

0.18

0.60

108

0.18

0.55

0.23

0.42

Vatukoula

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

19.54 0.17 3,408

12.33 0.16 2,028

23.12 0.20 4,612 11.7 0.19 2,287

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

38.23 0.02

642

13.70 0.02 232

60.75 0.03 1,613 11.3 0.03

321

Total

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

57.77 0.07 4,050

26.03 0.09 2,260

83.87 0.07 6,225 23.0 0.11 2,608

Total Proven and Probable Ore reserves for fiscal 2007 reflect our attributable 74% interest in Blyvoor, ERPM and Crown.

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. On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture. On October 22, 2007, we sold our entire shareholding in Emperor.

Total Proven and Probable Ore reserves for fiscal 2007 reflect our attributable 79% interest in Tolukuma and Vatukoula. On March 28, 2007, Emperor sold the Vatukoula mine and on October 22, 2007, we sold our

entire shareholding in Emperor.

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

Ore Reserves: Metric

At June 30, 2007

At June 30, 2006

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

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

16.86

5.87

98.87

10.05

5.26

52.84

18.22

6.34

115.586

6.91

5.45

37.626

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

12.87

0.59

7.56

17.44

0.59

10.236

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

29.73

3.58

106.43

10.05

5.26

52.84

35.66

3.53

125.822

6.91

5.45

37.626

ERPM

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

0.87 8.20 7.13

0.97

7.11 6.89

1.14

8.35 9.480 1.74 7.45 12.962

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

10.68 0.64 6.82 -

13.67 0.64

8.720 -

TotalERPM.......................................................

11.55 1.21 13.95

0.97 7.11 6.89

14.81 1.23

18.200

1.74 7.45

12.962

Crown

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

11.14 0.50 5.60

12.43 0.58 7.22 16.33

0.52 8.510 8.60 0.54 4.683

TotalCrown ......................................................

11.14 0.50 5.60

12.43 0.58 7.22

16.33 0.52

8.510

8.60 0.54

4.683

Australasian Operations:

Porgera

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

- - -

0.48

7.11

3.460

0.96

8.61

8.294

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

7.68

2.95

22.700

1.72

3.07

5.275

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

8.16

3.20

26.160

2.68

5.06

13.569

Tolukuma

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

0.16

20.58

3.35

0.16

18.98

3.020

0.21

14.42

3.043

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

TotalTolukuma.................................................

0.16

20.58

3.35

0.16

18.98

3.020

0.21

14.42

3.043

Vatukoula

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

0.97 12.33

11.930 0.88 10.45 9.177

TotalVatukoula.................................................

- 0.97 12.33

11.930 0.88 10.45 9.177

Total Group

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

17.73

5.98 106.00

11.18 5.64 63.08 20.97

6.84

143.472 10.70 6.65 71.102

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

34.69 0.58 19.98

12.43 0.58 7.22 55.12

0.91 50.164 10.32 0.97 9.958

Total

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

52.42 2.40 125.98

23.61 2.98 70.30

76.09 2.54

193.646

21.02 3.86

81.060

Total Proven and Probable Ore reserves for fiscal 2007 reflect our attributable 74% interest in Blyvoor, ERPM and Crown.

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. On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture. On October 22, 2007, we sold our entire shareholding in Emperor.

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

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

If we look at gold prices different from the gold price of R154,437 per kilogram ($660 per ounce) used to estimate our attributable
Ore Reserves of 6.3 million ounces of gold as of June 30, 2007 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, 2007 but
with different gold prices that are 10% above and below the gold price of R154,437 per kilogram ($660 per ounce) used to estimate
our attributable gold reserves per our above schedules, our attributable gold reserves would be as follows:

Rand gold price per kilogram

R115,314

R138,994 R154,437 R169,881

Dollar gold price per ounce

$553

$594 $660 $726

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

4.9

5.9

6.3

6.8

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

Underground Surface

Mine

Dilution

(Sundries,

Shortfall and

Development)

(%)

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

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

22.0 83.8 95.8 100.0 48.0

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

Not applicable

100.0

64.0

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

21.0 87.0 94.0 100.0 66.0

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

29.5

79.7 92.0 95.0

91.0

The 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

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 following table shows the average drill/sample spacing (rounded to the nearest foot), as at June 30, 2007, 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.

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

16 ft. by 19 ft.

Nil

Australasia

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

3 ft. by 39 ft.

33 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.

We calculated the three-year historical average gold price to be approximately R115,314 per kilogram ($553 per ounce).

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 fiscal 2008.

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.

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 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 si gnificant 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 published. The bill provides
for a royalty of 1.5% of gross revenue per year, payable quarterly. The royalty is tax deductible and the cost after tax amounts to a
rate of between 0.825% and 0.975% at the prevailing marginal tax rates applicable to the group. If the bill is passed in its current form
by Parliament, the payment of royalties will commence on May 1, 2009. 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.

The Broad Based Socio-Economic Empowerment Charter

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

developed by the Minister within six months of commencement of the MPRD Act, beginning May 1, 2004. The Mining Charter
came into effect in August 2004. In its current format its objectives include:

• increased direct and indirect ownership of mining entities;

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

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

welfare of mining communities; and

• promotion of beneficiation.

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

Africans of South African mining assets. It recommends that these are achieved by, among other methods, disposal of assets by
mining companies to historically disadvantaged persons on a willing seller, willing buyer basis at fair market value. The goals set by
the Mining Charter require each mining company to achieve 15 percent ownership by historically disadvantaged South Africans of its
South African mining assets within five years and 26 percent ownership within ten years from May 1, 2004. It also sets out guidelines
and goals in respect of employment equity at management level with a view to achieving 40 percent participation by historically
disadvantaged persons in management and ten percent participation by women in the mining industry, each within five years from
May 1, 2004. Compliance with these objectives is measured on the weighted average “scorecard” approach in accordance with a
scorecard which was first published by the government in February 2003.

We are unable to identify any permits, rights or investments which we may lose as a result of any non-compliance. The

provisions of the Mining Charter apply to each mining company individually. As transactions, to comply with the Mining Charter,
are to be at fair market value, we do not anticipate incurring any loss in fulfilling our obligations provided that we are able to identify
suitable partners that are able to obtain adequate funding.

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

empowerment structure with Khumo Gold. The new structure resulted in Khumo Gold acquiring, as a first step, a 15% interest in a
newly created vehicle, DRDGOLD SA, which holds 100% of ERPM, Crown and Blyvoor. Khumo Gold acquired an additional 5%
interest in DRDGOLD SA with the employee trust acquiring 6% in fiscal 2007. (See Item 4A.: “History and Development of the
Company”).

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.

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 2007, we contributed approximately $0.6 million under the COID Act to a multi-employer industry fund
administered by Rand M utual 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.

The impact on the environment by mining operations is extensively regulated by in the MPRD Act. The MPRD Act has

onerous provisions for personal liability of directors of companies whose mining operations have an unacceptable impact on the
environment.

Under the MPRD Act, new order mining rights are not issued unless a complete environmental impact assessment is

conducted and all potentially affected parties have been given an opportunity to comment on the proposed mining. Mining companies
are also required to demonstrate both the technical and financial ability to sustain an ongoing environmental management program,
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.

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-of f 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.

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 March 2005, the Fijian government enacted the Environment Management Bill, or the Bill, first introduced on July
28, 2004. The Bill introduced a number of environmental protection measures, many of which impacted 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, 2007, we held a total of $10.7 million (2006: $8.3 million) in trust, the balance held in each fund
being $2.0 million (2006: $1.8 million) for West Wits, $3.4 million (2006: $2.8 million) for Blyvoor, $2.3 million (2006:
$2.1 million) for Durban Deep, $1.7 million (2006: $0.9 million) for Crown and $1.3 million (2006: $0.7 million) for ERPM. Tru stee
meetings are held as required, and quarterly reports on the financial status of the funds, are submitted to our board of directors.

The financial provisions for West Wits and Durban Deep have been consolidated into a single fund. We address shortfalls in

the funds by accruing trust investment income for the benefit of the funds and by replenishing it with the proceeds from the sale of
redundant mining equipment at the end of the life of the mine. If any of the operations are prematurely closed, the rehabilitation funds
may be insufficient to meet all the rehabilitation obligations of those operations.

Whereas the old Minerals Act allowed for the establishment of a fully funded rehabilitation fund over the life of mine, the

MPRD Act assumes a fully compliant fund at any given time in the production life of a mine. The DME appears to have taken a
practical approach in dealing with this change, and has indicated that the traditional ring fencing of funds may, for investment
purposes be relaxed, and that insurance instruments may also be received subject to the DME’s consent, to make up the shortfall in
available cash funds.

The aggregate group rehabilitation, reclamation and closure cost provision was $43.4 million at June 30, 2007, compared to

$46.8 million at June 30, 2006.

4C. ORGANIZATIONAL STRUCTURE

The following chart shows our principal subsidiaries and joint venture as of June 30, 2007. 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%

74%

100%

Australasian Operations

79%

100%

20%

100%

All shafts at Durban Deep have been closed.

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

Sold to Westech on March 28, 2007.

Sold to Barrick on August 17, 2007.

Sold entire shareholding on October 22, 2007.

DRDGOLD South African

Operations (Pty) Limited

DRDGOLD Limited

West Witswatersrand Gold

Holdings Limited

Durban Deep

Crown Gold Recoveried (Pty)

Limited

East Rand Proprietary Mines

Limited

Blyvooruitzicht Gold Mining

Company Limited

West Witwatersrand Gold Mines

Limited

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)

4D. PROPERTY, PLANTS 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

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 74% of the Blyvooruitzicht Gold Mining Company Limited, (through our 74% holding in DRDGOLD SA), which

in turn owns 100% of the Doornfontein Gold Mining Company Limited. The consolidated mining operation, referred to as Blyvoor,
consists of the adjacent mines of Blyvooruitzicht and Doornfontein which are located within the Far West Rand Goldfields on the
northwestern edge of the Witwatersrand Basin. Blyvoor was the first mine in the “West Wits” line. Together, these two operations
have produced over 37 million ounces of gold since inception.

At June 30, 2007, Blyvoor had 4,623 employees, including contractors.

Property

Blyvoor is located on the West Wits line within the Far West Rand Goldfields on the northwestern rim of the Witwatersrand

Basin, near the town of Carletonville, Gauteng Province, about 50.0 miles (80.5 kilometers) south-west of Johannesburg and is
reached via the R528 road to Carletonville on the N12 Johannesburg-Potchefstroom-Kimberly highway.

The climate of the Highveld area (at an elevation of 5,249 feet (1,600 meters) above mean sea level), where the mine is

situated, is humid continental with warm summers and cold winters. Temperatures range from a minimum of 23 degrees
Fahrenheit
(-5 degrees Celsius) in June and July to a maximum of 93 degrees Fahrenheit (34 degrees Celsius) in December and January.

The operating facilities are all situated on property belonging to Blyvoor, and include the shaft complexes, administrative

offices for the managerial, administrative, financial and technical disciplines, extensive workshops and consumable stores, the
metallurgical plants, tailings dams and waste rock dumps. Blyvoor also houses the majority of its employees in Blyvoor-owned
houses on the property and in the town of Carletonville. The normal support structures, including training, security, sport and
recreational facilities, schools and churches are situated on the property. Blyvoor has mining title to 16,242 acres (6,573 hectares) and
owns 5,138 acres (2,079 hectares) of freehold property.

Blyvoor consists of one mining license, ML46/99, in respect of statutory mining rights and mineral rights held by Blyvoor.

We are in the process of converting these old order property rights to new order rights under the MPRD Act. The net book value of
the mining assets at Blyvoor is $55.4 million at June 30, 2007, with 5.1 million ounces of Ore Reserves.

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 owns ERPM, Crown and
Blyvoor. We owned an 85% interest in DRDGOLD SA.

2006

2007

After completion of a drilling program to define the uranium resource in Blyvoor’s slimes dam material, a 17.5 million
pound uranium and 0.8 million ton sulphur resource was declared in November 2007.

Geology and Mineralization

Blyvoor exploits the two gold-bearing pebble horizons in the Central Rand Goldfields, the Carbon Leader, which is one

of the principal ore bodies in the goldfield, and the Middelvlei Reef horizons which occur in discrete channels over parts of the
lease area approximately 246 feet (75 meters) vertically above the Carbon Leader Reef horizon. The Carbon Leader Reef is the
principal economic horizon across the lease area and is a planar single sheet conglomerate. The Carbon Leader Reef typically
comprises basal carbon seam, overlain by a thin, small pebble conglomerate, enriched in carbon in the lower portion. The grade of
the Carbon Leader Reef is more variable than the Middelvlei Reef. The Middelvlei Reef consists of a variable number of
polymictic quartz conglomerate bands, interbedded with coarse grain quartzite. The grade of the Middelvlei Reef is more erratic,
with distinctive pay shoots forming as southward-orientated linear zones.

Blyvoor was established in 1937 to exploit the rich Carbon Leader Reef but by the late 1980s had reached a position where

continued existence of mining operations was dependent upon the mining of scattered Carbon Leader Reef remnants and limited
sections of the lower grade Middelvlei Reef.

Mining and Processing

Access from the surface to the current underground workings of the mines is through a system of vertical and incline shafts

situated at the Blyvoor and Doornfontein mines. Doornfontein was previously a separate mine adjacent to the Blyvoor mine but has
since been merged to form Blyvoor. The shaft system consists of four vertical shafts from the surface, thirteen sub-incline shafts and
two sub-vertical shafts underground. Of these thirteen sub-incline shafts, only nine are in operation and are used for the conveyance
of personnel, pumping and hoisting of mined ore and waste.

Two levels have been holed between the previous Doornfontein mine and workings within the Blyvoor lease extension

(purchased in 1996 from Western Deep Levels Limited) to allow ore from the bottom of the Blyvoor workings to be trammed across
and hoisted up via the Blyvoor No. 5 Shaft, from where it is trucked to the gold plant. The average mining depth at Blyvoor is 10,541
feet (3,213 meters), 5,292 feet (1,613 meters) below mean sea level.

Mining of the reef takes place in stope panels. Holes are drilled into the solid rock and are charged with explosives and

blasted. The loosened rock is removed from the stope panels and is conveyed to the shaft, tipped into the ore-pass systems, hoisted to
the surface and transported to the metallurgical plant for gold extraction.

Metallurgical processing facilities at Blyvoor are comprised of a single metallurgical plant. The process route is based on a

conventional flow sheet comprising multi-stage crushing, open circuit primary and closed circuit secondary milling with hydro
cyclones, thickening and cyanide leaching in a Carbon-in-Pulp, or CIP, carousel arrangement. The gold is recovered through
electrowinning followed by smelting to doré. The circuit was recently modified by the closure of the filtration system and the
commissioning of a modern carbon Kemix pumpcell plant.

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. In August 2005, our board of directors approved a
project to re-establish mining operations from the No. 2 Sub-Shaft in three phases at a total capital cost of $12.5 million (R80.5
million). In total, the No. 2 Sub-Shaft Project was expected to yield some 770,491 ounces of gold from 2.4 million tons of ore with an
average delivered grade of 8.18 g/t, over a 20 year period. This project has been re-designed in two phases now called the Way-
Ahead Project, or WAP Project.

In fiscal 2007, good progress was made on Blyvoor’s WAP Project, which replaced the No. 2 Sub-Shaft Project. The WAP

Project involves accessing the No. 2 sub-shaft reserves from levels 27 to 35 of No. 5 shaft at a substantially reduced cost of
$5.2 million (R37.0 million) over the next three years.

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 capital expansion projects were conducted over the period fiscal 2005 to fiscal 2007, including processing and

extension of Slimes Dams No. 4, 5 and 6 ($0.3 million), the WAP project ($1.5 million) and a residue pipeline project ($0.3 million).
In fiscal 2007, approximately $9.5 million was spent mainly on opening-up and development at Blyvoor.

Exploration and Development

At the beginning of fiscal 2003, Blyvoor began a feasibility study looking at the opportunity to re-mine and treat the slimes

dam material from the No. 4 and 5 Slimes Dam Project. The project was commissioned during November 2003 and completed at a
cost of $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.

In November 2007 encouraging results had been obtained from a drilling program to define the uranium resource in

Blyvoor’s slimes dam material and a 17.5 million pound uranium and 0.8 million ton sulphur resource was declared. For fiscal 2008,
an exploration drilling program linked to opening up and development has been scheduled to evaluate the south-west down-dip
extension of the Blyvoor ore body south of the Boulder Dyke. If encouraging results are obtained, various mining options will be
investigated to exploit the ore body, including the possibility of a trackless decline.

Environmental and Closure Aspects

The predominantly dolomitic geology of the area in and around Blyvoor, and the resultant occasional occurrence of

sinkholes and subsidences, exposes Blyvoor to relatively unique environmental risks and costs associated with the remediation and
filling of these sinkholes.

Blyvoor has to maintain a rate of pumping of fissure water sufficient to keep the rate of rise of underground water below the

level of underground workings. The required rate is in the order of 2 million gallons (8 million liters) per day. Water not used in the
operations is discharged into the Wonderfonteinspruit. 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. Two continuous water quality monitors have been installed to send water quality data to a website.
Regular monthly meetings continue to take place with the Potchefstroom Municipality, with Blyvoor being fully compliant with the
requirements of the agreement with the Potchefstroom City Council. 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 has updated its EMP to meet the new requirements of the MPRD Act. The EMP has been submitted to the DME for

approval. Blyvoor is currently demolishing and rehabilitating redundant surface infrastructures, including the defunct uranium plant.

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

cost for Blyvoor, in current monetary terms as at June 30, 2007, is $6.1 million. This has been included in the provision for
environmental rehabilitation, restoration and closure costs on our balance sheet. A total of $3.4 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.

Life of Mine

Based upon a gold price of approximately R154,437 per kilogram ($660 per ounce), at June 30, 2007, the Proven and

Probable Ore Reserves of Blyvoor were 5.1 million ounces. In fiscal 2006, 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. A Mineral
Resource competent person is appointed at each operation to review our Ore Reserve calculations for accuracy. For Blyvoor,
Mr. David Edwin James Whittaker (SACNASP) is the appointed Mineral Resource competent person.

As a result of the implementation of the WAP Project and the higher gold price, Blyvoor’s life-of-mine remains at 20 years,

as at June 30, 2007.

Current Production

Blyvoor produced a total of 151,269 ounces of gold in fiscal 2007, with 110,471 ounces from underground areas and

40,798 ounces from surface areas. This represents 34% of our production from continuing operations of 450,247 ounces based on our
subsidiaries.

Underground gold production has decreased from 120,178 ounces in fiscal 2006 to 110,471 ounces in fiscal 2007. Reduced

underground production reflects the implementation during fiscal 2007 of a new, “lower grade, higher volume” mine plan to address
safety concerns arising from increased levels of seismicity in the high-grade No. 5 Shaft area. Surface gold production increased from
39,515 ounces in fiscal 2006 to 40,798 ounces in fiscal 2007.

Cash costs of $551 per ounce in fiscal 2007 increased from $482 per ounce in fiscal 2006. Total costs for fiscal 2007 of

$595 per ounce also show an increase compared to $520 per ounce in fiscal 2006. The increase in both cash costs and total costs per
ounce of gold produced was primarily attributable to the lower production at Blyvoor in fiscal 2007.

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

Year ended June 30,

2007 2006

2005

Production

Surface Operations

Ore mined ('000 tons)................................................................................................................................. 4,072 4,005

3,233

Recovered grade (oz/ton) ........................................................................................................................... 0.010 0.010

0.007

Gold produced (ounces) ............................................................................................................................. 40,798 39,515

23,920

Underground Operations

Ore mined ('000 tons)................................................................................................................................. 761 742

649

Recovered grade (oz/ton) ........................................................................................................................... 0.145 0.162

0.213

Gold produced (ounces) ............................................................................................................................. 110,471 120,178 137,958
Total ounces produced ............................................................................................................................... 151,269 159,693 161,878
Results of Operations ($)

Revenues ('000) .......................................................................................................................................... 96,007 83,635

68,370

Production cost ('000)................................................................................................................................. 83,298 76,936

73,814

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

.............................................................................................................. 551 482

456

Total cost per ounce of gold ($)

.............................................................................................................. 595 520

498

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.”

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 initially acquiring a 15% interest in a newly created vehicle, DRDGOLD SA,
which includes 100% of ERPM, Crown and Blyvoor. We currently own 74% of Crown, which we consolidated as a subsidiary
from December 1, 2005, through our 74% holding in DRDGO LD SA. 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 178,000 tpm. Crown undertakes
the retreatment of surface sources deposited as tailing from non-operating mining sites across central Johannesburg.

At June 30, 2007, Crown had 1,165 employees, including contractors.

Property

Crown is situated on the outskirts of Johannesburg, South Africa and consists of three separate locations. It has mining

rights to 5,787 acres (2,342 hectares) and has the right to occupy 1,490 acres (603 hectares) of freehold property. Crown is in the
process of converting these old order rights to new order rights under the MPRD Act.

The Crown Central operation is located on the West Wits line within the Central Goldfields of the Witwatersrand Basin,

approximately 6 miles (10 kilometers) west of the Johannesburg central business district in the province of Gauteng. Access is via
Xavier Road on the M1 Johannesburg-Kimberley-Bloemfontein highway. The City Deep operation is located on the West Wits line
within the Central Goldfields of the Witwatersrand Basin, approximately 3 miles (5 kilometers) south-east of the Johannesburg
central business district in the province of Gauteng. Access is via the Heidelberg Road on the M2 Johannesburg-Germiston
motorway. The Knights operation is located at Stanley and Knights Road Germiston off the R29 Main Reef Road.

As of June 30, 2007, the net book value of Crown’s mining assets was $24.7 million.

History

1979

Rand Mines Limited directors approved the formation of the company Rand Mines Milling and Mining Limited (RM3)
to treat the surface gold tailings created from the underground section of the original Crown Mines, which had been in
operation since the start of gold mining on the Witwatersrand in the late 1800's.

1982

First plant commissioned at Crown Mines to process surface material.

1986

Second plant commissioned at City Deep to process surface material.

1997

Randgold Exploration Limited and Continental Goldfields of Australia entered into a joint venture with the intention to
establish a company that would acquire dump retreatment operations on the Witwatersrand. This resulted in the
formation of CCGR, which was incorporated as a public company in South Africa in May 1997. Crown was a wholly
owned subsidiary of CCGR and consists of the surface retreatment operations of Crown Central, City Deep and
Knights.

1998

We purchased 100% of CCGR.

2002

KBH purchased 60% of Crown. We were appointed as joint manager of the operation with KBH.

2005

On July 6, 2005 we signed a Memorandum of Understanding with KBH regarding the acquisition by Khumo Gold of a
15% stake in our South African Operations.
On October 27, 2005, our board of directors approved the transaction with Khumo Gold. The new structure resulted in
Khumo Gold acquiring a 15% interest in a newly created vehicle, DRDGOLD SA, which includes 100% of ERPM,
Crown and Blyvoor. We owned an 85% interest in DRDGOLD SA.

2006

On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us
pursuant to the option agreement concluded between us and Khumo Gold in October 2005 to acquire a further 11% in
DRDGOLD SA.
On August 28, 2006, we concluded an agreement with Anglo Gold Ashanti to purchase the Top Star Dump.

Mining and Processing

Crown undertakes the re-treatment of surface sources deposited as tailings from non-operational mining sites across

central Johannesburg.

Material processed by Crown is sourced from numerous secondary surface sources namely, sand and slime. The surface

sources have generally undergone a complex depositional history resulting in grade variations associated with improvements in
plant recovery over the period of time the material was deposited. Archive material is a secondary source of gold bearing material.
This material is generally made up of old gold metallurgical plant sites as well as “river bed” material.

The three metallurgical plants, known as Crown Mines, City Deep and Knights, have an installed capacity to treat

approximately 11.0 million tons of material per year. Up to fiscal 2003, Crown also operated the West Wits gold plant for the
processing of sand and slime. Crown also operates the ERPM surface operations with ore being treated at the Knights plant. All of
the plants have undergone various modifications during recent years resulting in significant changes to the processing circuits.

Electricity to Crown is supplied to the Crown Central and City Deep business units from separate substations referred to

as Jupiter and No. 15 Shaft Crown Mines, and for the Knights by the Ekhurhuleni Town Council. Electricity is supplied directly
from the national power grid to the substation and town council at 44,000 volts. Substations, located on mine sites, transform the
power to 6,600 volts for direct supply to the plants. The power supply is further reduced to 525 volts for smaller devices and
equipment.

For Crown Central and City Deep, the average annual power consumption is about 72 GWHr and the maximum demand

is about 3.7 MW. For Knights the average annual power consumption is about 36 GWHr and the maximum demand is about 1.8
MW.

Crown operates three plants with slight variations in design in each plant, with a processing capacity of approximately

1 million tpm, yielding approximately 0.01 oz/t (0.4 g/t). The feed stock is made up of sand and slime which are reclaimed
separately. Sand is reclaimed using mechanical front-end loaders, re-pulped with water and pumped to the plant. Slime is
reclaimed using high pressure water monitoring guns. The re-pulped slime is pumped to the plant and the reclaimed material is
treated using screens, cyclones, ball mills and CIL technology to extract the gold. As at June 30, 2007, the overall plant utilization
was 95%.

City Deep Plant: Commissioned in 1987, this surface/underground plant is comprised of a circuit including screening,

primary, secondary and tertiary cycloning in closed circuit milling, thickening, oxygen preconditioning, CIL, elution and zinc
precipitation followed by calcining and smelting to doré. In 1998, the plant was converted to a slimes only operation. However, due
to operational difficulties caused by the particulate nature of the slimes, the milling circuit has subsequently been recommissioned to
facilitate the treatment of sand.

Crown Mines Plant: Commissioned in 1982, this surface/underground plant has already been modified and is comprised

of a circuit including screening, primary cycloning, open circuit milling, thickening, oxygen preconditioning, CIP and CIL, elution,
zinc precipitation followed by calcining and smelting to doré.

KnightsPlant: Commissioned in 1988, this surface/underground plant is comprised of a circuit including screening,

primary cycloning, spiral pre-concentration, milling in closed circuit with hydrocyclones, thickening, oxygen preconditioning, CIL,
elution, electrowinning and smelting to doré.

Exploration and Development

Exploration and development activity at Crown involves the drilling of existing surface dumps and evaluating the potential

gold bearing surface material owned by third parties that could be processed on a full treatment basis or purchased outright by Crown.

On August 28, 2006, we concluded an agreement with Anglo Gold Ashanti to purchase the Top Star Dump. The Top Star

Dump has been evaluated geostatistically and has a probable reserve of 5.1Mt, at a grade of 0.755g/t.

Exploration drilling is currently under way to define the uranium potential of all Crown’s current deposition sites.

Environmental and Closure Aspects

Crown operates at sites located in close proximity to significant municipal infrastructure, commercial and residential

development. The major environmental risks are associated with dust from various recovery sites, and effective management of
relocated process material on certain tailings dams. The impact of windblown dust on the surrounding environment and community is
addressed through a scientific monitoring and evaluation process, with active input from the University of Witwatersrand and
appropriate community involvement. Environmental management programs, addressing a wide range of environmental issues, have
been prepared by specialist environmental consultants and applied specifically to each dust sample recovery monitoring site and
integrated into Crown’s internal environmental assessment process. Although Crown completed a project for thickening re-processed
tailings, there also remains a risk of localized sloughing which can result in that section of the tailings dam being closed temporarily,
with repai r work being done to the dam wall. Water pollution is controlled by means of a comprehensive system of return water dams
which allow for used water to be recycled for use in Crown’s metallurgical plant. Overflows of return water dams may, depending on
their location, pollute surrounding streams and wetlands. Crown has an ongoing monitoring program to ensure that its water balances
(in its reticulation system, on its tailings and its return water dams) are maintained at levels that are sensitive to that capacity of return
water dams.

Dust pollution is controlled through an active environmental management program for the residue disposal sites and

chemical and organic dust suppression on recovery sites. Short-term dust control is accomplished through ridge ploughing the top
surface of dormant tailings dams. Additionally, environmentally friendly dust suppressants, such as molasses, are applied. Dust fall-
out is also monitored. In the long-term, dust suppression and water pollution is managed through a program of progressive vegetation
of the tailings followed by the application of lime, to reduce the natural acidic conditions, and fertilizer to assist in the growth of
vegetation planted on the tailings dam.

A program of environmental restoration that provides for the rehabilitation of areas affected by mining operations during the

life of the mine is in place. The surface reclamation process at Crown has several environmental merits as it has removed a potential
pollution source and opens up land for development. Crown has conducted its environmental management program performance
assessment, which was submitted to and approved by the DME during fiscal 2005. Crown has updated its EMP in compliance with
the MPRD Act and submitted it to the DME for approval.

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

Crown, in current monetary terms as at June 30, 2007, is approximately $20.1 million. A total of $1.7 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 R154,437 per kilogram ($660 per ounce), at June 30, 2007, our 74% share of the

Proven and Probable Ore Reserves of Crown was 0.4 million ounces. In fiscal 2006, based upon a gold price of approximately
R117,055 per kilogram, our 85% share of Proven and Probable Ore Reserves of Crown was 0.4 million ounces. Crown’s Ore
Reserves have not changed from the previous year. A Mineral Resource competent person is appointed at each operation to review
our Ore Reserve calculations for accuracy. For Crown Surface, Mr. William John Laing (PLATO) is the appointed Mineral Resource
competent person. The current life-of-mine is estimated to be seven years.

Current Production

Gold production for Crown was 103,011 ounces in fiscal 2007 compared to our attributable share of gold production of

75,959 ounces in fiscal 2006 and 45,424 ounces for fiscal 2005. The increase in gold production in fiscal 2007 reflected an
improvement in throughput tons made possible through improvements to pipelines and other infrastructure, but was also due to the
incorporation of Crown into DRDGOLD SA as a wholly owned subsidiary with effect from December 1, 2005.

In fiscal 2007, cash costs decreased to $451 per ounce of gold from $477 per ounce of gold in fiscal 2006, as a result of higher gold
production. Total cost per ounce of gold increased to $542 per ounce from $533 per ounce in fiscal 2006.

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

Year ended June 30,

2007 2006

2005

Production

Surface operations

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

9,265 6,795

3,915

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

0.011 0.012

0.012

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

103,011 75,959

45,424

Results of Operations ($)

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

64,351 31,310

Production cost (‘000) ...........................................................................................................

46,430 26,697

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

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

451 477

Total cost per ounce of gold ($)

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

542 533

Represents our 40% attributable share of production for fiscal 2005. From December 1, 2005, Crown was a consolidated

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

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.”

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 initially a 15% interest in a newly created vehicle, DRDGOLD SA, which includes 100% of
ERPM, Crown and Blyvoor. We own 74% of ERPM, which is consolidated as a subsidiary from December 1, 2005, through our
74% holding in DRDGOLD SA. For a full description of the transactions associated with our acquisition of ERPM, see Item 4A:
“History and Development of the Company.”

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, 2007, ERPM had 2,139 employees, including contractors.

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.

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, 2007, the net book value of ERPM’s mining assets was $11.8 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 the loss of Hercules Shaft in June 2003
and the loss of a secondary outlet at the FEV shaft in November 2003.

2004

In July 2004 it was determined that the underground section would undergo a controlled closure program ending March
2005. The closure program was prevented by a reduction in costs and improved productivity at the mine.

2005

Central Shaft placed on care and maintenance.
On July 6, 2005, we signed a Memorandum of Understanding with KBH regarding the acquisition by Khumo Gold of a
15% stake in our South African Operations.
On October 27, 2005, our board of directors approved the transaction with Khumo Gold. The new structure resulted in
Khumo Gold acquiring a 15% interest in a newly created vehicle, DRDGOLD SA, which includes 100% of ERPM,
Crown and Blyvoor. We owned an 85% interest in DRDGOLD SA.

2006

On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us
pursuant to the option agreement concluded between us and Khumo Gold in October 2005 to acquire a further 11% in
DRDGOLD SA.
A prospecting right covering an area of 1,252 hectares (3,093 acres) of the neighboring Sallies lease area, referred to as
ERPM Extension 1 was granted by the DME.

2007

A prospecting right, incorporating the southern section of the old Van Dyk mining lease area and a small portion of
Sallies, was granted by the DME. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres).

Mining and Processing

Underground mining operations at ERPM are comprised of two vertical shafts known as FEV Shaft and the Central Shaft.

There are also three additional shafts namely the South East Vertical Shaft, or SEV Shaft, used for the transport of employees and
materials and the hoisting of rock, the South West Vertical, or SWV, Shaft and the Hercules Shaft that are used for water pumping
only. The Cason Dump Project is used for the retreatment of surface material mined from the defunct Cason shaft.

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.

In fiscal 2007, a planned shift from lower volume, higher grade scattered mining in the west of the lease area to higher

volume, lower grade longwall mining in the east below 70 level proved problematic. Delays in the supply of services to the newly
developed longwalls reduced volumes mined and navigation of faulting encountered had a negative impact on both volumes and
yield. By the end of fiscal 2007 a catch-up in the delivery of services saw a recovery in volumes and a higher level of throughput for
the year. The average grade recovered was lower, however. Fault navigation is expected to continue for between six and nine months
into fiscal 2008. To limit the negative impacts of this, more focus will be directed towards grade management. A three-year,
$4.9 million (R35.0 million) plugging program to isolate ERPM’s FEV Shaft from water rising in the Central Witwatersrand Basin is
scheduled for completion in fiscal 2008. Increased throughput from ERPM’s Cason Dump made possible through upgrades to pumps
and pi ping and an increased milling capacity at the Knights plant, offset the impact of a slight drop in grade, resulting in higher
surface gold production.

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

In the future it will be necessary to extend the FEV decline from 75 to 78 levels to replace face length. There is also the

prospect of extending ERPM’s Ore Reserves into the neighboring Sallies lease area, referred to as ERPM Extension 1, and
significantly increasing the life of the mine’s underground operations.

An additional application to extend ERPM’s existing prospecting right eastwards into the Rooikraal/Withok area,

incorporating the southern section of the old Van Dyk mining lease area and a small portion of Sallies, was granted by the DME in
fiscal 2007. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres). Subsequent due diligence exercises will be
conducted which could eventually culminate in a deep-level mine with a life in excess of 15 years.

Environmental and Closure Aspects

There is a regular ingress of water into the underground workings of ERPM, which was contained by continuous pumping

from the underground section. On May 31, 2004, ERPM stopped continuous pumping of water from the underground section for
financial reasons due to the withdrawal of the State pumping subsidy and the low Rand gold price making the cost of full time
pumping unaffordable, with occasional pumping to surface conducted on weekends. In December 2004, the mine received the
pumping subsidy funds and continuous pumping was reinstated. Studies on the estimates of the probable rate of rise of water have
been inconsistent, with certain theories suggesting that the underground water might reach a natural subterranean equilibrium, whilst
other theories maintain that the water could decant 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 Bas in water out of the SWV Shaft. The ‘plugging’ program undertaken by ERPM will ensure that ERPM will
eventually not be dependant on pumping this water.

In fiscal 2007, ERPM updated its EMP to meet MPRDA requirements and submitted it to the DME for approval. The

concurrent rehabilitation of redundant structures and holdings continued throughout fiscal 2007. Pumping is continuing at SWV Shaft
with additional water from the Hercules basin expected at the end of October 2007. The pumping infrastructure has been upgraded in
anticipation of this additional water. ERPM, together with consultants, are currently looking at upgrading the total pumping capacity
at SWV Shaft with a more efficient system as part of an Eskom-funded demand side management project. The water is also
earmarked in the medium term for use by the Ergo Mining Joint Venture. As a long term sustainable solution, it is envisaged that the
water will be treated by the plant currently being tested for the Western Basin water.

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, 2007, is $6.4 million. A total of $1.3 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 R154,437 per kilogram ($660 per ounce), at June 30, 2007, our 74% share of

Proven and Probable Ore Reserves of ERPM was 0.7 million ounces, of which 0.5 million ounces relate to the underground section.
The remaining 0.2 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 2014. Based upon a gold price of approximately R117,055 per kilogram, at
June 30, 2006, our 85% share of Proven and Probable Ore Reserves of ERPM were 1.0 million ounces. The year on year decrease is
mostly attributable to the continuation of mining operations and the decrease in our attributable share from 85% to 74%. 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 seven years.

Current Production

Gold production for ERPM was 80,216 ounces in fiscal 2007 compared to our attributable share of gold production of

80,324 ounces in fiscal 2006 and 44,600 ounces in fiscal 2005.

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

Year ended June 30,

2007 2006

2005

Production

Surface Operations

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

1,932 1,761

830

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

0.011

0.012

0.011

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

22,153 20,325

9,208

Underground Operations

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

297 248

160

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

0.196

0.242

0.221

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

58,063 59,999

35,392

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

80,216 80,324

44,600

Results of Operations ($)

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

47,990 33,840

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

46,798 28,642

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

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

583 467

Total cost per ounce of gold ($)

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

638 555

Represents our 40% attributable share of production for fiscal 2005. From December 1, 2005, ERPM was a consolidated

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

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.”

Papua New Guinea

Tolukuma

Overview

Dome Resources (Pty) Limited, or Dome, was incorporated on May 17, 1984, under the name Dome Resources NL. Dome

owned and operated the Tolukuma gold and silver mine in PNG. During September 1999, we purchased 28,693,002 (19.93%) of
Dome’s ordinary shares for A$0.30 ($0.19) per share. In June 2001, we increased our shareholding to 100%.

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, 2007, the mine employed 755 people, including 129 contractors.

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 initially we held 88.3% of Emperor which in turn
holds the 100% interest in Tolukuma.

2007

On September 10, 2007, Emperor announced its intention to divest the Tolukuma gold mine situated in PNG.
Accordingly, the Company initiated a divestment process for the mine and a portfolio of associated exploration
tenements.
On October 22, 2007, we sold our entire interest in Emperor for A$55.9 million ($52.4 million).

Exploration and Development

Exploration within the mining lease, ML104, 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, 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.

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 2007, exploration expenditure of $2.6 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 2005 to fiscal 2007, including expansion of the mobile

plant, additions to equipment in the plant and acquisition of plant and equipment. During fiscal 2007, $6.5 million was spent, mainly
on mine development.

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 s ystem, 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, 2007, is $1.6 million. This has been included in the provision for
environmental rehabilitation, reclamation and closure costs on our balance sheet.

Life of Mine

Our attributable Proven and Probable Ore Reserves for Tolukuma, as at June 30, 2007, were 0.108 million ounces,

determined assuming a gold price of K2,024 per ounce ($660 per ounce). Based on a gold price of K1,840 per ounce ($582 per
ounce), at June 30, 2006, the Proven and Probable Ore Reserves of Tolukuma were 0.195 million ounces. The decrease in Ore
Reserves was primarily as a result of depletion.

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

For Tolukuma, Mr. Roger Cooper (MAusIMM and MAIG) is the appointed Mineral Resource competent person. As at June 30,
2007, Tolukuma has been assessed with a two year life of mine for its underground operations.

Current Production

Total gold production for fiscal 2007 was 44,181 ounces compared to 54,790 ounces for fiscal 2006. Safety concerns led to

a suspension of mining from the Gulbadi area, significantly reducing underground tonnage. This, together with problems related to
inventory and cash flow, led to mill feed being sourced primarily from low grade surface stockpiles. A major breakdown of the SAG
mill also had a negative impact on production.

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

Year ended June 30,

2007 2006

2005

Production

Underground Operations

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

204 213

235

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

0.22 0.26

0.33

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

44.181 54,790

76,314

Results of Operations ($)

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

28,926 29,085

32,446

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

38,398 33,448

25,278

Non US GAAP Financial Data

Cash cost per ounce of gold ($)

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

869 610

331

Total cost per ounce of gold ($)

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

1,391 767

434

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.”

Exploration Projects

Our exploration and project development activities during fiscal 2007 continued to enhance our growth strategy by

extending and replacing existing production ounces. In addition, escalations in the Uranium Oxide price prompted us to embark on
an exploration program to determine the uranium potential of our extensive surface dumps. The process commenced at Blyvoor and
will be applied to the surface dumps of the other South African operations in fiscal 2008.

South Africa

Blyvoor

In November 2007, encouraging results had been obtained from a drilling program to define the uranium resource in

Blyvoor’s slimes dam material and a 17.5 million pound uranium and 0.8 million ton sulphur resource was declared. For fiscal 2008,
an exploration drilling program linked to opening up and development has been scheduled to evaluate the south-west down-dip
extension of the Blyvoor ore body south of the Boulder Dyke. An initial 1,000 meters of exploration drilling to locate and define pay
shoots started in September 2007. If encouraging results are obtained, various mining options will be investigated to exploit the ore
body, including the possibility of a trackless decline.

ERPM Extension 1

ERPM has a prospecting right covering an area of 1,252 hectares (3,093 acres) of the neighboring Sallies lease area,

referred to as ERPM Extension 1. When this is converted into a mining right, it will enable the high-grade Composite Reef pay
shoot, currently being exploited at ERPM, to be pursued through the existing mine boundary.

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

trending sinistral tear fault. In order to confirm the anticipated change in the geological structure and hence pay shoot orientation,
it is envisaged that prospecting will take place through development situated 50 meters in the footwall. Owing to high induced
stress experienced at depth, there will be concurrent over-stoping on the reef plane. Although this is the safest option, permission
was sought from the DME and was granted in November 2007.

The development will be supplemented by exploration diamond drilling, conducted from exploration cross-cut drilling

platforms. In fiscal 2007, four exploration boreholes were drilled from current mining areas into ERPM Extension 1. The results
are summarized below.

Hole number

Grade (g/t)

Channel width (cm)

Borehole

No.1

26.7 162

Borehole

No.2

11.1 64

Borehole

No.3

2.5 227

Borehole

No.4

7.5 246

Borehole

No.4 (mining cut)

13.1 126

An application to convert the prospecting right for ERPM Extension 1 to a mining right will be submitted by the end of

2007.

ERPM Extension 2

An application to extend ERPM’s existing prospecting right eastwards into the Rooikraal/ Withok area, incorporating the

southern section of the old Van Dyk mining lease area and a small portion of Sallies, was granted by the DME in fiscal 2007.
Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres).

The resource for ERPM Extension 2 was estimated by independent consultants and audited by RSG. An Inferred

Resource of 28.6 Mt at 9.06 g/t (8.3 Moz), at a stope width of 125 cm was declared. The payshoot area equates to 17% of the
prospecting right, after applying 4% geological losses. The evaluation methodology applied was a global Sichel ‘t’ estimate based
on five historical surface boreholes with grades ranging from 1.13 g/t (0.033 oz/ton) over 94.6 cm to 216 g/t (6.307 oz/ton) over
15.5 cm. A sixth hole drilled from under ground and reportedly assaying at 84.9 g/t (2.479 oz/ton) over 29.2 cm was excluded
from the estimate, as it could not be verified.

Subsequent due diligence exercises will be conducted in fiscal 2008 which could eventually culminate in a deep level

mine with a life in excess of 15 years.

Argonaut Project

The Argonaut project represents the southern down-dip extension of the Central Rand Goldfields. It relates to the

possible exploitation of part of the potential resource at 3,000 to 4,500 meters below surface, situated south of the Robinson Deep
mine and extending eastwards to the Simmer and Jack mine.

On February 6, 2006, a prospecting right covering an area of 2,394 acres (969 hectares) over part of the project was

obtained. As the area covered by the current prospecting right is not large enough to sustain an ultra-deep mining operation, an
application for an extension to the current prospecting right by an additional 9,889 acres (4,002 hectares) was submitted to the
DME. The application was rejected on the grounds that prospecting would take place within a residential township. A request for
ministerial approval in terms of Section 48 of the MPRDA to apply for a permit over the residential area is being pursued.

Uranium Exploration

In November 2007, encouraging results had been obtained from a drilling program to define the uranium resource in

Blyvoor’s slimes dam material and a 17.5 million pound uranium and 0.8 million ton sulphur resource was declared.

Exploration drilling is currently under way to define the uranium potential of all Crown and ERPM current deposition sites.

Papua New Guinea

Tolukuma

Exploration was focused on the continued delineation of the Zine Structure and drilling in the Fundoot and Kagam areas to

the south of current mine activities. Exploration at Zine continued in an effort to define the lateral and vertical extent of
mineralization on the Zine Mid Zone and Zine South Zone. Drilling was completed from both surface and underground and returned
a range of positive results.

The most encouraging result was in hole ZN093 (as reported on March 27, 2007) where a bonanza grade intersection of

1.66 meters at 204.08g/t of gold and 63.2g/t of silver was returned. This was followed up with hole ZN094, which intersected the
Zine Structure approximately 70 meters above hole ZN093, and 30 meters below current development drives, and returned
1.66 meters at 63.58g/t of gold and 257.3g/t of silver. Compilation of data from adjacent drill holes has defined an irregular zone of
high grade intercepts of approximately 150 meters by 100 meters. These are very encouraging results and are consistent with high
grade assays from development drives above the drill hole intercepts. Further drilling is continuing in this area. Drilling is also being
undertaken on the deeper sections of the Tinabar and Zine structures.

Ten Exploration Licenses are under renewal. Mining Wardens Hearings have been completed for eight of the ten under

renewal. Renewals are following due process and are currently being considered by the Mines Advisory Council. Mine lease ML104,
expires on August 29, 2012. Below is a summary of Tolukuma’s exploration licenses:

EL No

No of Sub blocks

Area under EL (sq km)

Status

Expiry date

580

230

under renewal

April 4, 2007

683

102

under renewal

April 3, 2007

894

254

under renewal

April 3, 2007

1264

254

under renewal

April 29, 2007

1271

282

959

under renewal

January 4, 2007

1284

196

current

April 18, 2008

1297

254

under renewal

August 30, 2006

1327

245

under renewal

June 23, 2007

1352

275

931

under renewal

October 18, 2006

1366

169

572

under renewal

January 4, 2007

1379

313

1,067

under renewal

May 3, 2007

Totals 1,493

5,064

Closed and Discontinued Operations

Porgera

Overview

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

Venture, which held certain mining leases, easements and exploration licenses which form part of the Porgera gold mine, or
Porgera, in the highlands of PNG. We purchased this interest in October 2003 for a purchase consideration of $77.1 million.
Barrick was the owner of a 75% interest. The remaining 5% interest was held by Mineral Resources Enga Limited, or MRE (on
behalf of Enga Provincial Government and landowners in PNG). All of the various mineral tenements making up Porgera were
exploited collectively by the joint venture partners.

Barrick is the operator of Porgera and is subject to the control of a management committee made up of representatives of

the joint venture partners. Decisions regarding the assets which comprise Porgera, including any sale thereof, are made
collectively by the parties through the management committee. The parties also have a right of first refusal with regard to certain
assignments of assets which make up Porgera. Each party has the right to own and to take in kind and dispose of its share of all
ores, concentrates and refined products produced by Porgera. Each party also pays for its proportionate share of the costs
associated with the mining activities.

Production from Porgera is subject to a 2% net smelter royalty payable to the National Government Department of

Mining which then distributes it to the Enga Provincial Government, the Porgera District Authority and local landowners.

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick for a final cash consideration

of $255.0 million, which included interest on the original purchase price.

Property

The Porgera deposit and the mine are located in the Enga Province in the highlands of PNG, approximately 7,260 feet

(2,213 meters) to 8,910 feet (2,716 meters) above mean sea level, about 82 miles (132 kilometers) west of the established town of
Mount Hagen, 275 miles (443 kilometers) northwest of Port Moresby, and about 425 miles (684 kilometers) by road from the
coastal port of Lae from which all materials are freighted. The road is partly paved and passes through unstable mountainous
terrain with many major river crossings. Personnel are transported to mine site by bus, fixed wing aircraft and helicopter.

Temperatures range from 50 to 77 degrees Fahrenheit (10 to 25 degrees Celsius) and rainfall averages 3,650 mm per

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

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 limeston e 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.

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.

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 had
the right to acquire at cost up to a 10% interest in the project if developed.

1989

The joint venturers' application for a Special Mining Lease was approved in May and construction began
immediately. The State of Papua New Guinea accepted its full 10% entitlement (inclusive of 5% on behalf of the
Enga Provincial Government), thus diluting each of the other joint ventures down to 30% each. The State of Papua
New Guinea took its interest in the name of a corporate nominee, Mineral Resources Porgera Limited.

1990

Commercial production commenced in August. MIM sold its 30% interest to Highlands Gold Limited., or Highlands
Gold.

1993

Placer (PNG), Goldfields and Highland Gold each sold a further 5% to the State of Papua New Guinea (15%). The
additional 15% was taken by the State of Papua New Guinea in the name of a corporate nominee, Orogen Minerals
(Porgera) Limited.

1997

Placer Dome’s joint venture interest was increased from 25% to 50% as of January 1, 1997, following the completion
of the acquisition of Highlands Gold.

1999

The State of Papua New Guinea reorganized the holding of Mineral Resources Porgera Limited by transferring a 5%
direct interest in the Joint Venture to Mineral Resources Enga Limited owned by the Enga Provincial Government
and project area landowners.

2002

Placer Dome’s joint venture interest in Porgera was increased from 50% to 75% through the acquisition of
AurionGold. The State of Papua New Guinea reorganized its holdings in the Joint Venture such that Oil Search
Limited then held a 20% direct interest in the Joint Venture through two subsidiaries.

2003

We acquired the shares of Oil Search Limited in Orogen Minerals (Porgera) Limited and Mineral Resources Porgera
Limited through the amalgamation of Mineral Resources Porgera Limited with Orogen Minerals (Porgera) Limited
and Dome Resources (PNG) Limited, our wholly-owned subsidiary.

2004

Porgera concentrated on upgrading East Zone and drilling was carried out on the Lower Central Zone.

2005

Expansion of existing exploration projects continues but under a project termed Porgera Deep Minex.

2006

Barrick acquired Placer Dome’s 75% stake in Porgera. We concluded a sale and purchase agreement with Emperor,
where effectively we held 88.3% of Emperor who in turn held the 20% interest in the Porgera Joint Venture.

2007

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick for a final cash
consideration of $255.0 million, which included interest on the original purchase price.

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.

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
the 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 2007, leading to
reliance on low-grade, long-term stockpile material as the primary feed.

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.

Exploration and Development

During fiscal 2005 a project termed Porgera Deep Minex was initiated and continued into fiscal 2007. This project was

part of the mine’s ongoing existing exploration projects, however it 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

Due to the disposal of Porgera on August 17, 2007, no Proven and Probable Ore Reserves for Porgera have been included

in our Ore Reserve statement for fiscal 2007. The Proven and Probable Ore Reserves of the Porgera Joint Venture at
December 31, 2005, were 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, was 1.3 million ounces. Our
attributable 16% share of the Proven and Probable Ore Reserves in the Porgera Joint Venture was 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 before being acquired subsequently by Barrick. 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 clo sure.

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, 2007, was $8.7 million.

Production

Attributable production for the nine months ended March 31, 2007 from Porgera amounted to 71,570 ounces at a cash cost

and total cost per ounce of gold of $519 and $606, respectively. Production during the period was impacted by unplanned mill
downtime, suspension of mining in the mini-pit to allow construction of the lower buttress, unseasonably high rainfall and the Hides
power interruptions from lightning strikes in early December 2006, with production returning to normal levels by the end of the
March 2007 quarter. Low grade long term stockpiles and lower grades from the pit resulted in lower than expected gold feed grades;
however this was partly offset by higher grade open pit and underground ore for the period. In April 2007, Emperor announced the
sale of its 20% interest in the Porgera Joint Venture to Barrick. The effective date of the transaction was April 1, 2007.

The following table details the attributable operating and production results from the Porgera Joint Venture for the past three

fiscal years.

Year ended June 30,

2007

2006

2005

Production

Surface and underground operations

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

787 1,209

1,324

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

0.091 0.106

0.148

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

71,570 128,238

195,394

Results of Operations ($)

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

45,272 64,991

82,793

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

37,157 37,021

36,210

Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

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

519 289

185

Total cost per ounce of gold ($)

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

606 467

273

On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick. The legal effective date of the

transaction was April 1, 2007.

Cash cost per ounce and total cost per ounce are 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.”

Vatukoula

Overview

As of June 30, 2007, we owned, through DRD (Offshore), 78.72%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. The Vatukoula Mine is a multi-shaft
underground mine.

For a full description of the transactions associated with our acquisition of the Vatukoula Mine, see Item 4A: “History

and Development 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 was placed on a care
and maintenance program. On March 28, 2007, Emperor sold all its Fijian assets, including the Vatukoula Mine, to Westech Gold
(Pty) Limited, a private company incorporated in Australia, for A$1.00.

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 was placed
on a care and maintenance program.

2007

On March 28, 2007, Emperor sold all its Fijian assets, including the Vatukoula Mine, to Westech Gold (Pty) Limited,
a private company incorporated in Australia, for A$1.00.

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 the 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, were also practiced. The remnants
of 50 years of room and pillar mining were also being 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 was designed to introduce flexibility to production areas, improve
infrastructure and increase the productivity of the workforce. The plan included development of higher grade areas at Philip Shaft
and upgrading of associated shaft infrastructure. In addition, the entire workforce underwent comprehensive assessment, reskilling
and retraining. On December 5, 2006, the mine was placed on a care and maintenance program and on March 28, 2007, Emperor
sold all its Fijian assets, including the Vatukoula Mine.

Exploration and Development

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

1411 and 1435.

Environmental and Closure Aspects

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

Emperor’s board of directors was to work with Government environmental protection agencies to ensure compliance with all relevant
regulations. In addition, Emperor undertook environmental projects to ensure compliance with all relevant regulations.

Emperor had an internal reporting system with regard to environmental activities, and operational managers were required to

provide monthly updates on performance to the Managing Director who brought, and allowed operational managers to bring, major
issues to the attention of the full board of directors. During fiscal 2007, environmental monitoring continued with full cyanide
compliance at the Upper Lololevu, Golf, Nasivi rivers, the Dakavono dam discharge and the Dakavono creek.

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

Vatukoula, in current monetary terms as at June 30, 2006, was $1.0 million.

Life of Mine

Due to the disposal of Vatukoula on March 28, 2007, no Proven and Probable Ore Reserves for Vatukoula have been

included in our Ore Reserve statement for fiscal 2007. 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) was the appointed Mineral Resource competent
person.

Production

Attributable gold production in fiscal 2007 was 26,910 ounces compared with 28,397 ounces in fiscal 2006. An extensive

three month review of the Vatukoula mine was completed in early December 2006 following the arrival of the new management
team in August 2006. The results of the review concluded that continuation of the current mine plan was no longer economically
viable with the recommendation to immediately cease all current mining and milling activities and to embark upon a thorough and
exhaustive exploration program. This was envisaged to take 12 to 18 months followed by the completion of a bankable feasibility
study inclusive of a detailed forward looking life of mine development and mining plan. On December 5, 2006 the mine was
placed on care and maintenance.

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

Period ended June 30

2007

2006

2005

Production

Underground operations

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

129 177

234

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

0.21 0.16

0.19

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

26,910 28,397

45,426

Results of Operations ($)

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

16,784 2,440

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

24,355 7,453

Non US GAAP Financial Data

Cash cost per ounce of gold ($)

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

905 4,455

Total cost per ounce of gold ($)

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

5,624 4,189

These results are up to March 28, 2007, the date Emperor sold the Vatukoula Mine.

We increased our ownership in Emperor to 45.33% with effect from July 30, 2004. Emperor was 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.

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.”

North West Operations

Overview

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

which in turn owned 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 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 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 were 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 Simmer and Jack, for the sale of our

shareholdings in Buffelsfontein subject to certain conditions. These 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 the following:

•

Department of Water Affairs and Forestry, or DWAF, agreeing to substitute us with Simmer and Jack 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 Simmer and Jack; and

•

approval by the Competition Commission of South Africa.

On October 21, 2005, the scheme of arrangement for the acquisition of Buffelsfontein proposed by Simmer and Jack 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.

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 were 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 was

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

Geology and Mineralization

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

Witwatersrand Basin that exploited 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 was 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 was converted from a high-grade mine with a short life to a
medium-grade mine with a longer life. This was 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 was 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 to the North West Operations was provided from the Kardell and Hermies substation located between Stilfontein

and Orkney in the Buffels area. Electricity was supplied directly from the national power grid to these substations at 88,000 volts.
Further substations, located on mine site, transformed the power to 6,600 volts for direct supply to the shaft winder and air
compressors. The power supply was further reduced to 525 volts for smaller devices and equipment used on the mine. The average
annual power consumption was about 852 gigawatt hours, or GWHr, and the maximum demand was 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 the 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 suppressant s were
employed, where necessary.

With the sale of Buffelsfontein to Simmer and Jack, 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 Simmer and
Jack. Simmer and Jack 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.

Prior Years’ Production

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

Production

Surface Operations

Ore mined ('000 tons) .............................................................................................................................                                                        976
Recovered grade (oz/ton) ........................................................................................................................                                                     0.028
Gold produced (ounces) ..........................................................................................................................                                                  27,328
Underground Operations

Ore mined ('000 tons) .............................................................................................................................                                                    1,088
Recovered grade (oz/ton) ........................................................................................................................                                                    0.159
Gold produced (ounces) ..........................................................................................................................                                               172,522
Total ounces produced.............................................................................................................................                                               199,850
Results of Operations ($)

Revenues ('000) ....................................................................................................................................... 81,538
Production cost ('000).............................................................................................................................. 100,695
Non-US GAAP Financial Data

Cash cost per ounce of gold ($)

.......................................................................................................... 504

Total cost per ounce of gold ($)

.......................................................................................................... 630

Durban Deep

Overview

The Durban Deep mine was the original gold mine of the Group. Durban Deep is situated on the northern edge of the

Witwatersrand Basin immediately to the west of Johannesburg. Mining had been taking place within the lease area since the
discovery of the Witwatersrand Goldfield in 1886 at nearby Langlaagte.

As of August 2000, we ceased all underground and open pit mining operations at Durban Deep. Following the withdrawal

of our underground pumping subsidy, the deeper sections of the mine were flooded. On a combined basis, Durban Deep produced
more than 37 million ounces of gold prior to the cessation of operations.

We concluded an agreement with M5 on July 21, 2005, in terms of which M5, against payment of a non-refundable fee of

R1.5 million ($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 subsequently repudiated our agreement with M5 and notified Rand Leases Properties Limited
that we did not intend offering the property to them. Both parties indicated to us their intentions to institute legal proceedings for
the sale and transfer of the property. On December 12, 2006, Rand Leases Properties Limited issued a summons against us and we
filed an Appearance to Defend. A trial date has been allocated by the High Court of South Africa for April 25, 2008.

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

that Buffelsfontein Gold Mine Limited was placed under provisional liquidation.

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.”

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 2007, 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, 2007, is $7.9 million. This has been included in the
provision for environmental rehabilitation, restoration and closure costs on the balance sheet. A total of $2.3 million has been
contributed to the Environmental Trust Fund. This is an irrevocable trust, managed by specific responsible people who we nominated
and who are appointed as trustees by the Master of the High Court of South Africa.

West Wits

Overview

We own 100% of West Witwatersrand Gold Holdings Limited, or WWGH, which holds West Witwatersrand Gold

Mines Limited, or West Wits. We acquired the entire share capital of WWGH, as well as Consolidated Mining Corporation Limited's
loan to WWGH, on April 1, 1996. We also acquired the entire issued share capital and the shareholders' claim and loan account of
East Champ d'Or Gold Mine Limited, a gold mining company with mining title in the West Rand. The mining assets were sold to
Bophelo Trading (Pty) Limited, subsequently renamed, Mogale Gold (Pty) Limited, or Mogale, during fiscal 2004, effectively
leading to the closure of the mining operation.

West Wits is situated on the northern edge of the Witwatersrand Basin near the town of Krugersdorp to the west of

Johannesburg.

Property

West Wits was formed out of the northern section of Randfontein Estates located in the West Rand Goldfields, about 22

miles (35 kilometers) west of Johannesburg, Gauteng Province. The mine was reached via the R28 Johannesburg-Krugersdorp
highway.

West Wits also had rights to mine on three adjacent mining leases, namely, East Champ d'Or, West Rand Consolidated and

Luipaardsvlei. West Wits had mining title to 8,364 acres (3,790 hectares) and owned 72 acres (29 hectares) of freehold property on
which all of its mining operations were situated. These rights were sold to Mogale during fiscal 2004.

The climate of the Highveld area (at an elevation of 5,249 feet (1,600 meters) above mean sea level), where the mine is

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.

Environmental and Closure Aspects

Underground mining at West Wits ceased as of August 2000. We are required to affect environmental closure at West Wits

although certain aspects of this have been assumed by Mogale. Commensurate with the decision to close these operations, a detailed
closure program was prepared and submitted to the DME in December 2000. The drafting of the program was preceded by a
comprehensive risk assessment process, during which both residual and latent environmental risks and impacts were identified and
prioritized. The risks identified are currently being addressed by West Wits, in accordance with the closure program submitted to the
DME. In order to mitigate the impact of windblown dust from dormant tailings dams in proximity to surrounding communities, dust
monitoring and mitigating measures are implemented as required. These surface deposits have been purchased by Mogale, who are
actively prospecting to determine mining potential and are therefore not being vegetated at present.

Shaft rehabilitation is continuing. This will in effect reduce the ingress of surface water to the groundwater system.

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

remaining cost for West Wits, in current monetary terms as at June 30, 2007, is $1.3 million. This has been included in the provision
for environmental rehabilitation, restoration and closure costs on the balance sheet. A total of $2.0 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 former officers. Since then, four nearly identical securities class action complaints were filed against
us and the same officers. The cases were consolidated and a consolidated amended complaint was filed. Neither us, nor the individual
defendants were formally served with any complaint regarding these matters.

The actions were 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 alleged 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.

We defended the lawsuits brought against us and our officers named in the complaints. Our attorneys filed an application to

dismiss the plaintiffs’ case and on January 31, 2007, the US District Court issued an order directing the Clerk of the Court to enter
judgment dismissing the class actions.

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 witho ut 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 2 002.

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, we, DRD Australia Pty
Limited and DRD Australasia Aps instituted action in the High Court of South Africa, against Messrs. R.A.R. Kebble, M. Prinsloo,
J. Stratton and H. C. Buitendag and JCI Limited. 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. However, a dispute has arisen as

to whether or not the matter had been settled between the parties, JCI alleged that a settlement was reached and we have contested
this allegation. A trial date has been allocated for January 30, 2008, so that the High Court of South Africa can make a ruling on
whether the matter was settled between the parties. All related matters have been put on hold pending the decision of the High Court
of South Africa on January 30, 2008.

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, Anglo Gold Ashanti Limited, or Anglo Gold 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, Anglo Gold
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 Simmer and Jack 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 Simmer and Jack 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 Simmer and Jack 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).

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 ordered all parties to submit to mediation of their disputes, which was held during

December 2006. The mediation per se did not result in any settlement. The current status of these matters is the following:

• 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. This action was stayed on April 2, 2007 pending the decision by the High Court of South
Africa as to whether settlement was reached in the Rawas case.

• 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). This matter was settled on the basis detailed below.

• A deed of settlement was concluded with Mr. C. Mostert pursuant to which he agreed to pay a settlement amount by

August 31, 2007, in settlement of any claim arising from, or connected with the proceedings, or circumstances, or allegation
giving rise to, or referred to in the above and other proceedings. This settlement amount was received by us on August 27,
2007.

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. On June 29, 2007 judgment was delivered by the Supreme Court of New South Wales in
favor of Mr. M. Silver for payment of an amount of A$780,000 ($0.7 million). We still believe that this action is without merit and
have commenced appeal proceedings against the judgment.

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 R10.0 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 th at the trial court will hear and adjudicate this issue. We will continue to defend against these claims.

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.

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 and 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 Steel is abusing its dominant position by charging excessive prices for its local flat steel
products and providing inducements for steel purchasers to refrain from importing competing steel products. The Competition
Commission dismissed our claim, and the matter has since been referred to the Competition Tribunal, who has the authority to
overrule the determination of the commission. On the March 27, 2007 the Competition Tribunal delivered its judgment in terms of
which the Tribunal made the following findings:

• that Mittal Steel has abused its dominant position by engaging in excessive pricing; and

• that Mittal Steel did not induce customers not to deal with its competitors.

On the September 6, 2007, the Competition Tribunal imposed an administrative penalty of R691.8 million ($97.8 million)

against Mittal Steel. Mittal Steel has now filed its Notice of Appeal with the Competition Appeal Court challenging the decision of
the Competition Tribunal. It is estimated that the appeal will take place in the middle of 2008.

On August 2, 2006 and September 4, 2006, two virtually identical applications were brought against the Company and its

directors for relief under the MPRDA, by the Legal Resources Centre on behalf of the residents of two communities, Davidsonville
and Kagiso, who reside adjacent to tailings deposition sites of the now dormant Durban Deep mine, and at West Wits mine,
respectively. Whilst no financial compensation is sought, the communities are seeking orders for the revision of the EMPs of both
sites, and for the sites to be rehabilitated and closed in accordance with the standards of the MPRDA. Whilst we are challenging the
sustainability of the legal basis on which the claims have been brought, as well the extent of the relief sought we have:

• in respect of the Davidsonville action, accelerated certain rehabilitation measures which would effectively address dust

issues; and

• in respect of the Kagiso action, engaged the new owners of deposition sites, Mogale. Mogale recognize these tailings as an

inferred resource and in collaboration with us implement interim dust suppression measures pending their receipt of
prospecting and mining permits for these sites.

Although the High Court has allocated dates for the hearing in April and May 2008 for these matters, the parties are still

engaging in settlement negotiations with a view to avoid further litigation.

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 subsequently repudiated our agreement with M5 and notified Rand Leases Properties Limited that we did not intend offering the
property to them. Both parties indicated to us their intentions to institute legal proceedings for the sale and transfer of the property.
On December 12, 2006, Rand Leases Properties Limited issued a summons against us and we filed an Appearance to Defend. A tria l
date has been allocated by the High Court of South Africa for April 25, 2008.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following Operating and Financial Review and Prospects section is intended to help the reader understand the factors

that have affected the Company's financial condition and results of operations for the historical period covered by the financial
statements and management's assessment of factors and trends which are anticipated to have a material effect on the Company's
financial condition and results in future periods. This section is provided as a supplement to, and should be read in conjunction
with, our audited financial statements and the other financial information contained elsewhere in this Annual Report. Our financial
statements have been prepared in accordance with 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.

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 currently located in South Africa and
during fiscal 2007 we also had operations in Papua New Guinea and Fiji. During the fiscal years presented in this Annual Report
we divide our worldwide operations into two geographic regions, based on revenue generated from the location of the seller, as
follows:

• South Africa comprising the deep-level Blyvoor and ERPM operations, in addition to the Crown surface retreatment

operation (“South African Operations”).

• Australasia comprising Tolukuma, a 20% interest in the unincorporated Porgera Joint Venture, or Porgera, and

Vatukoula (“Australasian Operations”). On March 28, 2007, Emperor sold all of its Fijian assets, including the
Vatukoula mine. On August 17, 2007, Emperor sold its 20% interest in the Porgera Joint Venture to Barrick and on
October 22, 2007, we sold our entire shareholding in Emperor to several institutional investors.

In fiscal 2007, the South African Operations accounted for 70% of our total production, 98% of our Ore Reserves, a

$5.9 million net profit after tax and 54% of our total assets. The Australasian Operations accounted for 30% of our total
production, 2% of our Ore Reserves, a net loss after tax of $175.0 million and 46% of our total assets.

Exploration activities are undertaken in South Africa and, up until October 22, 2007, were also undertaken in Papua New

Guinea.

From 1895 to 1997, our principal mining operation was the Durban Deep mine. Up to 1999, our general growth strategy

was to acquire existing under-performing mines in South Africa at relatively low acquisition costs, and turn them into profitable
business units by introducing low-cost mining methods and reducing costs through employing our experience in managing
marginal gold mines to more efficiently utilize existing infrastructures. From 1999 to 2006 our focus was to expand our operations
outside of South Africa by acquiring lower cash cost and higher margin mines than those in South Africa, through the acquisition
of Tolukuma, our 20% interest in Porgera and our 78.9% interest in Emperor (Vatukoula). With the recent exit from our
Australasian operations our strategy has now changed to refocus on our operations in South Africa. We intend to use the proceeds
we received from the disposal of our Australasian operations to stabilize our mature underground mining operations, to expand
our retreatment of surface tailings to recover gold, and to aggressively pursue our program of brownfields exploration in South
Africa.

An increase in revenue, offset by increased operational costs and a loss arising from our discontinued operations has

resulted in a weakening of our results for fiscal 2007 in comparison to fiscals 2006 and 2005. In fiscal 2007, there was a notable
decrease in our mining assets, following the disposal of Vatukoula during the year and the classification of the Porgera Joint
Venture as held for sale. Our working capital deficit in fiscal 2007 increased primarily as a result of the short-term portion of the
long-term loans in Emperor, which were repaid in the first quarter of fiscal 2008.

As at June 30, 2007, we had Ore Reserves of approximately 6.3 million ounces, compared to 8.8 million ounces as at

June 30, 2006. The decrease in our Ore Reserves was mainly as a result of the closure and subsequent disposal of Vatukoula and

our interest in the Porgera Joint Venture.

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.

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 existi ng 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 2007, 2006 and 2005 fiscal years:

2007 fiscal year

2006 fiscal year

% change

Opening gold spot price on July 1, ..................................

$599 per ounce

$437 per ounce

37%

Closing gold spot price on June 30, .................................

$651 per ounce

$599 per ounce

Lowest gold spot price during the fiscal year ..................

$561 per ounce

$418 per ounce

34%

Highest gold spot price during the fiscal year..................

$691 per ounce

$726 per ounce

-5%

Average gold spot price for the fiscal year ......................

$638 per ounce

$526 per ounce

21%

2006 fiscal year

2005 fiscal year

% change

Opening gold spot price on July 1, ..................................

$437 per ounce

$396 per ounce

10%

Closing gold spot price on June 30, .................................

$599 per ounce

$437 per ounce

37%

Lowest gold spot price during the fiscal year ..................

$418 per ounce

$387 per ounce

Highest gold spot price during the fiscal year..................

$726 per ounce

$454 per ounce

60%

Average gold spot price for the fiscal year ......................

$526 per ounce

$421 per ounce

25%

2005 fiscal year

2004 fiscal year

% change

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

Average gold spot price for the fiscal year ......................

$421 per ounce

$389 per ounce

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) increased from R2,630 per ounce, in fiscal 2005, to R3,377
per ounce in fiscal 2006 (a 28% increase from fiscal 2005) and R4,605 per ounce in fiscal 2007 (a 36% increase
from fiscal 2006).

•

Australian gold price (based on average prices for the year) increased from A$562 per ounce, in fiscal 2005, to
A$705 per ounce in fiscal 2006 (a 25% increase from fiscal 2005) and A$812 per ounce in fiscal 2007 (15%
increase from fiscal 2006).

Gold production and production costs

Attributable gold production from our continuing operations totaled 378,677 ounces during fiscal 2007, in comparison to

370,766 ounces in fiscal 2006, and 328,216 ounces in fiscal 2005. Porgera, Vatukoula and the North West Operations (our
discontinued operations) recorded production of 98,480 ounces in fiscal 2007, 156,635 ounces in fiscal 2006 and 395,244 ounces
in fiscal 2005.

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 39% of production costs for fiscal 2007, 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 increased from 251,902 ounces in fiscal 2005, produced from 9.8 million tonnes milled at an average yield of 0.80g/t,
to 315,976 ounces in fiscal 2006, produced from 12.3 million tonnes milled at an average yield of 0.80g/t, and to 334,496 ounces
in fiscal 2007, produced from 14.8 million tonnes milled at an average yield of 0.70g/t. During fiscal 2007, the average Rand gold
price strengthened by 36%, creating an opportunity to mine ore grades that were previously seen to be unprofitable. Blyvoor
produced 151,269 ounces from 4.4 million tonnes milled at an average yield of 1.07g/t in fiscal 2007, in comparison with
159,693 ounces from 4.3 million tonnes milled at an average yield of 1.15g/t in fiscal 2006 and 161,878 ounces, produced from
3.5 million tonnes milled at an average yield of 1.43g/t in fiscal 2005. The decrease in the grade noted in fiscals 2007 and 2006
was due to a decision take n to move out of seismically active areas, resulting in lower grades being mined. Crown produced
103,011 attributable ounces from 8.4 million attributable tonnes milled at an average yield of 0.38g/t in fiscal 2007, in comparison
with 75,959 attributable ounces from 6.2 million attributable tonnes milled at an average yield of 0.38g/t in fiscal 2006 and 45,424
attributable ounces, produced from 3.6 million attributable tonnes milled at an average yield of 0.40g/t in fiscal 2005. ERPM
produced 80,216 attributable ounces from 2.0 million attributable tonnes milled at an average yield of 1.23g/t in fiscal 2007, in
comparison with 80,324 attributable ounces from 1.8 million attributable tonnes milled at an average yield of 1.37g/t in fiscal
2006 and 44,600 attributable ounces, produced from 0.9 million attributable tonnes milled at an average yield of 1.55g/t in fiscal
2005. The fiscal 2007 and 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 continuing Australasian Operation, comprising Tolukuma, production decreased from 76,314 ounces in fiscal

2005, produced from 0.2 million tonnes milled at an average yield of 11.25g/t, to 54,790 ounces, produced from 0.2 million
tonnes milled at an average yield of 8.83g/t in fiscal 2006, and then decreased to 44,181 ounces, produced from 0.2 million tonnes
milled at an average yield of 7.43g/t in fiscal 2007. Safety concerns at Tolukuma led to a suspension of mining from the Gulbadi
area, significantly reducing underground tonnage. This, together with problems related to inventory and cash flow, led to mill feed
being sourced primarily from low grade surface stockpiles. A major breakdown of the SAG mill also had a negative impact on
production.

Due to the significantly lower production at our continuing Australasian Operation and higher costs, this operation produced

at a cash cost

of $911 per ounce and a total cost

of $1,609 per ounce in fiscal 2007, compared with our South African Operations

that produced at a cash cost of $532 per ounce and a total cost of $605 per ounce in fiscal 2007.

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.”

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.”

General economic factors

As at November 30, 2007, we have three operations in South Africa 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 South Africa. In
conducting mining operations, we recognize the inherent risks and uncertainties of the industry, and the wasting nature of the
assets.

Effect of exchange rate fluctuations

For the year ended June 30, 2007, approximately 70% of our total revenues were generated in South Africa, and

approximately 30% of our total revenues were generated from our Australasian Operations. Most of our production costs were
denominated in local currencies, such as the South African Rand, the Papua New Guinean Kina and the Fiji Dollar. In fiscal 2007,
we derived 100% of our revenues in Dollars and incurred approximately 80% of our production costs in these local currencies.
Fiscal 2007 was marked by more consistency in the Dollar, leading to a weakening in the Rand-Dollar exchange rate, which
accounted for a $65 per ounce, or 11%, decrease in cash costs per ounce for our South African Operations from fiscal 2006 to
fiscal 2007. This follows the trend noted in fiscal 2006 which was marked by a stabilization of the prior year trends of the
weakening of the Dollar against the Rand. In fiscal 2006, this currency movement accounted for a $16 per ounce, or 3%, decrease
in cash costs per ounce for our South Af rican Operations from fiscal 2005. 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 12% against the Dollar in fiscal 2007 compared to fiscal 2006 and weakened by 3% from fiscal
2005 to fiscal 2006. This has led to an effective increase of 9% in the average Rand gold price in fiscal 2007 and an increase of
3% in fiscal 2006. The Kina, based on average rates in the respective fiscal years, strengthened by 3% against the Dollar in fiscal
2007 and strengthened by 7% in fiscal 2006. The Australian Dollar, based on average rates in the respective fiscal years,
strengthened by 5% against the Dollar in fiscal 2007 and weakened by 1% in fiscal 2006.

As an unhedged gold producer we do not enter into forward gold sales contracts to reduce our exposure to market

fluctuations in the Dollar gold price or the exchange rate movements 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 our continuing operations was $722 per ounce of gold
produced in fiscal 2007, $541 per ounce of gold produced in fiscal 2006 and $594 per ounce in fiscal 2005. The average gold
price received, from continuing operations, was $627 per ounce in fiscal 2007, $536 per ounce in fiscal 2006 and $423 per ounce
in fiscal 2005.

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, 2007, approximately
78% of our cash and cash equivalents (including restricted cash), being $14.9 million, were held in such currencies, compared
with 52%, or $35.3 million, at June 30, 2006, and 64%, or $14.8 million, at June 30, 2005.

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 the countries in which we operate, 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 movements 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,

2007

(%)

2006

(%)

2005

(%)

The average Rand/Dollar exchange rate weakened/(strengthened) by

12.3

3.3

(9.8)

Less: CPIX (inflation rate)............................................................................................................

6.4

4.3

3.5

Net effect ......................................................................................................................................

5.9 (1.0) (13.3)

The South African CPIX inflation rate has increased in fiscal 2007. The weakening in the exchange rate in fiscal 2007

and fiscal 2006 has offset 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,

2007

(%)

2006

(%)

2005

(%)

The average Kina/Dollar exchange rate weakened /(strengthened) by

(3.2)

(6.6)

(3.9)

Less: CPIX (inflation rate)............................................................................................................

2.5 1.9 0.9

Net effect ......................................................................................................................................

(5.7) (8.5) (4.8)

The Papua New Guinea CPIX inflation rate has increased from fiscal 2005 to fiscal 2007. 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,

2007

(%)

2006

(%)

2005

(%)

The average Fiji Dollar/Dollar exchange rate weakened /(strengthened) by

(3.0)

1.6

(4.9)

Less: CPIX (inflation rate)............................................................................................................

3.0 2.0 2.8

Net effect ......................................................................................................................................

(6.0) (0.4) (7.7)

The Fiji CPIX inflation rate has increased in fiscal 2007 following a decrease in fiscal 2006 compared to fiscal 2005,

with a strengthening in the exchange rate noted in fiscals 2007 and 2005.

South African political, economic and other factors

We are a South African company and subsequent to the sale of our stake in Emperor all our operations are based in South

Africa. As a result, we are subject to various economic, fiscal, monetary and political factors that affect South African companies
generally. South African companies are subject to exchange control regulations. Governmental officials have from time to time
stated their intentions to lift South Africa’s exchange control regulations when economic conditions permit such action. Over the
last few years, certain aspects of exchange controls for companies and individuals have been incrementally relaxed. It is, however,
impossible to predict when the South African Government will remove exchange controls in their entirety. South African
companies remain subject to restrictions on their ability to export and deploy capital outside of the Southern African Common
Monetary Area, unless dispensation has been granted by the South African Reserve Bank. For a detailed discussion of exchange
controls, see Item 1 0D.: “Exchange controls.”

On May 1, 2004, the MPRD Act became effective. Prior to the introduction of the MPRD Act, private ownership in

mineral rights and statutory mining rights in South Africa could be acquired through the common law or by statute. Now, all
mineral rights have been placed under the custodianship of the South African government under the provisions of the MPRD Act,
and old order proprietary rights need to be converted to new order rights of use within certain prescribed periods. We have
submitted certain applications in this regard. This process is described more fully under Item 4B.: “Business Overview –
Governmental regulations and their effects on our business - South Africa – Common Law Mineral Rights and Statutory Mining
Rights.”

Papua New Guinea and Fiji political, economic and other factors

Our operations based in Papua New Guinea and Fiji were 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 had to 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 or der. 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 may continue to be, involved in acquisitions and dispositions as part of this global trend and to
identify value-adding business combinations and acquisition opportunities. To ensure that our Ore Reserve base is maintained, or
increased, we are currently focusing on organic growth from our existing operations and brownfields exploration in South Africa.

Purchase of the Top Star Dump