As filed with the Securities and Exchange Commission on October 29, 2010

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

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

OR

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

OR

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

OR

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

For the fiscal year ended June 30, 2010

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)

50 CONSTANTIA BOULEVARD, CONSTANTIA KLOOF EXT 28, ROODEPOORT, 1709, SOUTH AFRICA

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of each class:

Name of each exchange on which registered:

Ordinary shares (traded in the form of American Depositary

Shares, each American Depositary Share representing ten

underlying ordinary shares.)

The NASDAQ Stock Market LLC

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, 2010 the Registrant had outstanding 384,884,379 ordinary shares, of no par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934. Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the

Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,

every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232-405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes

No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
Large accelerated filer Accelerated filer Non-accelerated filer
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this

filing . U.S. GAAP International Financial Reporting Standards as issued by the IASB Other

Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 Item 18
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

No

Contact details: Mr. T.J. Gwebu – Executive Officer: Legal, Compliance and Company Secretary

DRDGOLD Limited, Quadrum Office Park, First Floor, Building 1, 50 Constantia Boulevard, Constantia Kloof Ext. 28, Roodepoort,

1709, South Africa; Telephone: +27 11 470 2600

TABLE OF CONTENTS

Page

PART I

ITEM 1.

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

4

ITEM 2.

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

4

ITEM 3.

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

4

3A.

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

4

3B.

Capitalization

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

6

3C.

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

6

3D.

Risk

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

6

ITEM 4.

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

18

4A.

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

18

4B.

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

22

4C.

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

32

4D.

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

32

ITEM 4A.

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

53

ITEM 5.

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

54

5A.

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

55

5B.

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

78

5C.

Research

And

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

80

5D.

Trend

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

80

5E.

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

81

5F.

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

81

5G.

Safe

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

81

ITEM 6.

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

82

6A.

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

82

6B.

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

84

6C.

Board

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

85

6D.

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

89

6E.             Share Ownership..........................................................................................................................................................

91

ITEM 7.

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

93

7A.

Major

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

93

7B.

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

94

7C.

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

94

ITEM 8.

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

95

8A.

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

95

8B.

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

95

ITEM 9.

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

96

9A.

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

96

9B.

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

96

9C.

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

97

9D.

Selling

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

97

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

97

9F.

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

97

ITEM 10.

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

98

10A.

Share

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

98

10B.

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

98

10C.

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

100

10D.

Exchange

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

101

10E.

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

103

10F.

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

107

10G.

Statement

By

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

107

10H.

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

107

10I.

Subsidiary

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

108

ITEM  11.

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

108

ITEM  12.

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

109

12A.

Debt Securities.............................................................................................................................................................

109

12B.

Warrants and Rights ....................................................................................................................................................

109

12C.

Other Securities............................................................................................................................................................

109

12D

American Depositary Shares .......................................................................................................................................

109

TABLE OF CONTENTS

PART II

ITEM 13.

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

116

ITEM 14.

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

116

ITEM 15.

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

116

ITEM 16A.

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

117

ITEM 16B.

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

117

ITEM 16C.

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

118

ITEM 16D.

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

118

ITEM 16E.

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

118

ITEM 16F

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT ........................................................................................

118

ITEM 16G.

CORPORATE GOVERNANCE ...................................................................................................................................

119

PART III

ITEM 17.

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

120

ITEM 18.

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

F-pages

ITEM 19.

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

121

1

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 included in our corporate filings
in South Africa were prepared in accordance with International Financial Reporting Standards (IFRS), as approved by the
International Accounting Standards Board (IASB) for the financial years ended June 30, 2008, 2009 and 2010. All references to
“dollars” or “$” herein are to United States Dollars, references to “rand” or “R” are to South African Rands and references to “A$”
are to Australian Dollars.

Prior to fiscal year ended June 30, 2008, our annual financial statements (translated into dollars) were prepared and filed

with the U.S. Securities and Exchange Commission (“SEC”) in accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”). On December 21, 2007, the SEC adopted rules allowing foreign private issuers that file Annual
Reports on Form 20-F to file financial statements with the SEC in accordance with IFRS as issued by the IASB without
reconciliation to U.S. GAAP. As per these new rules, we changed our basis of presentation and included in this Annual Report our
consolidated financial statements prepared in accordance with IFRS as issued by the IASB. All financial information, except as
otherwise noted, are stated in accordance with IFRS as issued by the IASB.

We present our financial information in rand, which is our presentation currency. Solely for your convenience, this

Form 20-F contains translations of certain rand amounts into dollars at specified rates. These rand amounts do not represent actual
dollar amounts, nor could they necessarily have been converted into dollars at the rates indicated. Unless otherwise indicated, rand
amounts have been translated into dollars at the rate of R6.98 per $1.00, which was the noon buying rate in New York City on
September 30, 2010.

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

kilogram” which have been determined using industry guidelines promulgated by the Gold Institute and are not IFRS financial
measures. An investor should not consider these items in isolation or as alternatives to cash and cash equivalents, operating costs,
profit/(loss) attributable to equity owners of the parent, profit/(loss) before taxation and other items or any other measure of
financial performance presented in accordance with IFRS 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 kilogram, total costs and total costs per
kilogram 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 Prospects - Cash costs and total costs per kilogram- Reconciliation of cash costs per kilogram, total costs
and total costs per kilogram.”

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 ventures, 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.

2

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.

3

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.

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

4

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

5

Selected Consolidated Financial Data

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

Year ended June 30,

2010

1

2010

2009

2008

2

2007

2

2006

2

$’000

R’000

R’000

R’000                  R’000

R’000

Profit or loss Data

Revenue ................................................................

285,175

1,990,522

1,910,738

1,933,147

2,209,705

1,599,994

Results from operating activities .........................

5,084

35,485

(82,008)

(15,175)

(1,173,375)

(105,110)

Results from operating activities from

continuing operations........................................

5,084

35,485

(82,008)

102,194                22,541

7,641

Profit/(loss) for the year attributable to equity

owners of the parent ..........................................

29,773

207,815

129,124

996,041           (924,466)

(110,089)

Profit/(loss) for the year attributable to equity

Translations into Dollars in this table are for convenience only and are computed at the noon buying rate in New York City at September 30,

2010 of R6.98 per $1.00 . You should not view such translations as a representation that such amounts represent actual Dollar amounts.

2

Comparatives have been restated for the reclassification of the Australasian operations as discontinued operations. The discontinued operations

relate to the Porgera Joint Venture (disposed on August 17, 2007), Emperor (disposed on October 22, 2007) and Netgold (disposed on March 13,
2008).

6

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 or American Depositary Shares, or ADSs.

Risks related to our business and operations

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.

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. Due to the marginal nature of our
underground mine any sustained decline in the market price of gold, below the cost of production, could result in the closure of
our underground mine 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.

We 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. 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 2010 and fiscal 2009 the

rand strengthened against the dollar by 2.9% and 1.0% respectively (based on exchange rates at June 30 of each year). From
December 2001, when it reached R13.44 = $1.00, the rand has appreciated by 43.1% against the dollar to R7.65= $1.00 at June 30,
2010 (based on closing rates). At September 30, 2010 the Rand traded at R6.98 = $1.00, an 8.8% strengthening relative to the Dollar
from June 30, 2010.

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

our profitability. In fiscal 2010 and 2009 100% of production was from our South African mines providing significant exposure to the
strengthening of the rand and a decrease in profitability. As a result of disposing of our Australasian operations during fiscal 2008, we
are more exposed to the rand/dollar exchange rate as all our operations are now located in South Africa. If the rand were to continue
to appreciate against the dollar, our operations could experience a reduction in cash flow and profitability and this would negatively
and adversely affect our business, operating results and financial condition.

Inflation may have a material adverse effect on our results of operations.

South Africa has experienced high rates of inflation in the past. Because we are unable to control the market price at

which we sell the gold we produce, it is possible that significantly higher future inflation in South Africa may result in an increase
in our future operational costs in rand, without a concurrent devaluation of the operational costs in rand against the dollar or an
increase in the dollar price of gold. This could have a material adverse effect upon our results of operations and our financial
condition. Significantly higher and sustained inflation in the future, with a consequent increase in operational costs, could result in
operations being discontinued or reduced or rationalized at higher cost mines.

7

We have incurred losses in the past and may incur losses in the future .

We achieved net profits of R203.4 million, R110.7 million and R1.2 billion for fiscal 2010, 2009 and 2008, respectively.

Since fiscal 2007 we have disposed of our loss making Australasian operations and refocused on our profitable South African
operations, however, we may incur losses in the future. Our profits and cash flows of our operations are directly exposed to the
strength of the Rand and higher input costs as we do not hedge. Our underground mine is also regarded as an older, higher cost and
lower grade gold producer. In addition, our ability to identify Ore Reserves that have reasonable prospects for economic extraction
while maintaining sufficient controls on production and other costs, will have a material influence on the future viability of our
operations.

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 for future growth opportunities.

Our Ore Reserves for fiscal 2010 increased by 15% as a result of the higher rand gold price used in the Ore Reserve calculation
together with the expected increase in Crown’s deposition capacity as a consequence of the construction of the Crown/Ergo
pipeline linking Crown to Ergo’s Brakpan deposition site. Our Ore Reserves for fiscal 2009 increased by 16%, primarily due to
the inclusion of the Elsburg tailings owned by ERPM. In fiscal 2008, our Ore Reserves decreased by 7% primarily due to the
disposal of our interest in Emperor Mines Limited, or Emperor. Mining higher grade reserves in our underground mine is likely to
be more difficult in the future, due to the age of this mine and safety concerns and could result in increased production costs 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 and grow through acquisitions we may experience difficulty in managing these

acquisitions and integrating them with our existing operations.

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. Our expansion through 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;

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

•       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;

•       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 condition, 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;

8

•     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; and

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

an acquisition.

Any problems experienced in achieving successful integration or 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.

We may need to improve our internal controls over financial reporting and our independent auditors may not be able to

attest to their effectiveness because of inherent limitations.

We have evaluated our internal controls over financial reporting for the current fiscal period 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. Management has
determined that these controls are effective for the 2010 and 2009 fiscal years respectively and did not identify any material
weaknesses within our internal controls surrounding the financial reporting process. These internal controls over financial reporting
may not be sufficient to prevent significant deficiencies or material weaknesses in the future, and we may also identify other
conditions that could result in significant deficiencies or material weaknesses. In this event, we could experience a negative reaction
in the financial markets and incur additional costs in improving the condition of our internal controls. For a detailed discussion of
controls and procedures, see Item 15.: “Controls and Procedures.”

Increased production costs could have an adverse effect

on our results of operations .

Our historical production costs have varied significantly and we may not be able to accurately predict and adequately

provide for an increase in our production costs. Production costs are affected by, among 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.

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 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 September 2009,
at Blyvoor, Crown and ERPM we entered into a two year wage agreement with the United Association of South Africa, or UASA,
which took effect from October 1, 2009. Under the agreement, employees at Blyvoor received a 6.5% increase, employees at Crown
received a 6% increase and employees at ERPM received a 4.0% increase. In addition, the UASA employees are eligible for a gold
price/profit linked incentive scheme. The National Union of Mine Workers, or NUM, however, rejected a similar offer and
commenced strike action on September 15, 2009. The NUM strike ended on October 11, 2009 and the following wage agreements
were reached: a two year wage agreement at Crown with effect from October 1, 2009 pursuant to which an 8% wage increase was
agreed, along with another increase of 8% with effect from July 1, 2010; a one year wage agreement at ERPM with effect from
October 1, 2009 pursuant to which a 4% wage increase was agreed; and a two year wage agreement at Blyvoor with effect from July
1, 2009 pursuant to which an 8% wage increase was agreed for the first year, along with another increase of 8% for the second year.
Between September 15, 2009 and October 11, 2009, our average daily gold production loss due to the strike actions was 320 ounces,
almost entirely from Blyvoor’s deep-level underground mining operation. In addition, in the past, we have been impacted by large
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 steel suppliers and parastatal entities 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 2010 as a result of the

general increase in the cost of crude oil in global markets. During fiscal 2009, the average brent crude oil price was approximately
$70 per barrel and in fiscal 2010, the average brent crude oil price was approximately $75 per barrel. In the event that crude oil prices
increase again, this could have a significant impact on our production costs.

9

Our initiatives to reduce costs, such as reducing our labor force, negotiating lower price increases for consumables and

stringent cost controls, 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 environmental laws and regulations. We

have estimated our aggregate Group Rehabilitation, Reclamation and Closure cost provision at R420.6 million included on our
statement of financial position as at June 30, 2010. 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, higher than expected cost increases, 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. Seismic activity has had, and may continue to have, a harmful effect on our business, operating results
and financial condition. For example, on May 29, 2009, the Blyvoor operations suffered the effects of a seismic event which knocked
out a number of its high grade panels in the 38/29 section at No. 5 Shaft. This resulted in gold production being approximately 151kg
lower than expected for the four month period ended October 31, 2009 (this excludes the impact of the strike action by our NUM
employees during the months of September and October 2009).

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

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

controlled, water from

underground mining areas could potentially rise to the surface or decant into surrounding underground mining

areas or natural underground water sources. Due to the withdrawal of government pumping subsidies at Durban Deep and West Wits,
we have ceased active pumping of underground water at these mines. We also stopped pumping of underground water at our ERPM
underground operation on August 20, 2009. 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 as a result of 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, which exposes us to greater risk of our infrastructure failing, higher maintenance costs and

potentially greater health, safety and environmental liabilities.

Some of our assets, especially at our underground mine, are 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. In addition, 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 underground mine predominantly comprises 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.

10

Limited tailings dam capacity at Crown exposes us to greater risk of financial loss due to lower production and health,

safety and environmental liabilities.

Our ageing tailings facilities at Crown are exposed to numerous risks and events, the occurrence of which may result in the

failure or breach of such a facility. These may include sabotage, failure to adhere to the codes of practice and natural disasters such as
excessive rainfall and seismicity. In the event that we are limited on how much treated ore, sand or slime we can deposit at Crown’s
deposition sites and deposition capacity created by the Ergo/Crown pipeline project, we could be forced to stop or limit operations,
the dams could overflow and the health and safety of our employees and communities living around these dams could be jeopardized.
In the event that this occurs, our Crown operations will be adversely affected and this in turn could have a material adverse effect on
our business, operating results and financial condition.

Ergo (which comprises ErgoGold and Ergo Mining (Pty) Limited, or the Ergo JV) also has tailings facilities that are

exposed to the same risks as described above, but as at September 30, 2010 these tailings facilities had sufficient capacity.

Due to the nature of our business, our Company faces extensive health and safety risks.

Regrettably two people died in work-related incidents during fiscal 2010, compared to five fatalities in fiscal 2009. One of

these fatalities occurred while work was being performed in the course of routine maintenance and the other fatality occurred as a
result of a conveyance incident. Subsequent to February 4, 2010 and up to September 30, 2010 it is encouraging to report that there
was no loss of life at any of our operations. According to section 54 of the Mine, Health and Safety Act of 1996, if an inspector
believes that any occurrence, practice or condition at a mine endangers or may endanger the health or safety of any person at the
mine, the inspector may give any instruction necessary to protect the health or safety of persons at the mine. These instructions could
include the suspension of operations at the whole or part of the mine. While seismic monitoring continues to be an invaluable tool in
the management of seismicity, there is still a risk of seismic induced fatalities occurring which we may not be able to prevent. These
incidents could lead to mine operations being halted and that will increase our unit costs due to loss of production. 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, business interruption and other
insurance contains certain exclusions and limitations on coverage. We have insured property, including loss of profits due to business
interruption in the amount of about R9.0 billion. Claims for each and every event are limited by the insurers to R1.0 billion. Business
interruption is only covered from the time the loss actually occurs and is subject to time and amount deductibles that vary between
categories. General liability, fidelity, directors and officers, and other insurance cover are also in place.

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. In addition, we compete with mining and
other companies on a global basis to attract and retain key human resources at all levels with appropriate technical skills and

operating and managerial experience necessary to operate the business. 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.

The Crown/Ergo pipeline is a start-up project and forecasts may not be achieved.

Implementation of the Crown/Ergo pipeline project commenced during June 2010 and is scheduled for completion by

August 2011. The pipeline will provide two of Crown’s plants with access to Ergo’s Brakpan deposition site, allowing Crown to
restore its maximum deposition capacity to 600 000tpm. Crown’s deposition capacity was reduced to 400 000tpm in fiscal 2009 due
to capacity constraints at its deposition site. Restored deposition capacity will allow Crown to account for new Ore Reserves on the
Western and Central Witwatersrand, thus increasing production and extending its life-of-mine. The Crown/Ergo pipeline project is
exposed to numerous risks associated with similar projects, including delays in completion, total abandonment of the project or lower
production than forecasted which could have a material adverse effect on our business, operating results and financial condition. As at
September 30, 2010, the project was on schedule.

11

Potential provisional judicial management order application to the High Court of South Africa for Blyvoor.

On November 10, 2009, the High Court of South Africa granted a provisional judicial management order over our

Blyvoor operation. The provisional judicial management order was granted in terms of the provisions of Section 427 of the South
African Companies Act. Subsequently, on April 13, 2010 application to the High Court of South Africa had been made to lift the
provisional judicial management order and the application was granted. In fiscal 2009, Blyvoor accounted for 129,473 ounces of
gold, or 52% of our total production and in fiscal 2010 it accounted for 106,452 ounces or 44% of our total production. Under the
terms of a provisional judicial management order, the court appoints a judicial manager who has a wide range of powers at his
disposal to take such actions he deems necessary to save the business. These could include giving certain creditors temporary
preference over others and agreeing compromises with creditors without the risk of committing an act of insolvency and thereby
exposing the mine to liquidation. Should circumstances occur in the future that impact on the sustainability of Blyvoor, then
management may once again apply for a provisional judicial management order or take other measures that they consider
appropriate to protect the business. If these circumstances occur, our business, financial condition and results of operations would
be materially, adversely affected.

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 jewelry;

•     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;

•      interest rates;
•      gold hedging and de-hedging by gold producers; and

•      actual or expected gold sales by central banks and the International Monetary Fund.

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

an extended period.

Current economic conditions may adversely affect the profitability of the Group’s operations.

The global economy is currently undergoing a period of prolonged recession and, despite recent signs of stabilization, the

future economic environment is likely to be less favorable than that of recent years. Since September 2008, the global financial
system has experienced difficult credit and liquidity conditions and disruptions resulting in major financial institutions consolidating
or going out of business, tightened credit markets, reduced liquidity, and extreme volatility in fixed income, credit, currency and
equity markets. These conditions may adversely affect the Group’s business. For example, tightening credit conditions may make it
more difficult for the Group to obtain financing on commercially acceptable terms or make it more likely that one or more of our key
suppliers may become insolvent and lead to a supply chain breakdown. In addition, general economic indicators have deteriorated,
including declining consumer sentiment, increased unemployment, declining economic growth and uncertainty regarding corporate
earnings. To the extent the current economic downturn worsens or the economic environment in which the Group operates does not
recover, the Group could experience a material adverse effect on its business, results of operations and financial condition.

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, underground operations at ERPM

have been halted since October 2008 and a decision was reached at the end of August 2009 to suspend underground production at
ERPM. Our future growth and profitability will depend, in part, on our ability to identify and acquire additional mineral rights, and
on the costs and results of our continued exploration and development programs. Gold mining companies may undertake
exploration activities to discover gold mineralization, which in turn may give rise to new gold bearing ore bodies. Exploration is
highly speculative in nature and requires substantial expenditure for drilling, sampling and analysis of ore bodies in order to
quantify the extent of the gold reserve. Many exploration programs, including some of ours, do not result in the discovery of
mineralization and any mineralization discovered may not be of sufficient quantity or quality to be mined profitably. If we discover a
viable deposit, it usually takes several years from the initial phases of exploration until production is possible.

12

During this time, the economic feasibility of production may change. Moreover, we rely on the evaluations of

professional geologists, geophysicists, and engineers for estimates in determining whether to commence or continue mining.
These estimates generally rely on scientific and economic assumptions, which in some instances may not be correct, and could
result in the expenditure of substantial amounts of money on a deposit before it can be determined with any degree of accuracy
whether or not the deposit contains economically recoverable mineralization. Uncertainties as to the metallurgical recovery of any
gold discovered may not warrant mining on the basis of available technology. As a result of these uncertainties, we may not
successfully acquire additional mineral rights, or identify new Proven and Probable Ore Reserves in sufficient quantities to justify
commercial operations in any of our properties. Our mineral exploration rights may also not contain commercially exploitable
reserves of gold. The costs incurred on unsuccessful exploration activities are, as a result, not likely to be recovered and we could
incur a write-down on our investment in that interest or the irrecoverable loss of funds spent. As at September 30, 2010, the Group
has broadened its exploration activities to include initial exploration activities on a small scale in Zimbabwe.

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, water, steel and electricity 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

•      a 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 significant legal claims.

13

Risks related to doing business in South Africa

Political or economic instability in South Africa 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 highs of 20.6%. This increase in inflation resulted in
considerable year on year increases in operational costs. The inflation rate in South Africa still remains relatively high compared to
first world countries, as of June 2010, the Consumer Price Inflation Index, or CPI, stood at 4.2%, down from 6.9% in June 2009, and
12.2% in June 2008. The relatively high inflation rate continued at 3.5% as at September 30, 2010. Continuing high levels of inflation
in South Africa for prolonged periods, without a concurrent devaluation of the rand or increase in the price of gold, could result in an
increase in our costs which could reduce our profitability. In January 2009, the South African Reserve Bank changed the way
inflation is measured by expanding the range of consumer goods used and changing the benchmark measure from CPIX (CPI minus
mortgage costs) to CPI. Mortgage costs have been replaced by owners’ equivalent rental (OER) to capture housing costs, making
CPIX redundant. The closest measure to CPIX is CPI minus OER.

Power stoppages or increases in the cost of power could negatively affect our results and financial condition.

Our mining operations are dependent on electrical power supplied by Eskom, South Africa’s state owned utility company.

As a result of a substantial increase in demand and insufficient generating capacity, Eskom has warned that the country could face
disruptions in electrical power supply. The available generating capacity of electricity was constrained mainly as a result of
unplanned maintenance at some of Eskom’s power stations, insufficient supply of coal to the coal fired plants and skills shortages. On
January 25, 2008, Eskom announced that they could no longer guarantee the supply of electricity to the South African mining
industry. Eskom subsequently cut off power supply to the mining industry for five days in fiscal 2008 and a number of power outages
followed over several months thereafter. Eskom did manage to contain electricity stoppages but the fact remains that the country’s
current reserve capacity is insufficient and the risk of electricity stoppages is expected to continue through 2013. Apart from the five-
day closure, our production has not been affected, however further power supply stoppages or power cost increases could have an
adverse effect on our operating results and financial condition. From July 1, 2009, Eskom’s average tariff increased by 31.3% and has
adversely affected our production costs particularly at our Blyvoor operation. Eskom have indicated that they do not have sufficient
funding required for planned infrastructure development, and have imposed the following average tariff increases: from April 1, 2010
an increase of 24.8%, from June 1, 2011 an increase of 25.8% and from June 1, 2012 an increase of 25.9%. These increases have had
an adverse affect on our production costs particularly at our Blyvoor operation and could have a material adverse effect on our
business, operating results and financial condition.

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

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

and is exacerbated in the presence of HIV/AIDS, represents a very serious health care challenge in the mining industry. Human
Immunodeficiency Virus, or HIV, is the virus that causes AIDS and South Africa has one of the highest HIV infection rates in the
world. It is estimated that approximately 30% - 35% 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 health and safety costs brought about by
the company’s social responsibility.

The treatment of occupational health diseases and the potential liabilities related to occupational health diseases may

have an adverse effect on the results of our operations and our financial condition.

The primary area of focus in respect of occupational health within our operations is noise-induced hearing loss (NIHL),

occupational lung diseases (OLD) and tuberculosis (TB). We provide occupational health services to our employees at our
occupational health centers and continue to improve preventive occupational hygiene initiatives. If the costs associated with
providing such occupational health services increase, such increase could have an adverse effect on the results of our operations and
our financial condition.

14

Increased theft at our work sites, particularly of copper, may result in greater risks to employees or interruptions in

production.

Crime statistics available in South Africa indicate an increase in theft. This together with price increases for copper as a

commodity has resulted in the increased theft of copper cable. All of our operations experience high incidents of copper cable theft
despite the implementation of security measures. In addition to the general risk to employees in an area where theft occurs, we may
suffer production losses and incur additional costs as a result of power interruptions caused by cable theft.

Possible scarcity of water may negatively affect our results and financial condition.

National studies conducted by the Water Research Commission, released during September 2009, found that water resources

were 4% lower than estimated in 1995 which may lead to the revision of water usage strategies by several sectors in the South
African economy, including electricity generation and municipalities. This may result in rationing or increased water costs in the
future. Such changes would adversely impact all of our operations, which require water to operate. In particular our surface
retreatment operations, which use water to transport the slimes or sand from reclaimed areas to the processing plant and to the tailings
facilities, would be adversely impacted. In addition, as our gold plants and piping infrastructure were designed to carry certain
minimum throughputs, any reductions in the volumes of available water may require us to halt production at these operations. We are
currently considering a project which envisages the pumping of underground water at ERPM for use by our surface retreatment
operations.

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 formulation or implementation of
government policies may be unpredictable on certain issues, including changes in laws relating to mineral rights and ownership of
mining assets and the rights to prospect and mine and in extreme cases, nationalization.

The Mineral and Petroleum Resources Development Act, 2002

On May 1, 2004, the new Minerals and Petroleum Resources Development Act, or the MPRD Act, came into effect, 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. We have submitted 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 include
market value, proof of actual loss, proof of ownership, nature of property, current use of the property and history of the acquisition.

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 Mineral Resources (formerly 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 Mineral Resources 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. We have

lodged applications to convert all of our old order rights, however, 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. West Wits and West Witwatersrand Consolidated Mine’s
application for conversion has been approved. Benoni and ERPM’s applications for conversion have received preliminary approval
but are still awaiting dates of execution from the Department of Mineral Resources. As at September 30, 2010 the remainder of our
old order mining rights is yet to be converted into new order mining rights. The MPRD Act states that the conversions must be
granted by the minister if all requirements are completed but it does not stipulate any time frame. The MPRD Act also provides for
holders of old order rights to continue to operate under the terms and conditions of such rights until conversions under the MPRD Act
have been completed.

15

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 initially indicated that it was 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. Two more drafts of the Royalty Bill were subsequently released on
October 11, 2006 and December 6, 2007 after going through several revisions. The Royalty Bill was promulgated by government on
August 14, 2008. The Mineral and Petroleum Resources Royalty Act was published on October 11, 2006 for public comment. The
Mineral and Petroleum Resources Royalty Act, No.28 of 2008 was enacted on November 21, 2008 and was published in the South
African Government Gazette on November 24, 2008 and Mineral and the Petroleum Resources Royalty Act (Administration), No.29
of 2008 on November 26, 2008, and was effective from March 1, 2010. These acts provide for the payment of a royalty, calculated
through a royalty rate formula (using rates of between 0.5% and 5.0%) applied against gross revenue per year, payable half yearly
with a third and final payment thereafter. The royalty is tax deductible and the cost after tax amounts to a rate of between 0.33% and
3.3% at the prevailing marginal tax rates applicable to the group. The royalty is payable on old unconverted mining rights and new
converted mining rights. Introduction of similar revenue based royalties or any future tax reforms would have an adverse effect on
the business, operating results and financial condition of our 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 Ore 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 34% of our production costs for fiscal 2010, 39% for fiscal 2009 and 41% for fiscal 2008. As of

June 30, 2010, we employ and contract 6,409 people, of whom approximately 83% are members of trade unions or employee
associations. We have entered into various agreements regulating wages and working conditions at our mines. Unreasonable wage
demands could increase production costs to levels where our operations are no longer profitable. This could lead to accelerated mine
closures and labor disruptions. In addition, we are subject to strikes by workers from time to time, which result in disruptions to our
mining operations. For example, from September 15, 2009 until October 11, 2009, a strike by members of the NUM union in
connection with a dispute over new wage agreements resulted in an average daily gold production loss of 320 ounces, almost entirely
from Blyvoor’s deep-level underground mining operations.

16

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.

Labor unrest and xenophobia could affect production.

We may 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. Furthermore, during fiscal 2008, South Africa fell victim to a slew of xenophobic attacks when a series of
riots started in the township of Alexandra. This violence of locals attacking migrants from other African countries had a direct impact
on our operations at ERPM. Three employees died and attendance was down at the operation for several days. Although these attacks
have been contained, the challenge for the South African Government is to come up with a long-term and judicious immigration
policy.

A repeat of such events 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, or Nasdaq. On a historical basis, the
trading volumes and liquidity of shares listed on the JSE have been low in comparison with the Nasdaq. For the 12 months ended
June 30, 2010, only 25% 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 to 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.

17

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 internal control over financial reporting. 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.

18

ITEM 4. INFORMATION ON THE COMPANY

4A. HISTORY AND DEVELOPMENT OF THE COMPANY

Introduction

DRDGOLD Limited is a South African gold mining company engaged in underground and surface gold mining including

exploration, extraction, processing and smelting. 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 (known as DRDSA Empowerment 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. DRDGOLD SA also wholly owns Ergo Mining (Pty) Limited, or the
Ergo JV, and it owns 65% of the Elsburg Gold Mining Joint Venture, or ErgoGold, with DRDGOLD holding the remaining 35%.
DRDGOLD is also a 50% partner in an early-stage gold exploration project on Zimbabwe’s Greenstone Belt. . As at June 30, 2010,
DRDGOLD's foreign subsidiaries, which were the holding companies for its previously disposed Australasian operations, have been
placed into voluntary liquidation.

We are a public limited liability 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. On December 3, 2004, the company changed its name from
Durban Roodepoort Deep, Limited to DRDGOLD Limited. In South Africa, we have focused our operations on the West
Witwatersrand Basin which has been a gold producing region for over 100 years.

To facilitate access to global capital markets our shares and/or related instruments trade on the JSE, Nasdaq, 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 1

st

Floor, Building 1, Quadrum Office Park, 50 Constantia Boulevard,

Constantia Kloof Ext. 28, Roodepoort, South Africa. The postal address is P.O. Box 390, Maraisburg 1700, South Africa. Our
telephone number is (+27 11) 470-2600 and our facsimile number is (+27 11) 470-2618. 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. Underground mining at ERPM was halted in October 2008.

•      Ergo was formed in June 2007 to explore and evaluate the possibility of processing up to 1.7 billion tons of gold, uranium

and sulphur-bearing tailings on the East and Central Rand goldfields of South Africa. Initially established as a 50:50 joint
venture with Mintails SA (Pty) Limited, or Mintails SA, a subsidiary of Mintails Limited of Australia, DRDGOLD acquired
the remaining 50% interest owned by Mintails SA in the Ergo JV on January 21, 2010. Ergo Phase 1, to recover and treat
over a period of 12 years, approximately 180 Mt of gold bearing surface tailings contained in the Elsburg tailings complex
was established under the Elsburg Gold Mining Joint Venture, or ErgoGold. On March 31, 2009, DRDGOLD obtained
control over ErgoGold, which was also formerly a 50:50 joint venture with Mintails SA.

Australasian Operations (discontinued 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 Papua New Guinea (PNG), provided an initial base in the Australasian region
and led to the acquisition of a 20% interest in the unincorporated Porgera Joint Venture.

On September 10, 2007, Emperor Mines Limited, or Emperor, which held a 100% interest in Tolukuma announced its

intention to divest the Tolukuma gold mine. On October 22, 2007, we sold our entire interest in Emperor.

19

Important Events in Our Development Generally and in the Current Year

Top Star Dump

On August 28, 2006, we concluded an agreement with AngloGold Ashanti Limited, or AngloGold 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. A further R28.4 million was spent on the infrastructure required to process the dump. The Top Star Dump was
evaluated geostatistically by us and reviewed independently by Coffey Mining (an exploration, mining and resource consulting
firm) and had a probable reserve of 5.2 Mt, at a grade of 0.775 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.

On August 21, 2008 a Mining Right was granted for gold recovery over the Top Star Dump, in favor of Crown by the

Department of Mineral Resources with effect from August 21, 2008. The mining right for the Top Star Dump has been granted
until August 20, 2013.

Ergo (consisting of ErgoGold and the Ergo JV)

On June 7, 2007, we and Mintails announced the formation of Ergo, a joint venture between Mintails SA and DRDGOLD

SA. Following discussions initiated in the first quarter of 2007, the joint venture parties agreed to pursue a strategy to consolidate
certain of their assets on the East Rand. Mintails SA contributed one fully refurbished carbon-in-leach, or CIL, circuit at the Brakpan
plant and DRDGOLD SA contributed the Elsburg tailings complex, comprising approximately 180 Mt of tailings. This part of the
project, previously referred to as Ergo Phase 1, was subsequently established under the Elsburg Gold Mining Joint Venture, or
ErgoGold. Mintails SA and DRDGOLD SA, through their subsidiaries, initially owned 50% each of ErgoGold and the Ergo JV.

On August 6, 2007, the joint venture parties entered into a sale of assets agreement with AngloGold Ashanti pursuant to

which it acquired the remaining moveable and immovable assets of the Ergo plant for a consideration of R42.8 million. These assets
will be operated by Ergo for its own account, under the AngloGold Ashanti authorizations, until new order mining rights have been
obtained. These assets consist of servitudes (access agreements), infrastructure, piping, equipment, old order mining rights and the
right to an additional 15 Mt of tailings material.

On November 26, 2007, we announced that DRDGOLD SA signed a binding term sheet with Mintails SA, which provided

for significant expansion of the joint venture through:

•      the planned refurbishment 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.

Additional agreements were concluded on November 14, 2007 for:

•      the acquisition by Ergo of additional tailings properties and the Withok deposition complex from AngloGold Ashanti for a

payment of R45.0 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. The Grootvlei properties formed part of the Mintails SA contribution to the expanded
Ergo JV.

Ergo Phase 1 (ErgoGold) involved the refurbishment of one CIL circuit at the Brakpan plant with the capacity to treat an

estimated 15Mt of tailings a year, for the recovery of approximately 75,000 ounces of gold a year. Ergo Phase 2 includes the
expansion of the gold plant by refurbishing the second CIL circuit and developing uranium and acid plants. Ergo is managed by
Crown.

On September 29, 2008, DRDGOLD SA acquired a further 15% interest in ErgoGold from Mintails SA resulting in

DRDGOLD SA, which holds its interest through its subsidiary, ERPM, holding a 65% interest and Mintails SA a 35% interest in
the joint venture. On December 8, 2008, DRDGOLD agreed to acquire Mintails SA's remaining interest in ErgoGold, as well as
all of the shareholder’s loans owed by ErgoGold to the Mintails group. The acquisition, which was completed on March 31, 2009,
resulted in the Group acquiring 100% of ErgoGold. The purchase consideration was paid in cash and amounted to R100.0 million
for the 15% interest and R177.0 million for the 35% interest.

On January 21, 2010, DRDGOLD SA through its subsidiary ERPM, acquired the remaining 50% interest in the Ergo JV

from Mintails SA for a total consideration of R82.1 million, consisting of R62.1 million in cash and payment of the balance of
R20.0 million with DRDGOLD’s shares in Witfontein Mining (Pty) Limited. The transaction was completed April 15, 2010 and
recorded in the financial statements effective May 1, 2010.

20

DRDGOLD treats ErgoGold and the Ergo JV as one operating segment, called Ergo, and includes their respective

financial results within its Annual Report in accordance with IFRS 8 (Operating Segments). Furthermore, the company’s
management believes it is appropriate to present ErgoGold and the Ergo JV together in this discussion as they share the same
infrastructure, human resources and mineable material, with ErgoGold being focused on the extraction of gold from the re-
treatment of the Elsburg and Benoni deposition sites, and the Ergo JV being an exploration project focused on the extraction of
uranium and further gold from a range of deposition sites (including the Elsburg and Benoni sites).

Emperor

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 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 R1.9 billion ($255.0 million), which included interest, and subsequently Emperor retired all its debt facilities. The
capital distribution was completed on September 3, 2007.

On October 22, 2007, we sold our entire interest in Emperor for R355.8 million (A$55.9 million) to 26 institutional

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

ERPM

On October 6, 2008 we ceased pumping at ERPM’s South West Vertical Shaft for safety reasons following the death of two

employees underground. Post mortems suggested that the two men, who had been conducting routine water level measurements, died
of asphyxiation. The South West Vertical Shaft had been used only for water pumping purposes for several years.

The Department of Mineral Resources issued a Section 54 notice under the Mine Health and Safety Act, subjecting access

into the area to certain restrictions and conditions relating to ventilation. On October 23, 2008, drilling and blasting operations were
suspended in all shafts after the cessation of pumping of underground water at South West Vertical shaft on October 6, 2008 for
safety reasons.

On November 19, 2008, we announced our intention to place on care and maintenance the underground operations of

ERPM, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to determine the future
of the mine’s 1,700 employees. The consultation process was completed on January 20, 2009 and 1,335 employees were
retrenched. On August 20, 2009, we discontinued care and maintenance and closed the underground operations.

Blyvoor

On November 9, 2009, we announced that, in a bid to save our Blyvoor mine from liquidation, we intended applying to the

High Court of South Africa for a provisional judicial management order over the operation. A provisional judicial management order
was granted by the High Court of South Africa on November 10, 2009.

The application, in terms of the provisions of Section 427 of the South African Companies Act, was prompted by Blyvoor’s

inability to continue to sustain losses incurred since April 2009, which were brought about by the following circumstances:

•      a drop in the rand gold price received between April 1, 2009 and September 30, 2009, due to the strengthening of the

Rand against the US dollar;

•       extensive damage caused during May 2009 to higher-grade underground production areas at Blyvoor’s No. 5 Shaft by

seismic activity, restoration of which was expected to take until March 2010 to complete;

•       power utility Eskom’s higher winter tariffs, compounded by a 32% price increase effective from July 1, 2009, and the

likelihood of further increases in coming months; and

•       the wage strike by the National Union of Mineworkers, which lasted for almost a month and resulted in the loss of

approximately 8,000 ounces of production.

In terms of a provisional judicial management order, the court appoints a judicial manager who has a wide range of powers

at his disposal to take such actions he deems necessary to save the business. These could include giving certain creditors temporary
preference over others and agreeing compromises with creditors without the risk of committing an act of insolvency and thereby
exposing the mine to liquidation.

21

On April 13, 2010, DRDGOLD announced that the High Court of South Africa had agreed to lift, with immediate effect,

the provisional judicial management order in place since November 10, 2009. The Company’s application to the court for the

lifting of the provisional judicial management order, pointed out that for the period from November 2009 to February 2010,
Blyvoor had traded at an unaudited profit of R33.6 million, the amount owed to trade creditors at the time when the provisional
judicial management order was granted had been reduced from R39 million to R2.17 million, monthly production of gold had
increased from 8,745 ounces to 10,127 ounces and the gold price had increased from R240,000/kg to R265,000/kg.

On December 2, 2009, DRDGOLD announced a proposed transaction to sell 60% of Blyvoor to Aurora Empowerment

Systems (Pty) Limited, or Aurora, for R295 million. On April 1, 2010, the proposed transaction was cancelled by mutual
agreement between DRDGOLD and Aurora.

Other

We concluded an agreement with M5 Developments (Pty) Limited, or M5, on July 21, 2005, under which M5, against

payment of a non-refundable fee of R1.5 million, was granted an option to acquire Durban Deep’s mine village for R15.0 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

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 was allocated by the High Court of South Africa for
April 25, 2008; however the trial date has been postponed and the parties have suspended the pleadings with the possibility of
pursuing a settlement of the case.

On September 17, 2008, our wholly-owned subsidiary, DRD (Offshore) Limited, sold all of its shares in G.M. Network

Limited, or GoldMoney, to other GoldMoney shareholders. The cash consideration in respect of the disposal amounted to
R23.8 million ($2.9 million). GoldMoney is a company that holds the rights, patents and other intellectual property of
GoldMoney.com, which is a product specializing in digital gold currency. We previously held a 50.25% shareholding in Net-Gold
Services Limited, which was converted on March 30, 2008, into a 12.3% shareholding in GoldMoney.

In January 2009 we completed the acquisition of 28.33% of the shares in West Wits SA (Pty) Limited a subsidiary of

West Wits Mining Limited, an Australian based listed company. The formation of the company was to explore, evaluate and
potentially extract gold and uranium from the West Rand Goldfield of South Africa's Witwatersrand Basin.

On December 9, 2008, Argonaut Financial Services (Pty) Ltd, Mintails SA (Pty) Ltd and Witfontein Mining (Pty) Ltd,

entered into a share purchase agreement (SPA) which resulted in Argonaut Financial Services (Pty) Limited (a wholly owned
subsidiary of DRDGOLD) and Mintails SA each owning 50% of the shareholding of Witfontein as well as being authorized to
each appoint 50% of the board. Previously Mintails SA owned 100% of the issued share capital of Witfontein. Witfontein is to be
used as a future deposition establishment facility (i.e. slime deposition). On January 21, 2010, the Company entered into an
agreement to sell its interest in Witfontein Mining (Pty) Limited to Mintails SA for R20 million and regulatory approval was
obtained on April 15, 2010. The R20 million consideration was set off the acquisition price for the remaining 50% in the Ergo JV.

On July 22, 2009, the Company announced the rejection by the Mintails board of the offer by DRDGOLD SA to

purchase the South African business assets of Mintails after its announcement dated June 29, 2009, which set out information
relating to Mintails having conditionally accepted an offer by DRDGOLD SA, to acquire all of its South African business assets,
excluding its interest in West Wits Mining Limited.

On June 30, 2010, DRDGOLD signed a heads of agreement with the JSE listed White Water Resources Limited, or

White Water, according to which White Water would acquire from ERPM, for the amount of R18.5 million, the prospecting right
over ERPM Extensions 1 and 2 and the mining right over ERPM Extension 1. ERPM`s mining right application over Extension 1
is pending. Both extensions are contiguous to the ERPM lease area. The purchase consideration would be settled through the issue
of 74 million ordinary shares in White Water and 26 shares in a special purpose vehicle to be created which would hold the assets
acquired by White Water from ERPM. In the event that the Department of Mineral Resources did not approve the transfer of one
or more of the prospecting or mining rights the consideration would be reduced to R9.3 million to be settled through the issue of
37 million ordinary shares in White Water and 26 ordinary shares in the special purpose vehicle to ERPM. The transaction was
subject to the successful conclusion of various conditions precedent, including approval of the transaction by White Water
shareholders and the DRDGOLD board of directors. On September 7, 2010 negotiations were terminated due to the non-
fulfillment of conditions precedent.

22

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 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 and retreatment of these previously abandoned Ore Reserves.

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.

The gold market was strong but remained volatile in fiscal 2010, trading between a low of $909 per ounce and a high of

$1,261 per ounce. The average spot price was 25% higher than in the previous fiscal year, at $1,092 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 R267,292 per kilogram which was 7% higher than the
previous year at R250,589 per kilogram.

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.

Our total revenue by geographic market was as follows:

Year ended June 30,

23

All gold produced by our South African Operations is sold on our behalf by 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 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 usually
sells the gold on the same day as delivery, for the London afternoon fixed Dollar price, 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 4.0% (Fiscal 2009: 4.0%) of RRL (which is jointly owned by South African mining companies). Mr. T.J. Gwebu
our Executive Officer Compliance, is a director of RRL and Mr. D.J. Pretorius, our Chief Executive Officer, is an alternate director of
RRL.

Ore Reserves

The tables below set out the Proven and Probable Ore Reserves that are the Group’s Ore Reserves as of June 30, 2010,

and 2009, in both imperial and metric units. Our Ore Reserves are comprised of our attributable Ore Reserves.

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 business 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 tailings, 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 business 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.

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.

24

Our Ore Reserves are prepared using three year average gold prices at the time of reserve determination. In light of the

significant increase in gold prices, since fiscal 2006 the Company prepares its life of mine business plans using the prevailing gold
price at the time of the reserve determination, which is at the end of the fiscal year.

Gold prices and exchange rates used for Ore Reserves and for our business plan are outlined in the following table.

In fiscal 2010, our attributable Ore Reserves increased by 15% from 5.2 million ounces at June 30, 2009, to 6.0 million

ounces at June 30, 2010, primarily as a consequence of the higher gold price.

Based on the life of mine business plans, the life of mine for each of our operations at June 30, 2010, were as follows:

                                                                                                   Underground                                                         Surface
Mine                                                                                            2010                             2009                              2010                              2009
Blyvoor ......................................................

20 years

20 years

3 years

5 years

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

Not applicable

Not applicable

14 years

8 years

Ergo............................................................

Not applicable

Not applicable

12 years

12 years

Our Ore Reserves as of June 30, 2010 and 2009 are set forth in the table below.

25

Ore Reserves: Imperial

At June 30, 2010

At June 30, 2009

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)

Proven and Probable Ore reserves for fiscal 2010 and 2009 reflect our attributable 74% interest in Blyvoor, Crown and Ergo.

2

Crown’s Ore reserves include the Cason Dump which is being processed by Crown, however the mining right for the Cason Dump is owned by ERPM. Fiscal 2009 has been restated.

3

Ergo’s Ore reserves include the Elsburg and Benoni tailings complexes which are being processed by Ergo, however the mining rights for these tailings are owned by ERPM. Fiscal 2009 has been restated.

4

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

26

Ore Reserves: Metric

At June 30, 2010

At June 30, 2009

Proven Ore Reserves

Probable Ore Reserves

Proven Ore Reserves

Probable Ore Reserves

Proven and Probable Ore reserves for fiscal 2010 and 2009 reflect our attributable 74% interest in Blyvoor, Crown and Ergo.

2

Crown’s Ore reserves include the Cason Dump which is being processed by Crown, however the mining right for the Cason Dump is owned by ERPM. Fiscal 2009 has been restated

.

3

Ergo’s Ore reserves include the Elsburg and Benoni tailings complexes which are being processed by Ergo, however the mining rights for these tailings are owned by ERPM Fiscal 2009 has been restated

.

4

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

27

The measurement and classification of our Proven and Probable Ore Reserves are sensitive to the fluctuation of the gold

price. If we had used different gold prices than the three-year average prices at the time of reserve determination as of June 30, 2010,
2009 and 2008 respectively, we would have had significantly different reserves as of those dates. Using the same methodology and
assumptions as were used to estimate Ore Reserves but with different gold prices, our attributable Ore Reserves as of June 30, 2010,
2009 and 2008 would be as follows:

Year ended June 30, 2010

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

Rand gold price per kilogram............................................

236,752                 306,081               275,473                   336,689

Dollar gold price per ounce...............................................

926                     1,244                   1,120                       1,368

Attributable ore reserves (million ounces) ........................

6.0

7.3

6.8

7.8

Year ended June 30, 2009

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

Rand gold price per kilogram............................................

199,331                 241,834               217,651                   266,017

Dollar gold price per ounce...............................................

778                        885                      796                          973

Attributable ore reserves (million ounces) ........................

5.2

6.1

5.6

6.4

Year ended June 30, 2008

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

Rand gold price per kilogram............................................

150,622                 208,287               187,458                   229,115

Dollar gold price per ounce...............................................

664                        853                      768                          938

Attributable ore reserves (million ounces) ........................

4.5

7.9

7.4

8.4

The approximate mining recovery factors for the 2010 ore reserves shown in the above table are as follows:

The following table shows the average drill/sample spacing (rounded to the nearest foot), as at June 30, 2010, for each

category of Ore Reserves at our mines calculated based on a three year average dollar price of gold.

Mine

Proven

Reserves

Probable

Reserves

Blyvoor...................................................................................................................                            16 ft. by 24 ft.

Nil

Crown.....................................................................................................................                          328 ft. by 328 ft.

328 ft. by 328 ft.

Ergo ........................................................................................................................                          328 ft. by 328 ft.

Nil

28

The pay-limit grades based on the three year average dollar price for gold and costs used to determine reserves as of June 30,

2010, are as follows:

The pay-limit grades and costs used to determine reserves as of June 30, 2009, are as follows:

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.

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

Holders of mining authorizations issued under the previous regime were given an opportunity to apply for conversion

thereof 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 Mineral Resources (formerly
Department of Minerals and Energy), or the DMR, 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 DMR 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 criteria and the social and labor plan. These applications had 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

29

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 of
our mining rights have been submitted to the DMR and approval is awaited. During this period, we are permitted to continue to
operate under the terms and conditions of the old order rights which we hold.

If any of our applications for conversion are refused, a claim for compensation, based on expropriation may be lodged

against the State. The DMR 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 Mineral Resources in the event of a breach or, in the case of mining rights, of non-optimal mining in accordance with the
mining works program.

Mining royalties

Royalties from mining activities became payable to the state, as from March 1, 2010, under provisions contained in the

Mineral and Petroleum Resources Royalty Bill, or the Royalty Bill. The Royalty Bill was promulgated by government on
August 14, 2008. The most significant feature of the Royalty Bill is that the royalty is to be determined in accordance with a
formula based system and no longer to be a predetermined specific rate for the different types of minerals. The royalty will be
deductible for normal income tax purposes.

The Royalty Bill defines the tax base as gross sales excluding the transportation and handling costs of the final product.

The final product can be either the “refined” or “unrefined” mineral depending on the nature of the mineral in question. There has
been general consensus that a formula derived mineral royalty rate regime is more equitable and provides the necessary relief for
mines during times of difficulties, e.g. low commodity prices and mines that become marginal due to low grades. The formula-
based mineral royalty rate regime also ensures that the State shares in the benefits of higher commodity prices. The State will thus
share in the downside risks, when mines become marginal, and in the upside benefits during times of high commodity prices.
Based on comments received the formulae were adjusted to take into account the capital intensive nature of certain mining
operations, especially Gold mining and Oil and Gas. The formulae use earnings before income tax, or EBIT, with 100 percent
capital expensing. Given that a distinction will be drawn between refined and unrefined minerals, the mineral royalty percentage
rates (Y%) will be based on the following formulae:

For refined minerals: Y (%) = 0.5 + [(EBIT divided by (Gross Sales multiplied by 12.5)) multiplied by 100]. This rate

will be capped at a maximum of 5.0%.

For unrefined minerals: Y (%) = 0.5 + [(EBIT divided by (Gross Sales multiplied by 9.0)) multiplied by 100]. This rate

will be capped at a maximum of 7.0%.

For the purpose of calculating the royalty percentage rates a negative EBIT will be set equal to zero.

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 by qualifying parties as defined in the Mining Charter;

•      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.

30

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 ownership 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, Blyvoor and the Ergo JV as well as 65% of ErgoGold.
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 Health 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 and/or reduce our production capacity. There are amendments
to the act currently before parliament to ratify the stopping of production and increase punitive measures including increased financial
fines and legal liability of mine management. Some of the more important new provisions in the bill as approved by the Portfolio
Committee are a new section 50(7A) that obliges an inspector to impose a prohibition on the further functioning of a site where a
person’s death, serious injury or illness to a person, or a health threatening occurrence has occurred; a new section 86A(1) creating
a new offence for any person who contravenes or fails to comply with the provisions of the Mine Health and Safety Act thereby
causing a person’s death or serious injury or illness to a person. Subsection (3) further provides that (a) the “fact that the person
issued instructions prohibiting the performance or an omission is not in itself sufficient proof that all reasonable steps were taken
to prevent the performance or omission”; and that (b) “the defense of ignorance or mistake by any person accused cannot be
permitted”; or that (c) “the defense that the death of a person, injury, illness or endangerment was caused by the performance or an
omission of any individual within the employ of the employer may not be admitted”; a new section 86A(2) creating an offence of
vicarious liability for the employer where a Chief Executive Officer, manager, agent or employee of the employer committed an
offence and the employer either connived at or permitted the performance or an omission by the Chief Executive Officer,
manager, agent or employee concerned; or did not take all reasonable steps to prevent the performance or an omission. The
maximum fines have also been increased. Any owner convicted in terms of section 86 or 86A may be sentenced to “withdrawal or
suspension of the permit” or to a fine of R3 million or a period of imprisonment not exceeding five years or to both such fine and
imprisonment, while the maximum fine for other offences and for administrative fines have all been increased, with the highest
being R1 million.

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 2010, we contributed approximately R10.5 million under the COID Act to a multi-employer industry fund
administered by Rand Mutual Assurance Limited.

Under the Occupational Diseases in Mines and Works Act, 1973 (as amended), or the Occupational Diseases Act, the multi-

employer fund pays compensation to employees of mines performing “risk work,” usually in circumstances where the employee is
exposed to dust, gases, vapors, chemical substances or other working conditions which are potentially harmful, or if the employee
contracts a “compensatable disease,” which includes pneumoconiosis, tuberculosis, or a permanent obstruction of the airways. No
employee is entitled to benefits under the Occupational Diseases Act for any disease for which compensation has been received or is
still to be received under the COID Act. Currently the Group is compliant with these payment requirements, which are based on a
combination of the employee costs and claims made during the fiscal year.

Uranium and radon are often encountered during the ordinary course of gold mining operations in South Africa, and present

potential risks for radiation exposure of workers at those operations and the public to radiation in the nearby vicinity. We monitor our
uranium and radon emissions and believe that we are currently in compliance with all local laws and regulations pertaining to
uranium and radon management and that we are within the current legislative exposure limits prescribed for workers and the public,
under the Nuclear Energy Act, 1999 (as amended) and Regulations from the National Nuclear Regulator.

31

Environmental Regulation

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 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, or
EMP, 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 DMR 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 DMR 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.

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. 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. As of June 30, 2010, we
held a total of R126.1 million (2009: R129.7 million) in trust, the balance held in each fund being R31.9 million (2009:
R29.8 million) for Blyvoor, R21.8 million (2009: R20.3 million) for Durban Deep, R52.3 million (2009: R44.9 million) for Crown,
R20.1 million (2009: R17.2 million) for ERPM and nil for West Wits (2009: R17.2 million). Trustee meetings are held as required,
and quarterly reports on the financial status of the funds, are submitted to our board of directors.

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

provision has been impaired as at June 30, 2010, because it will be transferred along with the rehabilitation liability over the West
Wits mining rights which have been disposed of. 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 DMR 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 DMR’s consent, to make up the shortfall in
available cash funds.

The aggregate group rehabilitation, reclamation and closure cost provision was R420.6 million at June 30, 2010, compared

to R412.5 million at June 30, 2009.

32

4C. ORGANIZATIONAL STRUCTURE

The following chart shows our principal subsidiaries and joint venture as of September 30, 2010. All of our subsidiaries are

incorporated in South Africa. We hold the majority of the investments directly or indirectly as indicated below. Refer to Exhibit 8.1
for a list of our significant subsidiaries.

1

All shafts at Durban Deep have been closed.

2

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

DRDGOLD Limited

DRDGOLD South African

Operations (Pty) Limited

Durban Deep

1

West Witswatersrand Gold

Holdings Limited

West Witwatersrand Gold

Mines Limited

2

Blyvooruitzicht Gold

Mining Company Limited

Crown Gold Recoveries

(Pty) Limited

East Rand Proprietary

Mines Limited

ERGO Mining (Pty)

Limited

ErgoGold (formerly Elsburg

Gold Mining Joint Venture)

74%

100%

100%

100%

100%

100%

100%

65%

50%

50%

35%

4D. PROPERTY, PLANT AND EQUIPMENT

DRDGOLD OPERATIONS
SEPTEMBER 30, 2010

33

Description of Significant Subsidiaries, Properties and Mining Operations

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, ERPM and Ergo 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, which halted its underground mining operation in October 2008, continues as a surface operation processing sand
from the Cason Dump as part of the Crown operating segment. Ergo is a surface operation which is currently processing slime
tailings from the Elsburg tailings facility, which were historically deposited by ERPM’s underground mining operation. Our
underground operation is 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 clastic 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 Goldfield 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, 2010, Blyvoor had 4,480 employees, including contractors.

Property

Blyvoor is located on the West Wits line within the Far West Rand Goldfield 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 mining rights to new order rights under the MPRD Act. The net book value of the
mining assets at Blyvoor is R510.9 million at June 30, 2010, with 4.0 million attributable ounces of Ore Reserves.

34

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 R48.0 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 R19.0 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

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.

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.

2008

In January 2008, electricity supply to the mine was interrupted by Eskom which is government owned and production
suspended for a week due to safety concerns.

2009

In January 2009, a direct lightning strike to No. 5 shaft Eskom sub-station interrupted production at No. 5 shaft and other
areas drawing power from this supply. Employees underground at the time remained in the underground refuge bays until
hoisted to safety once the shaft feeder power had been restored. No injuries were recorded.
In May and June 2009, three seismic events in excess of 3.5 magnitude took place at No. 5 shaft. As these events affected
the highest grade carbon leader mining area, production from these areas was expected to resume in the third quarter of the
2010 fiscal year.
On November 9, 2009, we announced that, in a bid to save our Blyvoor mine from liquidation, we intended applying to the
High Court of South Africa for a provisional judicial management order over the operation. A provisional judicial
management order was granted by the High Court of South Africa on November 10, 2009.
In December 2009, Aurora Empowerment Systems (Pty) Limited proposed a transaction to purchase 60% of Blyvoor
for R295 million.

2010

In April 2010, the High Court of South Africa agreed to lift, with immediate effect, the provisional judicial management
order in place since November 10, 2009. By mutual agreement between DRDGOLD and Aurora, Aurora’s offer to
purchase 60% of Blyvoor was withdrawn.

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 higher than the Middelvlei Reef. The Middelvlei Reef consists of a variable number of polymictic
quartz conglomerate bands, inter-bedded 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.

35

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 the 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 electro-
winning 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. As at June 30, 2010, the overall plant utilization was 95%.

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.

In fiscal 2008, electricity supply to the mine was interrupted by Eskom and production suspended for a week due to safety

concerns. The situation did improve during March 2008, the operation is however still on a six hour standby notice, in the event that
power supply becomes unstable in the area. Eskom has requested all of its “Key Customers” to reduce power consumption by 10%,
Blyvoor has managed to adhere to this request and has continued during fiscal 2009 to save the maximum amount of energy possible.

During fiscal 2008, 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. Production from the WAP Project
began in October 2008 with the target of 1,200m ² per month being achieved by the end of fiscal 2009. As at June 30, 2009 a total of

R34.9 million had been spent on the project.

In fiscal 2009, seventeen production days were lost because of Section 54 closures imposed by the Department of

Mineral Resources following fatalities suffered after seismic events occurring and a further six production shifts were lost at No. 5
Shaft following a lightning strike at the shaft’s electrical substation. In May and June 2009, three seismic events in excess of 3.5
magnitude took place at No. 5 shaft. As these events affected the highest grade carbon leader mining area, production from these
areas was expected to resume in the third quarter of the 2010 fiscal year.

During fiscal 2010, mining ramp-up continued towards the 2,500m ²

per month targeted at the WAP Project, and by fiscal

year-end had reached some 1,750 m ² per month. On August 26, 2009, DRDGOLD announced that it had advised unions of its

intention to right-size the Blyvoor operation. Blyvoor proceeded with a 60-day facilitated consultation process in terms of Section
189A of the South African Labour Relations Act to determine the future of affected employees. The consultation process was
completed on October 26, 2009 and 330 employees were retrenched. Furthermore, On November 9, 2009, we announced that, in a
bid to save our Blyvoor mine from liquidation, we intended applying to the High Court of South Africa for a provisional judicial
management order over the operation. A provisional judicial management order was granted by the High Court of South Africa on
November 10, 2009. In April 2010, after Blyvoor had returned to profitability, the High Court of South Africa agreed to lift the
provisional judicial management order in place since November 10, 2009. See Item 4D.: “Property, Plant and Equipment – Legal
Proceedings”. Looking ahead, there will be continued focus on Blyvoor’s key sustainability drivers: face length, face advance,
productivity (m2/tec), and ‘mix’ management.

36

The following capital expenditure was incurred at Blyvoor in fiscal 2010, 2009 and 2008:

Year ended June 30,

1,916                 10,084                  14,269

Slimes pump stations and residue deposition.............................................................

3,193                   8,252                       971

15/29 incline shaft equipping.....................................................................................

-                   1,013                       542

Ice plant retrofit and upgrade.....................................................................................

5,212                           -                           -

Washing plant upgrade ..............................................................................................

-                   1,462

-

Symons crusher..........................................................................................................

3,482                           -                           -

Mobile cooling units ..................................................................................................

340

1,700

560

Safety related equipment and expansion of seismic monitoring network ..................

162                   8,451

-

Compressed air columns ............................................................................................

-

189

4,494

Opening up and development ....................................................................................

48,935                  41,406                31,122

Mining and engineering equipment renewals ............................................................

Exploration and Development

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. In fiscal 2009,
Blyvoor began an exploration drilling program linked to opening up and development 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. Exploration into the south-west block was delayed due to a
fire which temporarily cut off services into this area. In fiscal 2010, we continued with exploration and cover drilling with
reconnaissance visits made to the Carbon Leader areas at No 5 Shaft. Normal stope face sampling and geological mapping is
ongoing.

37

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 Wonderfontein Spruit (a stream adjacent to the Blyvoor mine). 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.

Blyvoor is a member of the Mining Interest Group consisting of all mines operating in the Wonderfontein Spruit

catchment area. This group was formed to coordinate efforts and studies in the Wonderfontein Spruit and to liaise with
government departments to determine what action if any is required in cleaning the stream. The government has also established a
specialist task team to determine what needs to be done. At this stage there is no clear solution. The Mining Interest Group is also
represented on the various catchment forums where NGO’s and other interested and affected parties are present. Blyvoor
continues to meet with the Potchefstroom municipality on a monthly basis where the quality of Blyvoor’s discharge water is
assessed. Blyvoor remains in compliance with the Potchefstroom agreement.

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 promptly. 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.

Blyvoor has updated its EMP to meet the new requirements of the MPRD Act. The EMP has been submitted to the DMR

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, 2010, is R38.4 million. This has been included in the provision for
environmental rehabilitation, restoration and closure costs in our statement of financial position. A total of R31.9 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.

Ore Reserves and Life of Mine

As at June 30, 2010 the attributable Proven and Probable Ore Reserves of Blyvoor were 4.0 million ounces. At

June 30, 2009, the attributable Proven and Probable Ore Reserves of Blyvoor were 3.5 million ounces. A Mineral Resource
competent person is appointed at each operation to review our Ore Reserve calculations for accuracy. For Blyvoor, Mr. Ryno Botha
(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 business plan

remains at 20 years, as at June 30, 2010.

Current Production

Blyvoor produced a total of 106,452 ounces of gold in fiscal 2010, with 77,226 ounces from underground areas and

29,226 ounces from surface areas. This represented 44% of our total production from continuing operations for fiscal 2010 of
241,194 ounces.

38

Underground gold production has decreased from 88,898 ounces in fiscal 2009 to 77,226 ounces in fiscal 2010. Reduced

underground production reflects the impact of the wage strike and the Section 89A restructuring process into October 2009.
Surface gold production decreased from 40,575 ounces in fiscal 2009 to 29,226 ounces in fiscal 2010, reflecting the impact of
suspended uneconomic rock dump recovery and recovery of increasing volumes of lower-grade material from the No 4 Dam.

Cash costs of $1,096 per ounce in fiscal 2010 increased from $719 per ounce in fiscal 2009. The increase in cash costs per

ounce of gold produced was primarily attributable to the lower production at Blyvoor in fiscal 2010 and the 32% electricity cost
increase in July 2009 and 25% increase in March 2010.

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

Year ended June 30,

2010            2009

2008

Production

Surface Operations

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

3,272            3,785

4,099

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

0.009             0.011

0.009

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

29,226           40,575

37,359

Underground Operations

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

698                664

757

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

0.111             0.134

0.137

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

77,226           88,898     103,813

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

106,452         129,473     141,172

Results of Operations (R)

Revenue ('000)........................................................................................................................................

861,409       1,018,527    848,229

Operating cost ('000) ..............................................................................................................................

888,180          842,329    697,281

Cash cost per ounce of gold ($)

1

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

1,096                 719

675

Total cost per ounce of gold ($) .............................................................................................................

1,086                  739

761

Crown

Overview

We own 74% of DRDGOLD SA, which in turn owns 100% of Crown. 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 2015 under the management of Crown based on the current
rate of retreatment of approximately 165,000 tpm. Crown undertakes the retreatment of surface sources deposited as tailing from
non-operating mining sites across central Johannesburg.

At June 30, 2010, Crown had 1,138 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 Goldfield 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, 2010, the net book value of Crown’s mining assets was R171.4 million with 0.9 million attributable ounces

of Ore Reserves.

1

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations.

39

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 Crown Consolidated Gold Recoveries Limited, or 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 AngloGold Ashanti to purchase the Top Star Dump.

2008

The Department of Mineral Resources issued in favour of Crown a mining right for gold recovery over the Top Star
Dump.

2009

The reclamation of the Top Star Dump commenced in December 2008. Crown also commenced with the reduction of
volumes to 400,000 tpm to implement the planned Crown Tailings Deposition Facility closure plan.

2010

The surface circuit of ERPM was incorporated into Crown for reporting purposes. Crown’s operating and financial
results for fiscal 2009 and fiscal 2008 have been restated for comparative reporting purposes.
Board approval was obtained to construct a pipeline to the Ergo tailings deposition site to enable Crown to restore its
deposition capacity to 600 000tpm. Restored deposition capacity provides the operation with the opportunity to bring to
account potential new resources. The pipeline is scheduled for completion in August 2011.

Mining and Processing

Crown undertakes the retreatment 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 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 8.0 MW. For Knights the average annual power consumption is about 36 GWHr and the maximum demand is about 7.0
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, 2010, the overall plant utilization
was 83% as a result of the planned reduction in tonnage throughput.

40

City Deep Plant: Commissioned in 1987, this surface/underground plant comprises 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 re-commissioned to facilitate the
treatment of sand.

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

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

Knights Plant: Commissioned in 1988, this surface/underground plant comprises a circuit including screening, primary

cycloning, milling in closed circuit with hydrocyclones, thickening, oxygen preconditioning, CIL, elution, electro-winning and
smelting to doré.

The following capital expenditure was incurred at Crown in fiscal 2010, 2009 and 2008:

Year ended June 30,

2010

2009

2008

R’000

R’000

R’000

Crown/Ergo Pipeline Project ................................................................

29,564

-

-

Top Star Dump......................................................................................

-

14,369

21,796

Residue pipelines ..................................................................................

-

5,460

2,451

Residue columns ...................................................................................

-

-

3,123

Mills, mill feed and control...................................................................

-

-

3,578

Vehicles and equipment........................................................................

1,414

272

1,256

Tailings management ............................................................................

13,823

21,910

8,781

Other .....................................................................................................

1,148

1,104

1,092

45,949

43,115

42,077

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 AngloGold Ashanti to purchase the Top Star Dump. The Top Star

Dump has been evaluated geostatistically and had a probable reserve of 5.2Mt, at a grade of 0.775g/t. The Top Star Dump mining
right was granted with effect from August 21, 2008 until August 20, 2013. We expect that Top Star will contribute approximately
45,000 ounces of gold per annum for a period of 20 months. Reclamation of the Top Star Dump commenced in December 2008

Additional exploration drilling previously planned for the current fiscal year to define the uranium and sulphur potential of

all Crown’s current deposition sites, has been put on hold. A feasibility study regarding the deposition of the Crown tailings on the
Brakpan tailings complex was completed in fiscal 2010 and R43 million was approved for the extension of the Brakpan tailings
complex to accommodate the Crown tailings. The estimated completion date is August 2011.

Environmental and Closure Aspects

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

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

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

chemical and organic dust suppression on recovery sites. Short-term dust control is accomplished through ridge ploughing the top
surface of dormant tailings dams. Additionally, environmentally friendly dust suppressants, such as molasses, are applied. Dust fall-

41

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 DMR during fiscal 2005. Crown has updated its EMP in compliance with
the MPRD Act and submitted it to the DMR 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, 2010, is approximately R157.6 million. A total of R52.3 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.

Ore Reserves and Life of Mine

As at June 30, 2010, our 74% share of the Proven and Probable Ore Reserves of Crown was 0.9 million ounces. In fiscal

2009, our 74% share of Proven and Probable Ore Reserves of Crown was 0.4 million ounces. A Mineral Resource competent person
is appointed at each operation to review our Ore Reserve calculations for accuracy. For Crown, Mr. Vivian Labuschage is the
appointed Mineral Resource competent person. The current life-of-mine business plan is estimated to be fourteen years.

Current Production

Gold production for Crown was 99,410 ounces in fiscal 2010 compared to gold production of 95,616 ounces in fiscal 2009.

The increase in gold production in fiscal 2010 was mainly as a result of improved recovered grade.

In fiscal 2010, cash costs increased to $814 per ounce of gold from $647 per ounce of gold in fiscal 2009, mainly as a result

of the 32% electricity cost increase in July 2009 and 25% increase in March 2010.

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

Year ended June 30,

2010

2009                2008

Production

Surface operations

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

7,850

8,826

11,126

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

0.013

0.011

0.10

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

99,410

95,616

110,021

Results of Operations (R)

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

834,788

733,990            661,827

Operating cost (‘000) ........................................................................................

615,731

560,064

459,703

Cash cost per ounce of gold ($)

1

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

814

647                    571

Total cost per ounce of gold ($).........................................................................

895

859

659

Ergo

Overview

Ergo (comprising of Ergo Mining (Pty) Limited, or the Ergo JV, and the Elsburg Gold Mining Joint Venture, or ErgoGold)

currently consists of one operating carbon-in-leach, or CIL, circuit at the Brakpan plant, the Brakpan/Withok deposition complex
purchased from AngloGold Ashanti and the Elsburg tailings complex, comprising approximately 180 Mt of tailings. Since 1987,
AngloGold Ashanti treated surface material at the Ergo JV until the operation was closed in 2005.

DRDGOLD SA, through its subsidiaries, initially owned 50% of the Ergo JV and ErgoGold. On September 29, 2008,

DRDGOLD SA acquired a further 15% interest in ErgoGold from Mintails SA resulting in DRDGOLD SA holding a 65% interest
through its subsidiary, ERPM, and Mintails SA holding a 35% interest in the joint venture. On December 8, 2008, DRDGOLD
acquired the remaining 35% of ErgoGold for a purchase consideration of R177.0 million. The transaction was completed on
March 31, 2009. On January 21, 2010, DRDGOLD acquired the remaining 50% of the Ergo JV from Mintails for a purchase
consideration of R82.1 million. The transaction was completed on April 15, 2010 and recorded in the financial statements

1

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations.

42

effective May 1, 2010. Ergo currently operates for its own account, under the AngloGold Ashanti authorizations, until new order
mining rights have been obtained. These assets comprise servitudes, or access agreements, infrastructure, piping, equipment and old
order mining rights.

At June 30, 2010, Ergo had 694 employees, including contractors.

Property

The Ergo operations are located approximately 43 miles (70 kilometers) east of the Johannesburg’s central business district

in the province of Gauteng. Access to the Brakpan plant is via the Ergo Road on the N17 Johannesburg-Springs motorway.

The acquisition of the Brakpan/Withok deposition site provides Ergo with extensive additional deposition capacity

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

The refurbishment of the first CIL circuit at the Brakpan plant now has the capacity to treat an estimated 15Mt of tailings a

year. Phase 2 envisages, firstly, the expansion of the gold plant by refurbishing the second CIL circuit and, secondly, developing
uranium and acid plants. The pre-feasibility study for developing uranium and acid plants has been placed on hold because of the
current economic environment and the current low prices of these commodities.

As of June 30, 2010, the net book value of Ergo’s mining assets was R1,144.0 million.

History

2007

The Ergo JV founded as a DRDGOLD SA and Mintails SA joint venture.

On August 6, 2007, the joint venture parties entered into a sale of assets agreement with AngloGold Ashanti pursuant to
which it acquired the remaining moveable and immovable assets of the Ergo plant for a consideration of R42.8 million.
Additional agreements were concluded with AngloGold Ashanti on November 14, 2007 for the acquisition by Ergo of
additional tailings properties and the Withok deposition complex for a payment of R45.0 million.

2008

Ergo Phase 1 was launched comprising the refurbishment and recomissioning of the Ergo plant’s first CIL circuit and
the retreatment of the Elsburg and Benoni tailings complexes.
DRDGOLD acquires Mintails SA’s stake in ErgoGold for R277.0 million.

2009

Ergo Phase 1 commissioning continues; first feeder line to the Ergo Plant from Elsburg tailings complex comes into
operation.
Ergo Phase 2 exploration drilling for gold, uranium and acid completed.

2010

DRDGOLD acquires control of the Ergo JV through the acquisition of Mintails SA’s 50% in the Ergo JV for
R82.1 million.
Ergo Phase 1 production ramp-up nears completion with the installation of the second Elsburg tailings complex feeder
line to the Ergo plant. Construction of the Crown/Ergo pipeline commences.

Mining and Processing

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

Johannesburg.

Material processed by Ergo is sourced from secondary surface sources, namely 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; however, no archive
material was treated up until September 30, 2010. The metallurgical plant has a current installed capacity to treat approximately
15.0 million tonne of material per year.

The feed stock is made up of slime and 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 and CIL technology to extract the gold. As at
June 30, 2010, the overall plant utilization was 95%.

Electricity to Ergo is supplied from various Eskom supply points for the reclamation units and the tailings storage

facilities. The plant is supplied from the national power grid via a secured source from the Ekurhuleni Council of 11,000 volts.
Plant sub stations are stepped down to 6,600 volts before being further reduced to 525 volts for the motor control purposes.

43

The following capital expenditure was incurred at Ergo in fiscal 2010, 2009 and 2008:

Year ended June 30,

2010

2009

2008

R’000

R’000

R’000

Purchase of Anglogold Ashanti assets ..................................................

33

2,577

46,513

Refurbishment of the Ergo plant...........................................................

8,167

10,427

73,995

Reclamation stations, pipeline and pumps ............................................

38,432

126,129

30,975

Reinstatement of the Brakpan tailings facility ......................................

197

5,584

8,594

Rehabilitation of the Brakpan tailings facility ......................................

19,709

13,884

268

Vehicles and equipment........................................................................

221

1,355

-

IT Infrastructure....................................................................................

41

388

-

Uranium and acid pre-feasibility study .................................................

-

1,636

1,622

Ekurhuleni Business Development Academy (EBDA) training
facility ...................................................................................................

397                 835                     -

Other .....................................................................................................

1,387

11,339

14,818

68,584

174,154

176,785

Exploration and Development

Exploration drilling has been done to define the uranium potential of the Elsburg complex. Independent competent

person reports on uranium, sulphur and gold for the Elsburg resources and reserves have been compiled.

Environmental and Closure Aspects

Ergo is located in close proximity to significant municipal infrastructure, commercial and residential development.

Environmental management programs, addressing a wide range of environmental issues, have been prepared by specialist
environmental consultants and integrated into the internal environmental assessment process.

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

Ergo, in current monetary terms as at June 30, 2010, is approximately R159.4 million.

Ore Reserves and Life of Mine

Ergo processes the Proven and Probable ore reserves at the Elsburg and Benoni tailings complexes. As at June 30, 2010, our

74% share of the Proven and Probable Ore Reserves of Ergo was 1.2 million ounces. In fiscal 2009, our 74% share of Proven and
Probable Ore Reserves of Ergo was 1.3 million ounces. A Mineral Resource competent person is appointed at each operation to
review our Ore Reserve calculations for accuracy. For Ergo, Mr. Vivian Labuschage is the appointed Mineral Resource competent
person. The current life-of-mine business plan is estimated to be twelve years.

Current Production

In fiscal 2010, production increased from 3,666 ounces in fiscal 2009 to 35,332 ounces as a result of Ergo Phase 1

production ramp-up nearing completion during fiscal 2010.

Cash costs in fiscal 2010 decreased to $963 per ounce from $2,213 per ounce in fiscal 2009, mainly as a result of the ramp-

up in production.

44

The following table details our attributable share of the production results from Ergo for the past fiscal year:

2010                      2009

Production

Surface operations

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

45

ERPM Extension 1 was granted by the DMR.

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 DMR. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres).

2008

On April 25, 2008, ERPM gave notice of intention to restructure the work force due to operational requirements and 239
employees were retrenched during June 2008.
On October 23, 2008, ERPM announced the suspension of drilling and blasting operations underground, following the
cessation of pumping of underground water at the South West Vertical shaft on October 6, 2008 for safety reasons
following the deaths of two employees.
On November 19, 2008, we announced our intention to place on care and maintenance the underground operations of
ERPM, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to determine
the future of the mine’s 1,700 employees

2009

In January 2009, consultations in terms of Section 189A of the Labour Relations Act regarding the future of employees
affected by the placing on care and maintenance of the underground operations were concluded and 1,335 employees
were retrenched. In August 2009 the care and maintenance of the underground operations was discontinued.

2010

ERPM’s surface operation, the Cason Dump, was incorporated into Crown for reporting purposes.

Mining and Processing

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

There were 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 were used for water pumping
only. The Cason Dump was used for the retreatment of surface material mined from the defunct Cason shaft.

In fiscal 2008, the ERPM underground operations were restructured in an attempt to return the mine to profitability. A

retrenchment agreement was reached with representative unions and associations without recourse to industrial action, and successful
application of various avoidance measures contained the number of employees retrenched to 239.

On October 23, 2008, drilling and blasting operations were suspended after the cessation of pumping of underground water

at SWV Shaft on October 6, 2008 for safety reasons following the deaths of two employees at the shaft on September 19, 2008.
Although the FEV Shaft where production was taking place was sealed off from water ingress from the SWV Shaft, the pumps at
FEV Shaft were no longer able to cope with rising water, which included the water resulting from the ice sent underground every day
to cool down the underground working places. Without being able to continue to supply ice underground for this purpose, the
underground temperature would become unacceptably high and it would not have been safe for employees to continue work
underground at the FEV shaft.

On November 19, 2008, we announced our intention to place on care and maintenance the underground operations of

ERPM, and to proceed with a consultation process in terms of Section 189A of the Labour Relations Act to determine the future
of the mine’s 1,700 employees. In January 2009, the consultations were concluded and 1,335 employees were retrenched. On
August 20, 2009, care and maintenance of the underground operations was stopped.

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 has reduced to about 105 GWHr and the maximum demand to about 24 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

The necessity to extend the FEV decline from 75 to 78 levels to replace face length was stopped due to the cessation of

drilling and blasting operations in October 2008. The pre-feasibility study conducted by an external mining consulting company, to
investigate the possibility of exploiting these reserves by means of a trackless decline system, and significantly increasing the life of
the underground operations was also stopped.

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 DMR in
fiscal 2007. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres). Subsequent feasibility studies conducted
which could eventually culminate in a deep-level mine with a life in excess of 15 years was stopped after underground mining was
halted.

All underground exploration and development has been stopped due to the discontinuation of underground activities.

46

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’s SWV Shaft has
been used for some time to manage the rising water level on the Central Witwatersrand Basin. Some 60 megalitres of water were
pumped daily from a depth of approximately 1,000 metres.

In fiscal 2007, ERPM updated its EMP to meet MPRD Act requirements and submitted it to the DMR for approval. The

concurrent rehabilitation of redundant structures and holdings continued throughout fiscal 2007. The pumping infrastructure was
upgraded at the South West Vertical Shaft in anticipation of the additional water from the Hercules basin. Pumping continued during
fiscal 2007 and 2008 at the South West Vertical Shaft.

On October 6, 2008, pumping of underground water at the South West Vertical Shaft was stopped for safety reasons

following the death of two employees at the shaft on September 19, 2008. Management concluded that the project to upgrade the total
pumping capacity at South West Vertical Shaft with a more efficient system as part of an Eskom-funded demand-side management
project was not economically viable.

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

cost for ERPM, in current monetary terms as at June 30, 2010, is R50.0 million. A total of R20.1 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.

Ore Reserves and Life of Mine

As at June 30, 2010, our 74% share of Proven and Probable Ore Reserves of ERPM are included under Crown and Ergo.

The total surface Ore Reserves comprise of 0.1 million ounces from the Cason Dump and 1.2 million ounces from the Elsburg and
Benoni tailings complexes, which will be processed over the next seven and twelve years, respectively. A Mineral Resource
competent person is appointed at each operation to review our Ore Reserve calculations for accuracy. For ERPM, Mr. Ryno Botha
(SACNASP) is the appointed Mineral Resource competent person.

Current Production

ERPM underground section produced no gold during fiscal 2010. Production from the surface retreatment section Cason

Dump is now reported under Crown.

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

Year ended June 30,

2010               2009

2008

Production

Underground Operations

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

-                  202

334

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

-               0.094

0.170

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

-             18,935

56,812

Results of Underground Operations (R)

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

-            134,043

333,855

Operating cost ('000) ..............................................................................................................

30,788            199,722

330,789

Cash cost per ounce of gold ($)

1

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

-                1,166

796

Total cost per ounce of gold ($) .............................................................................................

-                1,646

1,103

1

Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations.

47

Discontinued Operations
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.

On September 10, 2007, Emperor which held a 100% interest in Tolukuma, announced its intention to divest the Tolukuma

gold mine. On October 22, 2007, we sold our entire interest in Emperor.

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).

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. 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.

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 R355.8 million (A$55.9 million).

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 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 was at the time of disposition capable of processing 18,000 tpm. Cyanide in the residue is neutralized in a detoxification plant
prior to riverine discharge.

48

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 dependent 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).

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 took 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.

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.

Production

Gold production from July 2007 to October 2007 was 13,427 ounces. In fiscal 2007 gold production was 44,181 ounces.

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

Year ended June 30,

2010                       2009

2008

Production

Underground Operations

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

-

-

62

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

-

-

0.22

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

-

-

13,427

Results of Operations (R)

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

-

-

89,235

Operating cost ('000) ................................................................................................

-

-

107,381

Cash cost per ounce of gold ($)

1

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

- -

1,094

Total cost per ounce of gold ($) ...............................................................................

-

-

1,767

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 took 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, was granted an option to acquire Durban Deep’s mine village for R15.0 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.

¹ Cash cost per ounce and total cost per ounce are financial measures of performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations.

49

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 was allocated by the High Court of South Africa for April 25, 2008, but the case was
postponed. A new date has not yet been set. Dino Properties (Pty) has instituted action against the Company seeking to enforce an
agreement of sale of the DRD Village entered into on September 20, 2005, alternatively payment of R195 million which is alleged
to represent the market value of the property. The Company is defending this action; however, the parties have suspended the
pleadings with the possibility of pursuing a settlement of the case.

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

Rehabilitation and other responsibilities like the National Nuclear Regulator Certificate of Registration requirements

have been taken over by DRD (Pty) Ltd, which is owned by Mintails. An official liability transfer in terms of section 58 of the
MRPDA Act has been submitted to the DMR. DRDGOLD retains only the village that has no assessed liability associated with it.
The legal transfer of the liability would be dependent on the DMR's assessment of Mintail's financial capability. DRDGOLD
therefore still has a contingent liability until such legal transfer is affected.

In fiscal 2010, the environmental rehabilitation liabilities reduced from R82.4 million in fiscal 2009 to R19.5 million in

fiscal 2010 as a result of the transfer of liabilities in respect of mining rights over the Durban Deep mining license area which was
disposed of.

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, 2010, is R19.5 million. This has been included in the
provision for environmental rehabilitation, restoration and closure costs on the statement of financial position. A total of R21.8
million has been contributed to the Environmental Trust Fund. This is an irrevocable trust, managed by specific responsible people
who we nominated and who are appointed as trustees by the Master of the High Court of South Africa.

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.

50

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.

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 R8.3 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

Responsibility for the mine, including the environmental rehabilitation liability, has been taken over contractually by

Mintails although the legal transfer thereof would be dependent on the DMR's assessment of Mintail's financial capability.
DRDGOLD therefore still has a contingent liability until such legal transfer is affected. Management of the West Rand Consolidated
Mines' tailings dams have been taken over by Mintails which plans to reprocess them. An EMP for the balance of the area has been
submitted to the DMR as part of the conversion process of ML9/2000. The execution of the conversion is imminent.

In terms of Acid Mine Drainage (AMD) from the Western Basin, a proposal has been submitted to the regulators for an

interim solution whereby the Western Basin water is pumped into the Central Basin. Water from the Central Basin is then pumped
from 400m below surface and partly treated in the ERPM High Density Separation (HDS) plant before being released. The proposal
is based on a Public Private Partnership and will prevent untreated water from polluting the environment until the final sustainable
solution is put in place. In terms of this proposal, DRDGOLD will contribute approximately R13.4 million towards the R218 million
capital required. Final approval is awaited.

In fiscal 2010, the Company transferred the environmental rehabilitation liabilities in respect of mining rights over the West

Wits mining license area which was disposed of. A total of R18.7 million previously contributed to the Environmental Trust Fund has
been impaired as a result of the transfer of the liability.

51

Legal Proceedings

Litigation regarding environmental issues

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

directors for relief under the MPRD Act by the Legal Resources Centre on behalf of the residents of two communities, Davidsonville
and Kagiso, who reside adjacent to tailings deposition sites of the now dormant Durban Roodepoort Deep mine and the West
Witwatersrand mine, respectively. While no financial compensation is sought, the communities are seeking orders for the revision of
the environmental management programmes of both sites, and for the sites to be rehabilitated and closed in accordance with the
standards of the MPRD Act. DRDGOLD has filed its Appearance to Defend and Answering Affidavits in respect of both matters in
the High Court of South Africa. The responsibility rests with the respondent's attorneys to either apply to the High Court for a date of
hearing or file replying affidavits.

Application to reverse the granting of a mining right

In June 2008, DRDGOLD and Durban Roodepoort Deep (Pty) Limited (“DRD”) brought an application in the High Court

of South Africa against Main Reef Crushers CC (MRC) and the Minister of Mineral Resources because inter alia the latter granted
MRC a mining right:

•      in respect of an old waste rock dump which is not regulated by the MPRD Act and therefore the right was unlawfully

granted;

•      over an area on which DRD had already been granted a prospecting right which gives DRD the exclusive right to apply for a

mining right in terms of the MPRD Act; and

•      in respect of which the Environmental Impact Assessment and the Environmental Management Programme submitted by

MRC are fatally defective.

This case was heard by the High Court on September 3, 2009 and postponed sine die. The parties are discussing a possible

settlement of the mater.

Lawsuit by French shareholders

In August 2008, the Company received by post a summons issued in the Tribunal De Grande Instance [District Court] of

Paris by the Association for the Defense of the Shareholders of East Rand (the association) against DRDGOLD SA.

The claim is based on the following allegations:

•      that the members of the Association were shareholders of ERPM;

•      that the non-audited ERPM results of the six-month period from July to December 1998 were misleading regarding the

'healthiness' of ERPM prior to its winding up in 1999;

•       that the 1999 liquidation of ERPM was fraudulently approved by 15% of shareholders who were representatives of the

South African state against the interests of French shareholders; and

•       that the subsequent scheme of arrangement to remove ERPM from liquidation in 1999 was approved by 15% of

shareholders without consultation with French shareholders.

On the basis of these allegations, the association is claiming a payment of 5 million euros for damages, 10 000 euros for

costs and costs of suit. DRDGOLD SA has raised the point that the French Courts lack jurisdiction to hear the matter and also filed its
defenses on the merits of the case.

Legal proceedings relating to an agreement to sell Durban Deep’s mine village

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, was granted an option to acquire Durban Deep’s mine village for R15.0 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. On April
25, 2008 the case was postponed by the High Court.

Dino Properties (Pty) Limited (previously M5) has instituted action against us seeking to enforce an agreement of sale of

Durban Deep’s mine Village entered into on September 20, 2005, or alternatively payment of R195 million which is alleged to
represent the market value of the property. DRDGOLD is defending this action, however, the parties have suspended the pleadings
with the possibility of pursuing a settlement of the case

.

52

Claim for alleged damages at Blyvoor

Duffuel (Pty) Ltd and Paul Frederick Potgieter are suing DRDGOLD, DRDGOLD SA, Blyvoor and the latter's directors for

alleged pollution of peat reserves which they claim to sell to the mushroom industry. The following amounts are claimed against
DRDGOLD, DRDGOLD SA, Blyvoor and the latter's directors:

•   R48,952,000 for loss of peat reserves;

•   R52,006,720 for removal of polluted peat, sealing of water in-flow & importation of unpolluted peat; and

•   R96,000 for importation of clean water for domestic use.

The defendants are defending this action and have also raised an exception on the basis that the claim is vague and

embarrassing, and does not disclose a cause of action; however, the parties have suspended the pleadings with the possibility of
pursuing a settlement of the case.

Competition tribunal case

On September 23, 2002, we and Harmony Gold Mining Company Limited, or Harmony, 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 abused 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 was referred to the Competition Tribunal, who has the authority to overrule the
determination of the commission. On March 27, 2007, the Competition Tribunal delivered its judgment, having 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 July 27, 2007, the parties presented submissions to the Tribunal on the penalty or penalties which the Tribunal may impose

against Mittal. On August 6, 2007, the Competition Tribunal imposed an administrative penalty of R691.8 million against Mittal. Mittal
lodged an appeal in the Competition Appeal Court against the decision of the Tribunal. On May 29, 2009, the Court delivered its
judgment in terms of which the case was remitted to the Tribunal for hearing of oral evidence in relation to the matters canvassed
in the affidavit of one Leon Price, and whether Mittal contravened section 8 (a) of the Competition Act 89 of 1998 by charging
excessive prices for flat steel products to the detriment of its consumers. On September 14, 2009, the Company and Harmony
announced the withdrawal of the complaint following a settlement agreement signed with Mittal. The terms of the settlement
agreement are confidential and will not be made public. The settlement agreement reached represented a satisfactory outcome to
the matter for us.

Provisional Judicial management order for Blyvoor operations

On November 9, 2009 DRDGOLD announced that in a bid to save the Blyvoor mine from liquidation, the company intended

applying to the High Court of South Africa for a provisional judicial management order over the operation. A provisional judicial
management order was granted by the High Court of South Africa on November 10, 2009.

The application, in terms of the provisions of Section 427 of the South African Companies Act, was prompted by Blyvoor’s

inability to continue to sustain losses incurred since April 2009, which were brought about by the following circumstances:

•      a drop in the Rand gold price received between April 1, 2009 and September 30, 2009, due to the strengthening of the Rand

against the US Dollar;

•      extensive damage caused during May 2009 to higher-grade underground production areas at Blyvoor’s No. 5 Shaft by

seismic activity, restoration of which was expected to take until March 2010 to complete;

•      power utility Eskom’s higher winter tariffs, compounded by a 32% price increase effective from July 1, 2009, and the

likelihood of further increases in coming months; and

•      the wage strike by the National Union of Mineworkers, which lasted for almost a month and resulted in the loss of

approximately 8 000 ounces of production.

53

In terms of a provisional judicial management order, the court appointed a judicial manager who has a wide range of powers at his

disposal to take such actions he deems necessary to save the business. These could include giving certain creditors temporary preference
over others and agreeing compromises with creditors without the risk of committing an act of insolvency and thereby exposing the mine to
liquidation. Management believed that provisional judicial management offered the best possible prospect of preventing Blyvoor’s
liquidation and of restoring the operation to profitability, while protecting the interests of all stakeholders of both Blyvoor and DRDGOLD.

On April 13, 2010 the High Court of South Africa agreed to lift the provisional judicial management order. The reasons for the

lifting of the provisional judicial management order were as follows:

•    Blyvoor’s return to profitability;

•    the return of Blyvoor’s trade creditors to normal payment terms;

•    an increase in Blyvoor’s monthly production; and

•    an increase in the Rand gold price.

54

55

5A. OPERATING RESULTS

Business overview

We are a South African gold mining company engaged in underground and surface gold mining, including exploration,

extraction, processing and smelting. We have operations comprising underground and surface retreatment operations, including
the requisite infrastructure and metallurgical processing plants. Our operations are currently located in South Africa. As at June 30,
2010, DRDGOLD's foreign subsidiaries, which were the holding companies for its previously disposed Australasian operations, have
been placed into voluntary liquidation , As at September 30, 2010, the Group has broadened its activities to include initial
exploration activities on a small scale in Zimbabwe.

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 operation, in addition to the surface retreatment operations at Crown

(includes ERPM surface retreatment operations), ERPM (represents only their underground operations), Ergo (which
includes Ergo Mining (Pty) Limited (the Ergo JV) and ErgoGold, formerly the Elsburg Gold Mining Joint Venture)
(“South African Operations”). The comparative information has been adjusted to account for ERPM’s surface operations
included under Crown and for ErgoGold and the Ergo JV being combined into one operation called Ergo. ERPM’s
underground operation has been included under ‘Corporate head-office and all other’ in our financial statements’
operating segments.

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

(“Australian Operations”). 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, which included Tolukuma, to several institutional
investors.

In fiscal 2010 and 2009 the South African Operations accounted for 100% of our total production and profit after tax of

R203.4 million and R110.7 million, respectively. In fiscal 2008, the South African Operations accounted for 96% of our total
production and a profit after tax of R137.0 million, with the Australasian Operations accounting for the remaining 4% of our total
production and a net loss after tax of R81.1 million.

Exploration activities are undertaken in South Africa and we are also exploring gold mining possibilities in Zimbabwe by

conducting small scale exploration activities there.

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 exit from our Australasian
operations in 2008, our strategy has since changed to refocus on our operations in South Africa and in particular on the expansion
of our surface retreatment operations. A large portion of the proceeds we received from the disposal of our Australasian operations
have been utilized during fiscal 2009 and fiscal 2010 to expand our retreatment of surface tailings to recover gold. Our new
strategy for the short and medium term is to enhance shareholders’ value by reducing risk, controlling costs and taking a
disciplined approach to growth.

In fiscal 2010, revenue from continuing operations was slightly higher than in fiscal 2009. The effect of the higher gold

price was offset by lower gold production, in particular from underground operations due to the lower grades recovered as a result
of the seismic activity at Blyvoor’s underground operation at the end of fiscal 2009. In fiscal 2009 revenue from continuing
operations was slightly higher than in fiscal 2008. The effect of the higher gold price was offset by lower gold production, in
particular from underground due to the closure of ERPM’s underground operation. We had R188.2 million in cash and cash
equivalents as at June 30, 2010 compared to R352.7 million in cash and cash equivalents as at June 30, 2009. The decrease was
primarily a result of capital expenditure incurred to expand our retreatment of surface tailings to recover gold. We are able to fund
our short- and medium term projects from cash and borrowing facilities.

As at June 30, 2010, we had Ore Reserves of approximately 6.0 million ounces, compared to 5.2 million ounces as at

June 30, 2009 and 4.5 million ounces as at June 30, 2008. The increase from fiscal 2009 to fiscal 2010 was mainly as a result of
the higher gold price used in the Ore Reserves calculation together with the expected increase in Crown’s deposition capacity as a
result of the construction of the Crown/Ergo pipeline linking Crown to Ergo’s Brakpan deposition site. The increase from fiscal
2008 to fiscal 2009 was mainly due to the inclusion of the Elsburg tailings, which belong to ERPM and form part of the Ergo
operation.

56

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 dollars and rands;

•      The production 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

particularly in South Africa.

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 jewelry demand, expectations with respect to the rate of inflation, the strength of the dollar (the currency in which
the price of gold is generally quoted) and of other currencies, interest rates, actual or expected gold sales by central banks, forward
sales by producers, global or regional political or economic events, and production and cost levels in major gold-producing
regions such as South Africa. In addition, the price of gold sometimes is subject to rapid short-term changes because of
speculative activities. The demand for and supply of gold may affect gold prices, but not necessarily in the same manner that
supply and demand affect the prices of other commodities. The supply of gold consists of a combination of new production from
mining and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial
organizations and private individuals. As a general rule we sell the gold produced at market prices to obtain the maximum benefit
from prevailing gold prices.

The following table indicates the movement in the dollar gold spot price for the 2010, 2009 and 2008 fiscal years:

2010 fiscal year

2009 fiscal year

% change

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

$935 per ounce

$930 per ounce

1%

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

$1,244 per ounce                       $935 per ounce                         33%

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

$909 per ounce

$713 per ounce

27%

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

$1,261 per ounce

$989 per ounce

28%

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

$1,092 per ounce

$873 per ounce

25%

2009 fiscal year

2008 fiscal year

% change

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

$930 per ounce

$651 per ounce

43%

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

$935 per ounce

$930 per ounce

1%

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

$713 per ounce

$648 per ounce

10%

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

$989 per ounce

$1,011 per ounce

-2%

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

$873 per ounce

$821 per ounce

6%

2008 fiscal year

2007 fiscal year

% change

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

$651 per ounce

$599 per ounce

9%

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

$930 per ounce

$651 per ounce

43%

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

$648 per ounce

$561 per ounce

16%

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

$1,011 per ounce

$691 per ounce

46%

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

$821 per ounce

$638 per ounce

29%

A significant upward trend in the dollar gold price has been noted over the past five fiscal years. Our production has been

sourced from our South African Operations and, until fiscal 2008, our Australasian Operations as well. As a result, the impact of
movements in relevant exchange rates during those five fiscal years, has been significant on our operating results. The average
gold price in rand and Australian dollars has fluctuated as follows:

•

Rand gold price (based on average prices for the year) increased from R6,003 per ounce in fiscal 2008 (a 30%
increase from fiscal 2007), to R7,910 per ounce in fiscal 2009 (a 32% increase from fiscal 2008) and R8,309 per
ounce in 2010 (a 5% increase from fiscal 2009).

•

Australian gold price (based on average prices for the year) increased from A$812 per ounce in fiscal 2007 to
A$914 per ounce in fiscal 2008 (a 13% increase from fiscal 2007).

Based on our forecast gold price of R304,761 per kilogram for fiscal 2011, a 10% increase in the rand gold price received

will increase our forecast profit after taxation by R276.8 million and a 10% decrease in the rand gold price received will decrease
our profit after taxation by R276.8 million.