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, 2014

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)

Anthon Meyer, Acting Chief Financial Officer, Tel. no. +27 11 470 2600, Email anthon.meyer@drdgold.com

Francois Bouwer, Group Financial Accountant, Tel. no. +27 11 470 2600, Email francois.bouwer@drdgold.com

50 Constantia Boulevard, Constantia Kloof Ext 28, Roodepoort, 1709, South Africa

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

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 New York Stock Exchange, Inc.

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, 2014 the Registrant had outstanding 385,383,767 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

If this report is an annual report or transition report, 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

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the

registrant has elected to follow. Item 17    Item 18

If this is an annual report, 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

......................................................................................................................................................... 20

4C.

Organizational

Structure

................................................................................................................................................ 29

4D.

Property, Plant And Equipment ................................................................................................................................... 29

ITEM 4A.

UNRESOLVED STAFF COMMENTS ....................................................................................................................... 42

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS .......................................................................... . ... 43

5A.

Operating Results ........................................................................................................................................................ 44

5B.

Liquidity

And

Capital

Resources

................................................................................................................................... 63

5C.

Research And Development, Patents And Licenses, Etc ............................................................................................. 65

5D.

Trend

Information

.......................................................................................................................................................... 65

5E.

Off-Balance Sheet Arrangements ..................................................................................................................................65

5F.

Tabular Disclosure Of Contractual Obligations ............................................................................................................66

5G.

Safe

Harbor ................................................................................................................................................................... 66

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES ..................................................................... . ........ . .66

6A.

Directors And Senior Management ...............................................................................................................................66

6B.

Compensation ............................................................................................................................................................... 68

6C.

Board

Practices

............................................................................................................................................................... 70

6D.

Employees

..................................................................................................................................................................... 75

6E.

Share Ownership

............................................................................................................................................................ 77

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS ............................................................... 79

7A.

Major

Shareholders

......................................................................................................................................................... 79

7B.

Related

Party

Transactions

.............................................................................................................................................. 80

7C.

Interests Of Experts And Counsel ................................................................................................................................ 81

ITEM 8.

FINANCIAL INFORMATION .............................................................................................................................. . ..... 82

8A.

Consolidated statements And Other Financial Information ......................................................................................... 82

8B.

Significant

Changes

........................................................................................................................................................ 82

ITEM 9.

THE OFFER AND LISTING ....................................................................................................................................... 82

9A.

Offer And Listing Details ............................................................................................................................................. 82

9B.

Plan

Of

Distribution

........................................................................................................................................................ 84

9C.

Markets

.......................................................................................................................................................................... 84

9D.

Selling

Shareholders

....................................................................................................................................................... 84

9E.

Dilution..........................................................................................................................................................................84

9F.

Expenses Of The Issue ................................................................................................................................................. 84

ITEM 10.

ADDITIONAL INFORMATION ............................................................................................................................. . ... 84

10A.

Share

Capital

.................................................................................................................................................................. 84

10B.

Memorandum of Incorporation .................................................................................................................................... 84

10C.

Material

Contracts

.......................................................................................................................................................... 87

10D.

Exchange

Controls

......................................................................................................................................................... 88

10E.

Taxation

........................................................................................................................................................................ 90

10F.

Dividends And Paying Agents .....................................................................................................................................94

10G.

Statement By Experts .................................................................................................................................................. 94

10H.

Documents

On

Display

.................................................................................................................................................. 94

10I.

Subsidiary

Information

.................................................................................................................................................. 94

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ............................................ 95

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES .......................................................... 96

12A.

Debt Securities ............................................................................................................................................................ 96

12B.

Warrants and Rights .................................................................................................................................................... 96

12C.

Other Securities .......................................................................................................................................................... .96

12D

American Depositary Shares ....................................................................................................................................... 96

TABLE OF CONTENTS

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES ...................................................................... 97

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS ....... 97

ITEM 15.

CONTROLS AND PROCEDURES ............................................................................................................................ 97

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT .......................................................................................................... 98

ITEM 16B.

CODE OF ETHICS ...................................................................................................................................................... 98

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES .......................................................................................... . .. 98

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES ............................................ 99

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS ...................... 99

ITEM 16F

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT ............................................................................. 99

ITEM 16G.

CORPORATE GOVERNANCE .................................................................................................................................. 99

ITEM 16H.

MINE SAFETY DISCLOSURES ................................................................................................................................ 100

PART III

ITEM 17.

FINANCIAL STATEMENTS ...................................................................................................................................... 100

ITEM 18.

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

F1

ITEM 19.

EXHIBITS ..................................................................................................................................................................... 101

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 issued by the
International Accounting Standards Board (IASB) for the financial years ended June 30, 2014, 2013 and 2012. All references to
“dollars” or “$” herein are to United States Dollars and references to “rand” or “R” are to South African Rands.

Our consolidated financial statements included in this Annual Report are prepared in accordance with IFRS as issued by

the IASB. All financial information, except as otherwise noted is 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

Annual Report 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 11.3055 per $1.00, which was the noon buying rate in New
York City on September 30, 2014.

In this Annual Report we present certain non-IFRS financial measures such as the financial items “cash operating costs

per kilogram”, “all-in sustaining costs per kilogram” and “all-in costs per kilogram” which have been determined using industry
guidelines promulgated by the World Gold Council and “capital expenditure (cash)”, which we use to determine costs associated
with producing gold, cash generating capacities of the mines and to monitor performance of our mining operations. 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 World Gold Council has
provided definitions for the calculation of cash operating costs, the calculation of cash operating costs per kilogram, all-in
sustaining costs and all-in 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 Results - Cash operating costs, all-in sustaining costs and all-in costs per kilogram-
Reconciliation of cash operating costs per kilogram, all-in sustaining costs per kilogram, all-in costs per kilogram and capital
expenditure (cash).”

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:

· estimated future throughput capacity and production;
· expected trends in our gold production as well as the demand for and the price of gold;
· our anticipated commitments;
· our ability to fund our operations in the next 12 months; and
· estimated production costs, cash operating costs per ounce, all-in sustaining costs per ounce and all-in 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 South Africa;
· regulatory developments adverse to us or difficulties in maintaining necessary licenses or other governmental approvals;
· changes in our competitive position;
· changes in business strategy;
· changes in our gold production as well as the demand for and the price of gold;
· 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

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

Imperial units of measure and metric equivalents

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

Metric

Imperial

Imperial

Metric

1 metric tonne

1.10229 short tons

1 short ton

0.9072 metric tonnes

1 kilogram

2.20458 pounds

1 pound

0.4536 kilograms

1 gram

0.03215 troy ounces

1 troy ounce

31.10353 grams

1 kilometer

0.62150 miles

1 mile

1.609 kilometres

1 meter

3.28084 feet

1 foot

0.3048 metres

1 liter

0.26420 gallons

1 gallon

3.785 liters

1 hectare

2.47097 acres

1 acre

0.4047 hectares

1 centimeter

0.39370 inches

1 inch

2.54 centimetres

1 gram/tonne

0.0292 ounces/ton

1 ounce/ton

34.28 grams/tonnes

0 degree Celsius

32 degrees Fahrenheit

0 degrees Fahrenheit

- 18 degrees Celsius

Glossary of Terms and Explanations

All-in sustaining costs per
kilogram ..................................

All-in sustaining costs is a measure on which guidance were provided by the World Gold Council
and include cash operating costs of production plus, on-site general and administrative costs,
royalties and production taxes, sustaining capital, sustaining exploration, the accretion of
rehabilitation costs, but excludes depreciation, retrenchment costs, finance costs, depletion and
amortization, reclamation and closure costs. All-in sustaining costs per kilogram are calculated by
dividing all-in sustaining costs by kilograms of gold produced. This is a non-IFRS financial measure
and should not be considered a substitute measure of costs and expenses reported by us in accordance
with IFRS.

All-in costs per kilogram ......All-in costs is a measure on which guidance were provided by the World Gold Council and include

total operating costs, plus all-in sustaining costs, non-sustaining capital costs relating to projects,
retrenchment costs, capital recoupment relating to non-sustaining capital, ongoing rehabilitation
expenditure, and non-operating costs, but exclude taxation, minority interest, finance costs, profit or
loss from associates and the cumulative effect of accounting adjustments. All-in costs per kilogram
are calculated by dividing all-in costs by kilograms of gold produced. This is a non-IFRS financial
measure and should not be considered a substitute measure of costs and expenses reported by us in
accordance with IFRS.

Assaying ...............................The chemical testing process of rock samples to determine mineral content.
$/oz ........................................US dollar per ounce.
Care and maintenance ............Cease active mining activity at a shaft, but continue to incur costs to ensure that the Ore Reserves are

open, serviceable and legally compliant.

Cash operating costs per
kilogram ..................................

Cash operating costs are operating costs incurred directly in the production of gold and include labor
costs, contractor and other related costs, inventory costs and electricity costs. Cash operating costs per
kilogram are calculated by dividing cash operating costs by kilograms of gold produced. Cash
operating costs per kilogram have been calculated on a consistent basis for all periods presented. This
is a non-IFRS financial measure and should not be considered a substitute measure of costs and
expenses reported by us in accordance with IFRS.

Conglomerate .........................A coarse-grained sedimentary rock consisting of rounded or sub-rounded pebbles.
Cut-off grade ..........................The minimum in-situ grade of ore blocks for which the cash operating costs per ounce, excluding

overhead costs, are equal to a projected gold price per ounce.

Depletion ...............................The decrease in the quantity of ore in a deposit or property resulting from extraction or production.
Deposition .............................Deposition is the geological process by which material is added to a landform or land mass. Fluids

such as wind and water, as well as sediment flowing via gravity, transport previously eroded
sediment, which, at the loss of enough kinetic energy in the fluid, is deposited, building up layers of
sediment. Deposition occurs when the forces responsible for sediment transportation are no longer
sufficient to overcome the forces of particle weight and friction, creating a resistance to motion.

3

Dilution ................................ Broken rock entering the ore flow at zero or minimal grade and therefore diluting the gold content per

ton.

Doré ..................................... Unrefined gold and silver bullion bars consisting of approximately 90% precious metals which will be

further refined to almost pure metal.

Grade .................................... The amount of gold contained within auriferous material generally expressed in ounces per ton or

grams per ton of ore.

g/t ......................................... Grams per ton.
Horizon ................................ A plane indicating a particular position in a stratigraphic sequence. This may be a theoretical surface

with no thickness or a distinctive bed.

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.
Mt .......................................... Million tons.
Opening up ............................ The potential that previously abandoned shafts and mining or developed areas, have to be reopened

and mined.

Ore ........................................ A mixture of valuable and worthless materials from which the extraction of at least one mineral is

technically and economically viable.

Ore Reserves ....................... Attributable total ore reserves of subsidiaries.
Pay-limit .............................. The minimum in-situ grade of ore blocks or sites for which cash operating costs, including all

overhead costs, are equal to a projected gold price per ounce.

Proven Ore Reserves ........... Reserves for which (a) the quantity is computed from dimensions revealed in outcrops, trenches,

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

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

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

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

of gold.

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

time of the reserve determination.

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

was transported from a source to a site of deposition.

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

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

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

recovered.

Sloughing ............................. The localized failure of part of the slimes dam wall caused by a buildup of water within the dam.
Stope .................................... Underground production working area on the Ore Horizon.
Stoping ................................. The removal of the wanted ore from an underground mine leaving behind an open space known as a

stope. Stoping is used when the country rock is sufficiently strong not to cave into the stope, although
in most cases artificial support is also provided.

t’000 ..................................... Tons in thousands.
Tailings ................................ Finely ground rock from which valuable minerals have been extracted by milling, or any waste rock,

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

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

extracted.

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

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

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

ore.

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,

2014

1

2014

2013²

Restated

2012²

Restated

2011²

Restated

2010²

$’000

R’000

R’000

R’000

R’000

R’000

Profit or loss Data

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

160,049

1,809,434

2,076,496

3,004,264

2,565,319

1,990,522

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

(1,110)

(12,547)

184,704

367,712

(413,971)

35,485

Results from operating activities from

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

(1,110)

(12,547)

184,704

240,151

112,634

61,270

(Loss)/profit for the year attributable to

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

(4,052)

(45,808)

49,420

294,313

(287,915)

207,815

(Loss)/profit for the year attributable to

equity owners of the parent from
continuing operations ....................................

(4,052)

(45,808)

49,420

202,939

67,070

186,553

Per Share Data

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

(1)

(12)

13

77

(75)

55

Basic (loss)/earnings per share - continuing

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

(1)

(12)

13

53

17

49

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

(1)

(12)

13

77

(75)

55

Diluted (loss)/earnings per share -

continuing operations (cents) .......................

(1)

(12)

13

53

17

49

Dividends proposed per share (ZAR cents) ....

2

28.0

10.0

7.5

5.0

Dividends proposed per ADS (USD cents) .....

1.6

28.2

12.1

9.5

7.3

Average exchange rate (USD1:ZAR)

1

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

10.42

8.92

7.77

6.95

7.56

Number of shares issued as at June 30 ............ 385,383,767

385,383,767

385,383,767

385,383,767

384,884,379

384,884,379

Statement of financial position data

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

215,890

2,440,746

2,669,000

2,489,006

2,288,661

2,580,292

Equity (Net assets) ............................................

131,017

1,481,211

1,643,672

1,631,763

1,219,166

1,649,961

Ordinary share capital .......................................

361,636³

4,088,474³

4,089,287³

4,089,117³

4,132,604

4,133,318

Month

2014

2014

2014

2014

2014

2014

September

August

July

June

May

April

Exchange Rate Data

Average (USD1:ZAR) .......................................

10.98

10.65

10.66

10.67

10.37

10.51

High (USD1:ZAR) .............................................

11.35

10.83

10.84

10.86

10.59

10.68

Low (USD1:ZAR) .............................................

10.60

10.52

10.46

10.53

10.22

10.31

1

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,

2014 of R 11.3055 per $1.00, or the annual average as noted. You should not view such translations as a representation that such amounts
represent actual Dollar amounts. All other translations in this document are based on exchanges rates quoted by local financial service providers.
² Comparatives have been restated for the reclassification of Blyvooruitzicht Gold Mining Company Limited (Blyvoor) as a discontinued
operation (disposed June 1, 2012) and the adoption of newly effective accounting policies where relevant.
³ Ordinary share capital is stated after the deduction of R44.2 million (2013: R44.4 million and 2012: R44.8 million) share capital relating to
treasury shares held within the Group.

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 results of operation and

financial condition have 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 operations any sustained decline in the market price of gold, would adversely affect us, and any decline in
the price of gold below the cost of production could result in the closure of some or all of our operations which would result in
significant costs and expenditure, for example, incurring retrenchment costs earlier than expected. Accordingly, any sustained
decline in the price of gold 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/or the rand should strengthen against the dollar, this would adversely affect us and we may
experience losses, and if these changes result in revenue below our cost of production and remain at such levels for any sustained
period, we may be forced to curtail or suspend some or all of our operations. 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. In fiscal 2014, 2013,and 2012 the rand weakened against the

dollar by 7.2%, 19.3% and 21.1% respectively (based on exchange rates at June 30 of each year). From December 2001, when the
exchange rate reached R13.44 = $1.00, the rand has appreciated by 21.3%. against the dollar to R10.58= $1.00 at June 30, 2014
(based on closing rates). At September 30, 2014 the rand traded at R 11.28 = $1.00 (based on closing rates), a 6.6% weakening
relative to the Dollar from June 30, 2014.

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

in a decrease in our profitability. In fiscal 2014, 2013 and 2012 all of our production was from South Africa providing significant
exposure to the strengthening of the rand and a decrease in profitability. If the rand were to appreciate against the dollar for a
continued time, our operations could experience a reduction in cash flow and profitability and this would 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. Higher inflation in South Africa may result in an increase in

our future operational costs in rand, unless such inflation is accompanied by a concurrent devaluation of the rand against the dollar or
an increase in the dollar price of gold. Significantly higher and sustained inflation in the future, with a consequent increase in
operational costs could have a material adverse effect on our results of operations and our financial condition, and could result in
operations being discontinued or reduced or rationalized.

7

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

We incurred a net loss of R54.7 million for fiscal 2014 and achieved a net profit of R97.7 million for fiscal 2013 and a net

profit of R374.8 million for fiscal 2012.

The loss in fiscal 2014 was largely due to a 5.5% drop in the average rand gold price received amounting to R432,775 per

kilogram and a decline of 9.2 % in gold produced from continuing operations. It also includes an impairment of R56.6 million
relating to R12.4 million against property, plant and equipment and R46.9 million against available-for-sale financial assets which
was offset by a reversal of an impairment of R2.7 million on equity accounted investments.

The profit in fiscal 2013 was largely due to a 9% increase in the average rand gold price received amounting to R458,084

per kilogram and an 8% increase in gold produced from continuing operations, which was partly offset by an impairment of R187.9
million relating to R61.0 million against property, plant and equipment, R101.3 million against available-for-sale financial assets and
R25.6 million against investments. It also included a share of losses of equity accounted investment of R50.1 million relating
impairments of exploration assets recognized at Chizim Gold level.

The profit in fiscal 2012 was largely due to a 36% increase in the average rand gold price received amounting to R418,538

per kilogram.

Our profits and cash flows of our operations are directly exposed to the gold price, strength of the rand and higher input

costs as we do not hedge.

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

control and cannot guarantee that alternative financing would be available.

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

volumes, recovered grades and costs. 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
permitted under the terms of our existing financing arrangements, or would be available on acceptable terms, or at all. 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 South Africa and any new regions that we identify for future growth opportunities. Our Ore Reserves for
fiscal 2014 decreased by 10.0% due to ongoing mining activities, in 2013 it decreased by 8%, also in main due to depletion from
mining activities. Our Ore Reserves for fiscal 2012 decreased by 75%, mainly due to the disposal of Blyvoor which represented
73% of our Ore Reserves on June 30, 2011.

Any new or ongoing exploration programs may not 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. In addition, if
we are unable to identify Ore Reserves that have reasonable prospects for economic extraction while maintaining sufficient controls
on production and other costs, this will have a material influence on the future viability of our operations.

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 were effective for the 2014, 2013 and 2012 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.”

8

Single point of failure due to one operating segment

With the disposal of Blyvoor on June 1, 2012, we currently have only one operating segment, namely Ergo. The various

processing plants, pump stations and deposition site of this business are linked through pipeline infrastructure. The Ergo plant is now
our major processing plant and we have one deposition site. The pipeline infrastructure relating to the Ergo plant and Brakpan
Tailings Storage Facility ("Brakpan TSF") are exposed to numerous risks, including operational down time due to unplanned
maintenance, destruction of infrastructure, spillages, higher than expected operating costs, or lower than expected production each of
which could have a material adverse effect on our business, operating results and financial condition.

Increased production costs could have an adverse effect on our results of operations.

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

provide for further increases in our production costs. Production costs are affected by, among other things:

· labor stability, lack of productivity and increases in labor costs;
· increases in electricity and water prices;
· increases in crude oil and steel prices;
· unforeseen changes in ore grades and recoveries;
· unexpected changes in the quality or quantity of reserves;
· technical production issues;
· environmental and industrial accidents;
· gold theft;
· environmental factors; and
· pollution.

The majority of our production costs consist of reagents, labor, steel, electricity, water, fuels, lubricants and other

oil and petroleum based products. The production costs incurred at our operations have in the past, and could in the future, increase at
rates in excess of our annual expected inflation rate 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.
Ergo and ERPM signed a two year wage settlement agreement with effect from July 1, 2013, with the National Union of
Mineworkers of South Africa, or NUMSA and United Association of South Africa, or UASA, on October 9, 2013, which provides
for average annual compensation increases in year one of 10% for categories 4 – 5, 9% for categories 6 – 7 and 8% for categories
8 – 15; and in year two 8% for categories 4 – 5 and 7.5% for categories 6 – 15. On September 4, 2014, Ergo and ERPM extended
the two year wage settlement agreement with effect from July 1, 2015 to June 30, 2016, with NUMSA and UASA, which provides
for average annual compensation increases in year one of 10% for categories 4 – 5, 9% for categories 6 – 7 and 8% for categories
8 – 15.

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. Increases in steel, electricity or water prices 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. A wage strike by NUMSA during
July 2014 caused a delay in the delivery of certain steel products to our operations.

The emergence of a new labor union, the Association of Mineworkers and Construction Union, or AMCU and labor unrest

driven by them in South Africa during 2013 and 2014 in the gold and platinum industry have resulted in extended strikes. In certain
instances wage settlements that were reached with other representative labor unions were challenged by AMCU and increased
uncertainty in the labor market resulted. As at September 30, 2014 AMCU had no representation at any of our operations nor have
there been demands for recognition. We cannot guarantee that no such demands will be made in the future.

The costs of fuels, lubricants and other oil and petroleum based products have increased in fiscal 2014 as a result of the

weakening of the exchange rate with the cost of crude oil in global markets remaining relatively flat to slightly lower. In the event
that crude oil prices increase, this could have a significant impact on our production costs.

Our initiatives to reduce costs, such as reducing our labor force, a reduction of the corporate overhead, negotiating lower

price increases for consumables and cost controls, may not be sufficient to offset the increases affecting our operations and could
adversely 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. Failure to comply with environmental laws or delays in obtaining, or failures to obtain

9

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 of compliance, resulting in a material adverse effect on our profitability.

               We have incurred, and expect to incur 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 R471.7 million which is included in our
statement of financial position as at June 30, 2014 (Consisting of provision for environmental rehabilitation: R451.2 million and
liabilities held-for-sale R20.5 million). However, the ultimate amount of rehabilitation costs may in the future exceed the current
estimates due to factors beyond our control, such as changing legislation, higher than expected cost increases, or unidentified
rehabilitation costs. We fund these environmental rehabilitation costs by making contributions over the life of the mine to
environmental trust funds or funds held in insurance instruments established for our operations. If any of the operations are
prematurely closed, the rehabilitation funds may be insufficient to meet all the rehabilitation obligations of those operations. 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 prosecution,
litigation and potentially significant liabilities.

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

If the rate of rise of water is not controlled, water from our discontinued and now abandoned underground mining areas

could potentially rise and come into contact with naturally occurring underground water or decant into surrounding underground
mining areas and could ultimately also rise to surface. Progressive flooding of these abandoned underground mining areas and
surrounding underground mining areas could eventually cause the discharge of polluted water to the surface and to local water
sources.

Should underground water levels not reach a natural subterranean equilibrium, and in the event that underground water rises

to the surface, we may face, together with all other mining companies in those areas, 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.

Damage to tailings dams and excessive maintenance and rehabilitation costs could result in lower production and health,

safety and environmental liabilities.

Our tailings facilities 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 by our employees to adhere to the codes of practice and natural disasters such
as excessive rainfall, any of which could force us to stop or limit operations. In addition, the dams could overflow and the health and
safety of our employees and communities living around these dams could be jeopardized. In the event of damage to our tailings
facilities, our operations will be adversely affected and this in turn could have a material adverse effect on our business, operating
results and financial condition.

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

The business of gold mining is exposed to numerous risks and events, the occurrence of which may result in the death of, or

personal injury, to employees. Regrettably one person died in a work-related incident during fiscal 2012. The employee died after he
lit a fire in a closed shelter while on duty. 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. These incidents could lead to mine operations being halted and
that will increase our unit production 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 approximately R6.4 billion. Claims for each and every event are limited by the insurers to R500 million.
Business interruption is only covered from the time the loss actually occurs and is subject to time and amount deductibles that vary
between categories.

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, this could have a material adverse effect on our business, operating results and financial condition.

10

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 the positions of Chief Executive Officer and 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, 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 delay the execution of our business plans, which may result in decreased production,
increased costs and decreased profitability.

Our flotation and fine-grind (FFG) project faces the risk of a start-up project.

Our flotation and fine-grind project is designed to improve extraction efficiencies which are derived from the separation of

gold contained within the sulfides of the tailings material by subjecting the treated material to a flotation circuit, further regrinding
and a leach circuit. This project was commissioned during the second and third quarters of fiscal 2014 and came into full operation in
the third quarter.

               Production was temporarily suspended on 2 April 2014 due to unsatisfactory gold recoveries and low carbon absorption efficiencies.
The established Low Grade Section was brought back to steady state and gold production stabilized during the last quarter of
FY2014. The main causes for the unsatisfactory recoveries included carbon management in the Low Grade Section, thickener
availability and management of the water balance. Apart from rectifying the main causes, the operational team also implemented a
twin streaming process by isolating the Crown and City material from the main Elsburg material. By implementing this change the
gold content in the individual feed supply streams can be measured before the product goes into the leach tanks. By comparing these
assays with the final recoveries, management will be able to identify and correct, much earlier, any possible negative impacts whilst it
will also improve the allocation of gold from different sources. A number of smaller engineering upgrades are also being made during
this “time-out” period.

In late August 2014 the FFG was restarted and currently treats one third of the Ergo plant throughput. Once the FFG shows steady,
acceptable recoveries, the remainder of the Ergo plant throughput will also be treated through the FFG. Provided that these required
levels are achieved, we plan to put the full Ergo throughput through the FFG by the end of the 1st quarter of calendar 2015.

The flotation and fine-grind project remains exposed to numerous risks associated with similar start-up projects, including
operational down time due to unplanned maintenance, destruction of infrastructure, spillages, higher than expected operating costs, or
lower than expected production which could have a material adverse effect on our business, operating results and financial condition.

Conditions precedent for completion of the Blyvoor sale were not met before the due date.

The sale agreement entered into in connection with the disposal of Blyvoor consists of two parts, being Part A and Part B.

See Item 5A.: “Operating Results - Recent developments” for a more detailed discussion. The conditions precedent for Part A were
satisfied and Part A was completed on June 1, 2012. However, the Part B conditions for the mining right conversion did not occur
prior to the deadline. On July 30, 2013, Village Main Reef Limited ("Village") suspended financial assistance to Blyvoor and on
August 6, 2013, Blyvoor was placed into provisional liquidation. A legal dispute has now ensued to test whether the conditions for
Part B were not met because of a breach of the agreement on the part of Village Main Reef Limited. Pending the outcome of the
above (which will confirm the ownership of the shares), the 20,000,000 ordinary shares in Village remained in escrow.

11

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 profitability may be negatively impacted by a decline in the gold price and we incur losses when 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 future outlook for the global economy remains uncertain. Growth generally is still low and the demand for resources is

down from previous highs. During fiscal 2014 the gold price came off a high of U$1,426 per ounce to a low of U$1,192. The
uncertainty in the outlook of resources generally and of gold in particular resulted in 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 still not shown signs of sustained recovery - consumer sentiment remains bearish,
unemployment remains high, economic growth is marginal and corporate earnings are uncertain and volatile. To the extent that the
current economic climate 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.

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 gold exploration programs, including some of ours, do not result in
the discovery of mineralization and any mineralization discovered may not be of sufficient quantity or quality to be mined profitably.
If we discover a viable deposit, it usually takes several years from the initial phases of exploration until production is possible.
During this time, the economic feasibility of production may change.

Moreover, we rely on the evaluations of professional geologists, geophysicists, and engineers for estimates in

determining whether to commence or continue mining. These estimates generally rely on scientific and economic assumptions,
which in some instances may not be correct, and could result in the expenditure of substantial amounts of money on a deposit
before it can be determined with any degree of accuracy whether or not the deposit contains economically recoverable
mineralization. Uncertainties as to the metallurgical recovery of any gold discovered may not warrant mining on the basis of
available technology.

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. Our business focuses mainly on the extraction of
gold from tailings, which is a volume driven exercise. Only significant deposits within close proximity of services and
infrastructure that contain adequate gold content to justify the significant capital investment associated with plant, reclamation and
deposition infrastructure are suitable for exploitation in terms of our model. There is a limited supply of these deposits which may
inhibit growth prospect, especially in a declining gold price environment.

12

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 operations. 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 therefore likely to be impaired.

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 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 reserve estimates 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 ability to reclaim our Ore Reserves, at
the required rate, such as an interruption or reduction in the supply of electricity or a shortage of water may have the effect that we are
unable to achieve critical mass, which may render the Ore Reserve, or parts of the Ore Reserve no longer feasible, which could
negatively affect production rate and 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 is 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 and reclamation 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:

· environmental hazards and pollution, including dust generation, toxic chemicals, discharge of metals, pollutants, radioactive
   materials and other hazardous material into the air and water;
· flooding, landslides, sinkhole formation, ground subsidence, ground and surface water pollution, and waterway
   contamination;
· a decrease in labor productivity due to labor disruptions, work stoppages, disease, slowdowns or labor strikes;
· unexpected decline of ore grade;
· metallurgical conditions and gold recovery;
· failure of unproven or evolving technologies;
· mechanical failure or breakdowns and ageing infrastructure;
· energy and electrical power supply interruptions;
· availability of water;
· injuries to employees or fatalities resulting from falls from heights and accidents relating to mobile machinery or
   electrocution;
· activities of illegal or artisanal miners;
· material and equipment availability;
· legal and regulatory restrictions and changes to such restrictions;
· social or community disputes or interventions;
· accidents caused from the collapse of tailings dams;
· pipeline failures and spillages;
· safety-related stoppages; and
· corruption, fraud and theft including gold bullion theft.

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 in South Africa and all of our operations are currently in South Africa. As a result, political and

economic risks relating to South Africa could have a significant effect on 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 may impede fixed inward investment into South Africa and cause emigration of skilled workers. As
a result, we may have difficulties retaining qualified employees.

Inflation can adversely affect us.

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. The inflation rate in South Africa is relatively high compared to developed, industrialized countries. As of June 2014, the
Consumer Price Inflation Index, or CPI, stood at 6.6% compared to 5.5% in June 2013 which remained flat at 5.5% from June 2012.
The inflation rate slowed to 5.9% as at September 30, 2014. 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.

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 insufficient generating capacity, owing to poor maintenance and lagging capital infrastructure investment, South Africa
has faced significant disruptions in electricity supply in the past and Eskom has warned that the country could continue to face
disruptions in electrical power supply in the foreseeable future. Whilst Eskom did manage to contain the number and severity of
power supply stoppages to the extent of not having a material impact on our production, the country’s current reserve capacity
remains insufficient and the risk of electricity stoppages may continue through 2014. Supply interruptions due to cable theft is also on
the increase and may pose a significant risk to the operations.

The group has installed auxiliary emergency units at its plant to prevent the tripping of thickeners and entered into an

agreement for the supply of temporary power generation equipment and services during fiscal 2014 to drive certain key
installations associated with the disposal of tailings. The lease term will commence during October 2014 for a term of five years at
a fixed monthly payment. The group has the option to acquire the equipment at the termination of the lease. There is no assurance
that the measures will be sufficient to mitigate the risk of power stoppages.

Electricity tariffs increased as follows: from April 1, 2012 an average tariff increase of 16.7%, from April 1, 2013 an

average tariff increase of 8.0% and from April 1, 2014 an average tariff increase of 10.79%. These increases have had an adverse
affect on our production costs and future increases of this nature could have a material adverse effect on our business, operating
results and financial condition.

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, and

occupational lung diseases (OLD) and tuberculosis (TB). We provide occupational health services to our employees, we provide
training and protective gear and continue to improve preventive occupational hygiene initiatives. The costs associated with providing
such occupational health services could increase significantly.

As a result of the South African Constitutional Court decision permitting individuals employed as miners with occupational

lung diseases to sue their current or former employers for damages outside the statutory compensation scheme, we could be subject to
claims against us from previous or current employees, including a potential class action or similar group claim. In January 2013,
DRDGOLD, ERPM and 23 other mining companies were served with a court application for a class action issued in the South
Gauteng High Court by alleged former mineworkers and dependents of deceased mineworkers. In the pending application, the
applicants allege that DRDGOLD, ERPM and other mining companies conducted underground mining operations in such a negligent
manner that resulted in the former mineworkers contracting silicosis and other related diseases. We will assess all such claims, if and
when filed, on their merits. Liability associated with such claims and expenses of dealing with them could have a material adverse
effect on our business, operating results and financial condition.

14

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

Crime statistics in South Africa indicate an increase in theft. This together with price increases for copper has resulted in the

increased theft of copper cable. Our operations experience high incidents of copper cable theft despite the implementation of security
measures. In addition to the general risk to employees’ lives 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 and theft of bolts used for the pipeline.

Possible scarcity of water may negatively affect our operations.

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 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. 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 adjust production
at these operations.

We entered into a R22 million capital investment programme with the local municipality to source treated sewage water for

our water circuit. This water will be used both to reclaim and carry production materials and also, ultimately, to irrigate rehabilitation
vegetation at a significantly lower cost than that of potable water. In addition, as part of the Heads of agreement signed between
EMO, Ergo, ERPM and Trans-Caledon Tunnel Authority (TCTA) in December 2012, Ergo has the right to purchase up to 30 Ml of
treated water per day from TCTA at cost price for use in its production circuits. There is no assurance that the measures will be
sufficient to alleviate all the water scarcity issues.

Government Regulation

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

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 discretionary and unpredictable on certain issues, including changes in conditions for the issuance of
licenses insofar as social and labor plans are concerned, transformation of the workplace, laws relating to mineral rights,
ownership of mining assets and the rights to prospect and mine, additional taxes on the mining industry and in extreme cases,
nationalization. A change in regulatory or government policies could adversely affect our business.

New order rights obtained under the Mineral and Petroleum Resources Development Act, 2002 may not be equivalent to

our old mining rights.

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.

New order rights obtained under the MPRD Act, are not equivalent to our existing property rights. The area covered by the

new order rights may be reduced by the Department of Mineral Resources, or DMR, 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.

The new order rights will only be transferable subject to the approval of the Minister of Mineral Resources. 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 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. See Item 4B. “Business Overview”.

The implementation of the MPRD Act has resulted 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,
this will 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. As at September 30, 2014, all of our old order mining rights have been converted into new
order rights under the terms of the MPRD Act with only 1 new order right awaiting registration at the Mineral and Petroleum Titles

15

Mining royalties and other taxation reform could have an adverse affect on the business, operating results and financial

condition of our operations.

The Mineral and Petroleum Resources Royalty Act, No.28 of 2008 was enacted on November 21, 2008 and was published

Registration Office of the DMR.

in the South African Government Gazette on November 24, 2008. The Mineral and Petroleum Resources Royalty Act
(Administration), No.29 of 2008, published on November 26, 2008, became 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 taxed entity. The royalty is payable on old
unconverted mining rights and new converted mining rights. Based on a legal opinion the Company obtained, mine dumps created
before the enactment of the MPRD Act fall outside the ambit of this royalty and consequently the Company does not pay any royalty
on any dumps created prior to the MPRD Act. Introduction of further revenue based royalties or any adverse future tax reforms
would have an adverse effect on the business, operating results and financial condition of our operations.

Ring-fencing of unredeemed capital expenditure for South African mining tax purposes could have an adverse affect on

the business, operating results and financial condition of our operations.

The Income Tax Act No 58 of 1962, or the ITA, contains certain ring-fencing provisions in section 36 specifically relating

different mines regarding the deduction of certain capital expenditure and the carry over thereof to subsequent years. After the
restructuring of the surface operations, effective July 1, 2012, Ergo is treated as one taxpaying operation pursuant to the relevant ring-
fencing legislation. In the event that we are unsuccessful in confirming our position or should the South African Receiver of Revenue
have a different interpretation of section 36 of the ITA, it could have an adverse effect on the business, operating results and financial
condition of our operations.

The implementation of carbon or other climate change related to taxes might have a direct or indirect negative cost

impact on our operations.

Climate change is a global problem that requires both a concentrated international response and national efforts to reduce

greenhouse gas, or GHG, emissions. The United Nations Framework Convention on Climate Change is the main global response to
climate change. The associated Kyoto Protocol is an international agreement that classifies countries by their level of industrialization
and commits certain countries to GHG emission reduction targets. Although South Africa is not one of these countries identified, it
ranked among the top 20 countries measured by absolute carbon dioxide emissions. During the 2009 Copenhagen climate change
negotiations, South Africa voluntarily announced that it would act to reduce domestic GHG emissions by 34% by 2020 and 42% by
2025, subject to the availability of adequate financial, technological and other support. The two main economic policy instruments
available for setting a price on carbon and curbing GHG emissions are carbon taxation and emissions trading schemes. In a
discussion paper on carbon taxation by the National Treasury of the South African Government released in June 2013 different
methods of carbon taxation were discussed. The implementation of these carbon taxes have been postponed. Should these taxes be
implemented, they might have a direct or indirect negative cost impact on our operations which could have an adverse effect on the
business, operating results and financial condition.

Failure to comply with the requirements of the Broad Based Socio-Economic Empowerment Charter could have an

adverse affect on our business, operating results and financial condition of our operations.

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

(effective from May 1, 2004), established 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% ownership by
historically disadvantaged South Africans, or HDSA, of its South African mining assets within five years and 26% ownership within
ten years, in each case, 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 market value.

In September 2010, the DMR released amendments to the Mining Charter. The intention behind the amendments to the

Mining Charter was to clarify certain ambiguities and uncertainties which existed under the Mining Charter and to provide more
specific targets. However, there are a number of matters that still require clarification and discussions in respect of interpretations of
the requirements are in progress with the DMR. The goals set by the amendments to the Mining Charter include: minimum 26%
HDSA ownership by March 2015; procurement of a minimum 40% of capital goods, 50% of consumer goods and 70% of services
from Black Economic Empowerment, or BEE, entities by March 2015; minimum 40% HDSA representation at each of executive
management level, senior management level, middle management level, junior management level and core and critical skills levels;
minimum 3% investment of annual payroll in skills training; investment in community development; and attain an occupancy rate of
one person per room in on-site accommodation.

16

When considering applications for the conversion of existing rights, the relevant regulator 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. 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. In addition, we may incur expenses in giving
additional effect to the Mining Charter and the “scorecard”, including costs which we may incur including the risk of losing our
mining rights if we do not comply with the requirements stipulated in facilitating the financing of initiatives towards ownership by
historically disadvantaged persons. Any of the foregoing 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 constituted 17% of our production costs for fiscal 2014, 17% for fiscal 2013 and 32% for fiscal 2012. As of

June 30, 2014, we employed and contracted 2,329 people, of whom approximately 80% 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.

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 could affect production.

During August and September 2012, there have been a number of illegal strikes at several mining companies in South

Africa and events related to these strikes resulted in 45 people being killed. During February to June 2014, the platinum industry had
a wage strike that lasted for five months. Above inflation wage increases and changes to working conditions were agreed to in order
to bring the strike to an end.

Such events at our operations or elsewhere 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

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.

17

Dividend tax, which is a withholding tax, will reduce the amount of dividends received by beneficial owners.

On April 1, 2012, the South African Government replaced Secondary Tax on Companies (then 10%) with a 15%

withholding tax on dividends and other distributions payable to shareholders. Although this may reduce the tax payable by the
Company or our subsidiaries, the withholding tax will reduce the amount of dividends or other distributions received by our
shareholders.

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
of incorporation 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.

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 including in South Africa, upon most of
our directors or officers, including matters arising under United States federal securities laws or applicable United States state
securities laws.

Moreover, it may not be possible for you to enforce against us or the members of our board of directors and executive

officers judgments obtained in courts outside South Africa, including the United States, based on the civil liability provisions of
the securities laws of those countries, including those of the United States. A foreign judgment is not directly enforceable in South
Africa, but constitutes a cause of action which will be enforced by South African courts provided that:

· the court which pronounced the judgment had jurisdiction to entertain the case according to the principles recognized by
   South African law with reference to the jurisdiction of foreign courts;
· the judgment is final and conclusive (that is, it cannot be altered by the court which pronounced it);
· the judgment has not lapsed;
· the recognition and enforcement of the judgment by South African courts would not be contrary to public policy, including
   observance of the rules of natural justice which require that no award is enforceable unless the defendant was duly served
   with documents initiating proceedings, that he was given a fair opportunity to be heard and that he enjoyed the right to be
   legally represented in a free and fair trial before an impartial tribunal;
· the judgment was not obtained by fraudulent means;
· the judgment does not involve the enforcement of a penal or revenue law; and
· the enforcement of the judgment is not otherwise precluded by the provisions of the Protection of Business Act, 1978 (as
   amended), of South Africa.

It is the policy of South African courts to award compensation for the loss or damage actually sustained by the person to

whom the compensation is awarded. Although the award of punitive damages is generally unknown to the South African legal system
that does not mean that such awards are necessarily contrary to public policy. Whether a judgment was contrary to public policy
depends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. South
African courts cannot enter into the merits of a foreign judgment and cannot act as a court of appeal or review over the foreign court.
South African courts will usually implement their own procedural laws and, where an action based on an international contract is
brought before a South African court, the capacity of the parties to the contract will usually be determined in accordance with South
African law. It is doubtful whether an original action based on United States federal securities laws may be brought before South
African courts. A plaintiff who is not resident in South Africa may be required to provide security for costs in the event of
proceedings being initiated in South Africa. Furthermore, the Rules of the High Court of South Africa require that documents
executed outside South Africa must be authenticated for the purpose of use in South African courts. It is not possible therefore for an
investor to seek to impose criminal liability on us in a South African court arising from a violation of United States federal
securities laws.

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ITEM 4. INFORMATION ON THE COMPANY

4A. HISTORY AND DEVELOPMENT OF THE COMPANY

Introduction

DRDGOLD Limited, or DRDGOLD, is a South African gold mining company engaged in surface gold tailings retreatment

including exploration, extraction, processing and smelting. Our main subsidiary is Ergo Mining Operations Proprietary Limited, or
EMO, in which we hold a 74% interest. Our black economic empowerment partners are Khumo Gold SPV Proprietary Limited, or
Khumo Gold and an employee trust (known as the DRDSA Empowerment Trust), which hold 20% and 6% respectively in EMO. On
June 1, 2012, we sold our entire interest and claims against Blyvoor to Business Venture Investment No 1557 Proprietary Limited, a
wholly owned subsidiary of Village Main Reef Limited, or Village.

On July 1, 2012, all the group’s surface operations, including Crown Gold Recoveries Proprietary Limited, or Crown, all

the surface assets and liabilities of East Rand Proprietary Mines Limited, or ERPM, and ErgoGold (formerly called Elsburg Gold
Mining joint venture), were restructured into Ergo Mining Proprietary Limited, or Ergo Mining. As at June 30, 2013, EMO wholly
owned and operated Crown, Ergo Mining, and ERPM. Ergo Mining, Crown, ErgoGold and ERPM’s Cason operation are
collectively referred to as Ergo.

DRDGOLD is also a 49% partner in Chizim Gold (Pvt) Limited, or Chizim Gold, an early-stage gold exploration project on

Zimbabwe’s Greenstone Belt.

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

shares were listed on the Johannesburg Stock Exchange ("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. Our operations have focused on South
Africa's West Witwatersrand Basin, which has been a gold producing region for over 100 years.

Our shares and/or related instruments trade on the JSE, New York Stock Exchange, the Marche Libre on the Paris Bourse,

the Brussels Bourse in the form of International Depository Receipts, the Over The Counter, or OTC, market in Berlin and Stuttgart
and the Regulated Unofficial Market on the Frankfurt Stock Exchange.

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. The South African Companies Act, 1973 has been
superseded by the South African Companies Act 71, 2008 which had been promulgated as from May 1, 2011. For our ADSs, the
Bank of New York Mellon, at 101 Barclay Street, New York, NY 10286, United States, has been appointed as agent.

South African operations

Ergo

Ergo Mining was formed in June 2007, primarily to recover and treat – over a period of 12 years – approximately 186

million tonnes (Mt) of surface tailings contained in the Elsburg Tailings Complex for gold. As a second-phase development, in
conjunction with a new pipeline linking Ergo with Crown, the Ergo plant’s second carbon-in-leach (CIL) circuit was refurbished
during September 2011 at an aggregate cost of R 44,8 million to increase capacity from 1.2 million tonnes per month (Mtpm) to
1.8Mtpm. Ergo Mining is licensed to produce uranium and sulphuric acid. A desktop feasibility study to assess the potential of these
by-products from the Ergo resource suggests that it is not financially viable in the current climate. On July 1, 2012, Ergo Mining
acquired the mining assets and certain liabilities of Crown and all the surface assets and liabilities of ERPM as part of the
restructuring of our surface operations. Also as part of this restructuring, Ergo Mining acquired DRDGOLD's 35% interest in
ErgoGold for R200 million.

Crown was acquired on September 14, 1998, in exchange for 5,925,139 of our ordinary shares. Crown, which is located

within the Witwatersrand Basin, exploits various surface sources, including sand and slime tailings deposited as part of previous
mining operations. On July 1, 2012, Crown sold its mining assets, mining and prospecting rights and certain liabilities to Ergo Mining
in exchange for shares in Ergo Mining as part of the restructuring of our surface operations.

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ERPM, which consists of the original underground mine, which is under care and maintenance, the Cason Dump surface

retreatment operation and ERPM Extension 1 and 2 exploration tenements, were acquired on October 10, 2002. Underground mining
at ERPM was halted in October 2008. On July 1, 2012, ERPM sold its surface mining assets, and its 65% interest in ErgoGold to
Ergo Mining in exchange for shares in Ergo Mining as part of the restructuring of our surface operations. In line with the group’s
strategy to exit underground mining operations, on July 24, 2014 EMO and ERPM entered into an agreement with ERPM South
Africa Holding Proprietary Limited, the nominee of Australian based Walcot Capital for the disposal of certain of the
underground mining and prospecting rights held by ERPM including the related liabilities subsequent to fiscal 2014. This
agreement is subject to a number of conditions, including that the Purchaser is to secure funding to pay the purchase consideration
within sixty days of the Signature Date, as well as a number of regulatory consents and permission, most notably consent to the
sale by the Minister of Minerals.

Blyvoor (discontinued operation)

We acquired Blyvoor in September 1997, in exchange for 12,693,279 of our ordinary shares. Blyvoor 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. In June 2012 we sold our entire interest in Blyvoor to Village.

A dispute is currently pending between DRDGOLD and Village insofar as the completion of this, the Blyvoor sale is

concerned, after Village failed to attend to certain administrative steps associated with the registration of Blyvoor’s New Order
Mining Rights. Blyvoor was also placed under provisional liquidation by the Village controlled Blyvoor board in August 2013 and
has since been under the control of the provisional liquidators that were appointed by the High Court of South Africa.

Zimbabwe exploration

Chizim Gold

Chizim Gold was established in December 2009 as a 50:50 joint venture with Chizim Investments (Pvt) Limited, or Chizim

Investments, to conduct feasibility studies on certain gold exploration tenements in Zimbabwe’s Greenstone Belt extending over an
area of more than 21,000 hectares. On June 7, 2013 DRDGOLD reduced its holding to 49%. On June 30, 2013 the entity stopped
conducting feasibility studies on all exploration tenements in Zimbabwe. This company is currently dormant after DRDGOLD
withdrew support for its activities during 2013. As underground mining is not in line with DRDGOLD’s strategy, we intend to
dispose of our exploration assets in Zimbabwe.

Important Events in Our Development Generally and in the Current Year

Restructuring of the BEE participation

On March 17, 2014 DRDGOLD agreed to acquire (and essentially roll-up) the stake of its black economic empowerment

partners in EMO for a consideration of R191,100,000, to be paid by issuing to them an aggregate 45.5 million ordinary shares in
DRDGOLD. Upon completion of the transaction, Khumo Gold will be issued 35.0 million shares and the DRDSA Empowerment
Trust 10.5 million.

The shareholders of DRDGOLD have voted in favour of the transaction at a special general meeting of shareholders held

at Johannesburg on June 27, 2014. The transaction remains subject to consent by the Minister of Minerals by not later than March
17, 2015.

Khumo Gold and the DRDSA Empowerment Trust agreed to a three-year lock-in from the closing date of the transaction

before they dispose of any of the DRDGOLD shares that are issued to them in terms of this transaction.

Ergo Mining and Ekhuruleni City Council agree terms to access and use treated sewerage water

On May 22, 2014 Ergo Mining entered into an agreement with the Ekhuruleni City Council that allows Ergo to, for a

period of twelve years commencing on June 14, 2014 draw up to 10 mega litres of processed sewerage water from the Ronderbult
Waste Water Treatment Works. Ergo will pay the council a monthly management fee of 68c per kiloliter consumed. The fee
escalates annually at a rate equal to the South African Consumer Price Index.

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.”

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4B. BUSINESS OVERVIEW

We are a South African gold mining company engaged in surface gold tailings retreatment, including exploration,

extraction, processing and smelting. Our surface tailings retreatment operations, including the requisite infrastructure and
metallurgical processing plants, are located in South Africa. Our operating footprint is unique, in that it involves some of the
largest concentration of gold tailings deposits in the world, situated within the city boundaries of Johannesburg and its suburbs.

Our strategy is to sustainably and through the appropriate deployment of capital and resources optimally exploit this, on-

surface resources and to expand our reach and create growth opportunities through the improvement and development of
innovative technologies.

This strategy involves investment and value creation in respect of all the capital stocks of sustainable development -

human, financial, intellectual and manufactured – to extract gold from extensive surface resources in the safest and most efficient
manner, thus ensuring the sustainability of our social and environmental capital whilst contributing to sustainable societies in and
around our footprint.

In the longer term DRDGOLD will seek to improve gold recovery so that, in future, the absolute minimum amount of

gold is returned to tailings deposition facilities along with the waste material and to growing our reclamation business by:

· the use of technology and continuing research and development to improve reclamation efficiency and effectiveness;
· acquiring additional surface resources on the Witwatersrand and, possibly, other areas;
· using existing expertise and skills to expand into the reclamation of other minerals from waste material.

In line with our focus on surface re-treatment, we disposed of our last operating underground operation, Blyvooruitzicht

Gold Mining Company Limited, or Blyvoor on June 1, 2012. Blyvoor has therefore been classified as a discontinued operation in
fiscal 2012 in the comparative periods in this Annual Report.

In fiscal 2010, the Group broadened its activities to include initial exploration activities on a small scale in Zimbabwe

through a joint venture in which we currently own 49%. The initial feasibility studies in Zimbabwe indicated potential
underground mining assets, which does not fit with our current strategy of surface gold tailings retreatment. We have therefore
decided not to continue with our Zimbabwe exploration activities.

During the fiscal years presented in this Annual Report, all of our operations took place in one geographic region, namely

South Africa.

Description of Our Mining Business

Surface tailings retreatment

Surface tailings retreatment involves the extraction of gold from old mine dumps, comprising the waste material from earlier

underground gold mining activities. This is done by reprocessing sand dumps and slimes dams along the reefs that stretch from east
to west just to the south of Johannesburg’s central business district (CBD). Sand dumps are the result of the less efficient stamp-
milling process employed in earlier times. They consist of coarse-grained particles which generally contain higher quantities of gold.
Sand dumps are reclaimed mechanically using front end loaders that load sand onto conveyor belts. The sand is fed onto a screen
where water is added to wash the sand into a sump, from where it is pumped to the plant. Most sand dumps have already been
retreated using more efficient milling methods. Lower grade slimes dams are also the result of the old treatment methods but do not
require milling. This material has become economically more viable to process owing to improved treatment methods. The material
from the slimes dams is broken down using monitor guns that spray jets of high pressure water at the target area. The resulting slurry
is then pumped to a treatment plant for processing.

Underground mining

Our underground mining operations, which have now either been sold or closed down, comprised relatively mature assets

and the principal mining method used was the extraction of Ore Reserves from previously mined-out areas, which required a high
degree of opening up, development and retreatment of these Ore Reserves.

21

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.

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.

After several years of strong trending, the average gold spot price decreased by 19.0% from $1,606 per ounce to $1,296

per ounce during the fiscal year 2014 and by 4% from $1,673 per ounce to $1,606 per ounce during the fiscal year 2013. The
average gold price received by us for fiscal 2014 was R432,775 per kilogram which was 5.5% lower than the previous year at
R458,084 per kilogram.

Looking ahead, we believe that the global economic environment, including escalating sovereign and personal levels of

debt, economic volatility and the oversupply of fiat currency, will again make gold attractive to investors. The drop in gold price has
squeezed out a number of high cost gold producers and caused investment in exploration and strategic capital to tumble. The supply
of gold has shrunk and is likely to shrink even more due to the significantly reduced capital expenditure and development occurring
in the sector. This coupled with the unimpressive state of the global economy and generally weak economic policies, are likely to
provide significant support to the gold price in the long term.

All of our revenue is generated in South Africa. Our total revenue for year ended June 30, 2014 was R1,809.4 million

(2013: R2,076.5 million and 2012: R3,004.3 million).

All gold we produce is sold on our behalf by Rand Refinery Proprietary Limited, or Rand Refinery, in accordance with a

refining agreement entered into in October 2001. The gold bars which we produce consist of approximately 85% gold, 7-8% silver
and the balance comprises copper and other common elements. The gold bars are sent to Rand Refinery for assaying and final
refining where the gold is purified to 99.9% and cast into troy ounce bars of varying weights. Rand Refinery 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 Rand Refinery a variable refining fee plus fixed marketing, loan and administration fees.
We currently own 11% (fiscal 2013: 11% and fiscal 2012: 4%) of Rand Refinery.

Ore Reserves

The tables below set out the Proven and Probable Ore Reserves of the Group as of June 30, 2014, and 2013, in both

imperial and metric units. Our Ore Reserves comprise 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.

22

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 Exploration Results, Mineral Resources and Mineral 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 operating costs, including overhead costs, to calculate the pay-limit grade. The
second is the cut-off grade which includes cash operating 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.

The pay-limit approach is based on the minimum in-situ grade of reclamation sites, 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 areas 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.

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 prepared 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.

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.

2014

2013

Three-year average

Business Plan

Three-year average

Business Plan

Reserve gold price –$/oz

1,539

1,289

1,559

1,192

Reserve gold price –R/kg

431,098

438,575

390,973

378,158

Exchange rate –R/$

8.71

10.58

7.80

9.87

In fiscal 2014, our attributable Ore Reserves (imperial) decreased by 10.0% from 1.7 million ounces at June 30, 2013, to

1.5 million ounces at June 30, 2014, primarily as a consequence of mining activity (depletion). Based on the life of mine business
plans, the life of mine for our operations at June 30, 2014, are set out below.

Surface

Mine

2014

2013

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

8 years

9 years

23

DRDGOLD's Attributable Ore Reserves as of June 30, 2014 and 2013 are set forth in the tables below.

Ore Reserves: Imperial

At June 30, 2014

At June 30, 2013

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)

Ergo

1

Surface

................................................................... 109,564

0.01

1,036

39.57

0.01

488

123.296

0.01

1,181

37.69

0.01

495

Total

2

........................................................................ 109,564

0.01

1,036

39.57

0.01

488

123.296

0.01

1,181

37.69

0.01

495

Ore Reserves: Metric

At June 30, 2014

At June 30, 2013

Proven Ore Reserves

Probable Ore Reserves

Proven Ore Reserves

Probable Ore Reserves

Tonnes

Grade

Gold

Content

Tonnes

Grade

Gold

Content

Tonnes

Grade

Gold

Content

Tonnes

Grade

Gold

Content

(mill)

(g/tonne)

(tonnes)

(mill)

(g/tonne)

(tonnes)

(mill)

(g/tonne)

(tonnes)

(mill)

(g/tonne)

(tonnes)

Ergo

1

Surface

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

99,397

0.32

32.198

35.898

0.42

15.191

111.854

0.33

36.739

34.192

0.45

15.388

Total

2

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

99,397

0.32

32.198

35.898

0.42

15.191

111.854

0.33

36.739

34.192

0.45

15.388

1

The Attributable Ore Reserves represent DRDGOLD's 74% attributable Ore Reserves of Ergo from the Elsburg and Benoni tailings complexes which are being processed by Ergo, however the mining rights for

these tailings are owned by ERPM. Crown has been included under Ergo for fiscal 2014 and 2013.

2

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 tons delivered to the mill.

24

The measurement and classification of our Proven and Probable Ore Reserves are sensitive to an extent 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, 2014 and 2013 respectively, we would not 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, 2014 and 2013 would be as follows:

Year ended June 30, 2014

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

Rand gold price per kilogram

431,098

438,575

387,988

474,208

Dollar gold price per ounce

1,539

1,289

1,385

1,693

Attributable ore reserves (million ounces)

1.5

1.5

1.5

1.5

Year ended June 30, 2013

Three-year

average price

Business Plan

at prevailing

price

10% Below

prevailing

price

10% Above

prevailing

price

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

390,973

378,158

340,342

415,974

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

1,599

1,192

1,073

1,311

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

1.7

1.7

1.7

1.7

The approximate mining recovery factors for the 2014 ore reserves shown in the above table are as follows:

Surface

Mine

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

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

100.0

41.8

The approximate mining recovery factors for the 2013 ore reserves shown in the above table are as follows:

Surface

Mine

Mine Call Factor

(%)

Metallurgical and

recovery factor

(%)

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

100.0

46.3

The following table shows the average drill/sample spacing (rounded to the nearest foot), as at June 30, 2014 and 2013, 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

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

328 ft. by 328 ft.

328 ft. by 328 ft.

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

June 30, 2014, are as follows:

Surface

Mine

Pay-limit grade

(g/t)

Costs used to

determine pay-

limit grade (R/t)

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

0.30

58.37

25

The pay-limit grades and costs used to determine reserves as of June 30, 2013, are as follows:

Surface

Mine

Pay-limit grade

(g/t)

Costs used to

determine pay-

limit grade (R/t)

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

0.30

58.37

We apply the pay-limit approach to the mineralized material database of our business in order to determine the tonnage and

grade available for mining.

Governmental regulations and their effects on our business

Common Law Mineral Rights and Statutory Mining Rights

Prior to the introduction of the Minerals and Petroleum Resources Development Act, or MPRD Act, in 2002, ownership in

mineral rights in South Africa could be acquired through the common law or by statute. 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 were required 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

Schedule II of the MPRD Act allows the Minister to grant, on application, appropriate rights over the same mineral on the

same land which is the subject of the old order right. By way of example, holders of unused old order rights had for a period of one
year from the effective date of the MPRD Act the exclusive right to apply for an appropriate right in terms of item 8 of Schedule II.
Once an old order right is lodged for conversion at the Department of Mineral Resources (DMR), it remains in force until it is
converted.

Conversion of Rights under the Mineral and Petroleum Resources Development Act, 2002

Existing old order rights were required 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 a 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 prospecting operations. Under the MPRD Act, mining rights
are not perpetual, but endure for a fixed period, namely a maximum period of thirty years, after which they may be renewed for a
further period of thirty years. Prospecting rights are limited to five years, with one further period of renewal of three years.
Applications for conversion of our old order rights were submitted to the DMR within the requisite time periods. During this period,
we are permitted to continue to operate under the terms and conditions of the old order rights which we hold. As at September 30,
2014, a substantial portion of our old order mining rights have been converted into new order rights under the terms of the MPRD Act
but await registration at the Mineral and Petroleum Titles Registration Office of the DMR.

Amendment Bill to the MPRDA

On March 6, 2014 the South African Parliament approved an Amendment Bill to the MPRDA. The Bill will come into

effect once signed by the State President. Some of the more important changes introduced by the Bill is to allow the holder of a
Mining Right to also mine “associated minerals” not specifically included in the Mining Right; it addresses anti-competitive conduct
by requiring the Minister of Minerals to refuse an application for exploration rights if it will cause a “concentration of rights” as
defined in the Bill; historic and old mine dumps are to be included in the definition of “residue stockpiles” and certain rehabilitation
obligations are created in respect of the discarded mines to which they pertain; and liability for rehabilitation will extend beyond the
issuance of a closure certificate and financial provision for closed sites will be required to be maintained for a period of 20 years after
a site is closed. Should the amendment bill to the MPRDA be enacted in its currently proposed form, the latter three amendments
referred to above may have a fundamental impact on the group's estimated environmental provisions.

In June 2014 the Minister of Minerals asked the State President to delay signing the Bill until after its potential impact on

the industry is further investigated.

26

Mining royalties

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

Mineral and Petroleum Resources Royalty Act, or the Royalty Act. The most significant feature of the Royalty Act 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 is deductible for normal income tax purposes.

The Royalty Act 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 thus
shares 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 is drawn between refined and unrefined minerals, the mineral royalty percentage rates (Y%) is

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 is
   capped at a maximum of 5.0% with a minimum of 0.5%.

· For unrefined minerals: Y (%) = 0.5 + [(EBIT divided by (Gross Sales multiplied by 9.0)) multiplied by 100]. This rate is
   capped at a maximum of 7.0% with a minimum of 0.5%.

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 broad 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 was
initially published in August 2004 and was subsequently amended in September 2010. 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 goals on equity participation (amount of equity participation and time frames) 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 by May 1, 2014. 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 in or around August 2010.

The Mining Charter and the related scorecard are not legally binding and, instead, simply state a public policy. However,

the DMR places significant emphasis on the compliance therewith. The Mining Charter and scorecard, have a decisive effect on
administrative action taken under the MPRD Act.

In recognition of the Mining Charter’s objectives of transforming the mining industry by increasing the number of black

people in the industry to reflect the country’s population demographics, to empower and enable them to meaningfully participate
in and sustain the growth of the economy, thereby advancing equal opportunity and equitable income distribution, we have
achieved our commitment to ownership compliance with the MPRD Act through our existing black economic empowerment
structure with Khumo Gold and the DRDSA Empowerment Trust. Our black economic empowerment partners, Khumo Gold and the
DRDSA Empowerment Trust, hold 20% and 6%, respectively, in our operating subsidiary, EMO. (See Item 4A.: “History and
Development of the Company”).

27

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. The 2009
amendments to the Act dealt with inter alia the stoppage 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 2009 amendment bill
are the insertion of 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. The President assented to the amendment bill in April 2009. The amendment Act was proclaimed and came into
law in May 2009.

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 of 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 2014, we contributed approximately R2.8 million under the COID (2013: R2.2 million) Act to a multi-
employer industry fund administered by Rand Mutual Assurance Limited.

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

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

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

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

Environmental Regulation

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.

28

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, guarantees 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.

Our environmental risks have been addressed in EMPs which have been submitted to the DMR for approval. Additionally,

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.

Our existing reporting and controls framework is consistent with the additional reporting and assessment requirements of the

MPRD Act.

The enactment of the amendment bill to the MPRDA in its currently proposed form may have a fundamental impact on the

group's estimated environmental provisions due to the inclusion of historic and old mine dumps in the definition of “residue
stockpiles” which creates certain rehabilitation obligations for the discarded mines to which they pertain as well the extension of the
liability for rehabilitation beyond the issuance of a closure certificate and the requirement to maintain financial provision for closed
sites for a period of 20 years after a site is closed.

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 and funds held in insurance instruments. 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, 2014, we held a total of R90.9 million (2013:R86.4 million) in trust, the balance held in each fund
being, R82.8 million (2013: R78.6 million) for Ergo, R8.1 million (2013: R7.7 million) for ERPM. Trustee meetings are held as
required, and quarterly reports on the financial status of the funds, are submitted to our board of directors.

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

Wits financial provision has been derecognized as at June 30, 2011, 2012, 2013 and 2014 and the Durban Deep financial provision as
at June 30, 2013 and 2014, 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 by replenishing it with

the proceeds from the sale of redundant mining equipment at the end of the life of the mine and gold from mine cleanup. 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 Company has subsequently made use of approved insurance products for a portion of its rehabilitation
liabilities. As of June 30, 2014, we held a total of R93.7 million (2013: R88.6million) in funds held in insurance instruments. As at
June 30, 2014 guarantees amounting to R305.7 million (2013: R305.7 million) were issued to the DMR. Subsequent to June 30, 2014
an additional guarantee amounting to R98.2 million was issued to the DMR.

The aggregate group rehabilitation, reclamation and closure cost provision was R471.7 million at June 30, 2014, compared

to R524.3 million at June 30, 2013. This has been included in the provision for environmental rehabilitation (R451.2 million) as well
as assets held for sale (R20.5 million) in our financial statements as at June 30, 2014.

29

4C. ORGANIZATIONAL STRUCTURE

The following chart shows our principal subsidiaries as of September 30, 2014. All of our subsidiaries are incorporated in

South Africa. Our voting interest in each of our subsidiaries are equal to our ownership interests. 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. DRDGOLD holds a
49% ownership interest (50% voting interest) in the Chizim Gold the joint venture in which is incorporated in Zimbabwe.

4D. PROPERTY, PLANT AND EQUIPMENT

DRDGOLD OPERATIONS
SEPTEMBER 30, 2014

30

Description of Significant Subsidiaries' Properties and Mining Operations

Witwatersrand Basin Geology

Ergo, which consists of the ErgoGold, Crown and ERPM’s Cason operations, is located on surface close to the

Witwatersrand Basin. Crown exploits various surface sources, including sand and slime tailings deposited as part of historical mining
operations. ERPM, halted its underground mining operation in October 2008. Ergo is a surface retreatment operation which is
currently processing slime tailings from the Elsburg tailings facility, which were historically deposited by ERPM’s underground
mining operation.

The Witwatersrand Basin comprises a 4 mile (6 kilometer) 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 (1.84
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, (sold on June 1, 2012), and certain of the underground mining and prospecting rights held by ERPM for which an

agreement to dispose was signed during July 2014 (subject to various suspensive conditions), were predominantly underground
operating mines located within the Witwatersrand Basin, exploiting gold bearing reefs in addition to certain surface sources.

Ergo

Overview

We own 74% of EMO, which in turn owns 100% of Ergo. Ergo is a surface tailings retreatment operation consisting of

the Ergo Mining, Crown, ERPM’s Cason operation and ErgoGold business units which are collectively referred to as Ergo.
ERPM’s Cason Dump surface tailings retreatment operation will be depleted in the fourth quarter of calendar 2014. Ergo
undertakes the retreatment of surface sources deposited as tailing from non-operating mining sites across central and east
Johannesburg. In order to improve synergies, effect cost savings and a simpler group structure, DRDGOLD restructured the group’s
surface operations (Crown, ErgoGold and surface assets of ERPM) into Ergo Mining with effect from July 1, 2012. At June 30, 2014,
Ergo had 2,329 employees, including specialized service providers such as Fraser Alexander Tailings.

Properties

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

the province of Gauteng on land owned by Ergo. Access to the Ergo plant is via the Ergo Road on the N17 Johannesburg-Springs
motorway. As of June 30, 2014 and September 2014, no encumbrances exist on Ergo's property.

Crown is situated on the outskirts of Johannesburg, South Africa and consists of three separate locations, City Deep, Crown

Mines and Knights. The entire mining footprint consists of the mining rights of City Deep, Consolidated Main Reef & Estates, Crown
Mines (“3Cs”) and Crown Gold Recoveries (“CGR”). Crown’s mining rights have been converted to new order rights under the
MPRD Act and the mining rights in respect of the 3Cs were registered at the Mineral and Petroleum Titles Registration Office in
January 2014 . In March 2013, applications for the transfer of the mining rights held by the 3Cs and CGR to ERGO were lodged with
the DMR, following the restructure of the company into a single surface retreatment business unit. These applications were successful
and were notarially executed in March 2014.

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.

31

History of Ergo
2005

Anglo American Corporation commissioned the Ergo plant in Brakpan in 1977. The operation became part of
AngloGold Ashanti in 1998 and was closed by that company in 2005.

2007

Ergo was founded by EMO (owned by DRDGOLD at the time) and Mintails SA as a joint venture.
On August 6, 2007, the joint venture parties entered into an agreement with AngloGold Ashanti, pursuant to which it
acquired the remaining assets of the Ergo plant for 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 consideration 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 acquired control of Ergo Mining through the acquisition of Mintails SA’s 50% in Ergo 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 commenced.

2011

Construction of the Crown/Ergo pipeline continued and the second CIL circuit of the Ergo plant was refurbished as part
of the Crown/Ergo pipeline project.

2012

The construction of the Crown/Ergo pipeline and second CIL circuit of the Ergo plant was completed.

2013

In order to improve synergies, effect cost savings and a simpler group structure DRDGOLD restructured the group’s
surface operations into Ergo Mining on July 1, 2012, which consisted of Crown, the surface operations of ERPM and
ErgoGold. Construction and commissioning of the Ergo flotation/fine-grind plant was completed in late December
2013.

2014

The FFG was suspended in April 2014 after metallurgical efficiencies declined. Test-work recommenced in August.
A prospecting right in respect of surface tailings dumps on various portions of the Farm Grootvlei and a portion of the
Farm Geduld was registered on May 12, 2014 for a period of 5 years ending on April 21, 2019.

History of Crown (consolidated into Ergo on July 1, 2012)
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

Khumo Bathong Holdings Proprietary Limited (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 then 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, EMO, which included 100% of ERPM, Crown and
Blyvoor. As a result we owned an 85% interest in EMO.

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
EMO. On August 28, 2006, Crown concluded an agreement with AngloGold Ashanti to purchase the Top Star Dump.

2008

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

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.
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 ore reserves.

2011

Construction of the pipeline to the Ergo tailings deposition site continued and was scheduled for completion in
December 2011.

2012

Construction of the pipeline to the Ergo tailings deposition site was completed.

2013

On July 1, 2012, Crown sold its mining assets, mining and prospecting rights and certain liabilities to Ergo Mining in
exchange for shares in Ergo Mining.

32

Mining and Processing

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

west, just to the south of Johannesburg’s central business district.

Material processed by Ergo 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.

Our four metallurgical plants, known as Ergo, Crown Mines, City Deep and Knights, have an installed capacity to treat

approximately 25.2 million tons of material per year. All of the plants have undergone various modifications during recent years
resulting in significant changes to the processing circuits. Crown serves as a milling and distribution station, as does City Deep. The
Knights and the Ergo plants are still fully operational.

In addition to the four metallurgical plants, Ergo’s assets include: access to some 750Mt to 900Mt of tailings deposited

across the western, central and eastern Witwatersrand; the Crown milling and pump station close to the Johannesburg central business
district; a 50km pipeline; and tailings deposition facilities including the significant Brakpan TSF.

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 Carbon-in-Leach,
or CIL, technology to extract the gold.

Set forth below is a description of each of our plants:

Ergo Plant: The expansion of the gold plant by refurbishing the second CIL circuit has increased the capacity to treat an
estimated 21Mt per year. The Ergo flotation/fine-grind ("FFG") plant project is designed to assist in liberating the gold
particles currently encapsulated in the sulphides and to achieve a targeted improvement in gold recovery efficiencies of
between 16% and 20%. This circuit commenced a three month test phase during August 2014 after it was temporarily
suspended in April 2014 following a decline in metallurgical efficiencies and is targeted to be back in full production by
January 2015, if test-work is successful.

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. Retreatment continued at the City Deep Plant until the plant was
decommissioned in August 2013 to operate as a milling and pump station and is pumping material to the Ergo Plant for
retreatment.

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. In June 2012, the gold extraction portion of the Crown
plant was discontinued and all material is now only screened, milled and thickened. This material is then pumped to the
Ergo plant for the final extraction of gold.

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 Knights plant, although historically part of the Crown operation, is located further east and
considerably closer to the Brakpan TSF. Retreatment of the nearby Cason dump is expected to ceased during Q4 of calendar
2014 and retreatment of the Lycaste dump – one of the last remaining sand dumps in this area - commenced. Due to the
location of the Knights plant it is able to access the Brakpan TSF to deposit waste.

ERPM Plant: A small section of the ERPM plant was refurbished and adapted to treat slurry deposits that had accumulated
through run-off in the Angelo pan area. Slurry containing organic material is processed through a scrubber and a variety of
screens to remove the oversize organic material prior to the conventional CIL circuit. This plant treats approximately 10,000
tonnes of material per month.

Electricity to the Ergo plant 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.
For the Ergo plant the average annual power consumption is about 149 GWHr and the maximum demand is about 32.0MVA.

33

Electricity is supplied to the Crown Mines and City Deep plants from separate substations referred to as Jupiter and No.

15 Shaft Crown Mines, and for Knights by the Ekhuruleni 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 Mines
and City Deep, the average annual power consumption is about 54 GWHr and 80GWHr, respectively and the maximum demand
are about 15.0MVA and 13.0MVA, respectively. For Knights the average annual power consumption is about 60 GWHr and the
maximum demand is about 14.2MVA.

As of June 30, 2014, the net book value of Ergo’s mining assets was R1,729.5 million (2013: R1,729.5 million).

During fiscal 2014, capital expenditure was mainly directed towards the construction of the Lycaste reclamation station and

the last of the Ergo flotation/fine-grind plant project.

The following capital expenditure was incurred at Ergo in fiscal 2014, 2013 and 2012:

Year ended June 30,

2014

2013

2012

R’000

R’000

R’000

Benoni sand milling..........................................................................................

3,007

-

-

Brakpan tailings dam - Generators...................................................................

968

-

-

Computerized X-ray machine...........................................................................

610

-

-

Daggafontein Rehabilitation............................................................................

2,253

-

-

Reclamation site 4A6.......................................................................................

32,375

-

-

Rooikraal Residue line.....................................................................................

57

-

-

Residue linear screens......................................................................................

1,954

-

-

Rondebult sewerage water...............................................................................

75

-

-

Security............................................................................................................

1,311

-

-

Soweto cluster dump reclamation....................................................................

951

-

-

Withok conceptual studies...............................................................................

160

-

-

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

3,265

-

33,869

CMR dump ............................................................................................................

-

-

57

Crown 3A2 Slime and steel work upgrade ..........................................................

-

1,586

-

Knights residue pipeline .......................................................................................

5,836

13,870

-

Knights girth gear and pinion ...............................................................................

1,356

1,536

-

4A11 dump ............................................................................................................

-

-

-

Angelo Pan reclamation ........................................................................................

-

17,636

2,995

Angelo Pan to Rosherville water pipeline ............................................................

-

12,805

-

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

-

-

112

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

-

19

14,196

New water line to Angelo Pan and Rocsherville .................................................

-

889

35,068

Crown/City Slurry line upgrade ...........................................................................

-

-

13,916

Benoni Slurry line .................................................................................................

3,359

8,370

-

Refurbishment of the Ergo plant and second leach section.................................

983

-

15,460

Ergo flotation/fine-grind plant ..............................................................................

23,759

254,281

38,510

Ergo flotation/fine-grind plant (pre-production working costs) ..........................

65,813

7,189

-

Brakpan TSF .........................................................................................................

6,219

11,702

50,733

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

464

1,091

-

Tower crane ..........................................................................................................

-

1,910

5,573

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

-

-

189

Cason high grade plant .........................................................................................

-

20,459

-

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

-

2,500

7,194

154,775

355,843

217,872

Exploration and Development

Exploration and development activity at Ergo 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 Ergo.
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 Proven and Probable Ore Reserves have been compiled.

34

Environmental and Closure Aspects

Ergo 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 Professor H. Annagran from the University
of Johannesburg 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 Ergo’s internal environmental assessment process. Although Ergo 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 required to be 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 Ergo’s metallurgical plants.
Overflows of return water dams may, depending on their location, pollute surrounding streams and wetlands. Ergo 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 the capacity of return water dams.

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

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

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

life of the mine is in place. The surface reclamation process at Ergo has several environmental merits as it has removed a potential
pollution source and opens up land for development.

Environmental management and compliance is further assisted by the in–house developed electronic monitoring system

(Compliance Management Tool) that incorporates all existing EIA's, EMP's, Mining Right Conversions, Performance Assessments
and SLPs associated with each mining right. The existing and most recent studies are used to supplement the management
components with regards to the mining right boundaries and its required compliance parameters. The individual management items
are integrated to provide a holistic overview of the state of each of the mining right areas. Spatial data pertaining to the mining right
boundaries is stored onto a central database. Spatial data is utilised to create a live map which illustrates the mining right area and
various environmental monitoring systems. This map depicts the mining right boundaries, roads, rails, mine dumps, plants, rivers,
pipeline routes, servitudes, way leaves, municipal services and other spatial data relevant to our mining operations.

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

cost for Ergo, in current monetary terms as at June 30, 2014 is approximately R451.2 million. As at June 30, 2014, a total of R82.8
million has been contributed to the Crown Rehabilitation Trust Fund, while a total of R44.6 million has been contributed by Ergo to
funds held in insurance instruments. The Crown Rehabilitation Trust Fund 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, 2014, our 74% share of the Proven and Probable Ore Reserves of Ergo was 1.5 million ounces. In fiscal 2013

our 74% of the Proven and Probable Ore Reserves was 1.7 million ounces. A Mineral Resource competent person is appointed at
each operation to review our Ore Reserve calculations for accuracy. For Ergo, Mr. Vivian Labuschagne is the appointed Mineral
Resource competent person. The current life of mine business plan is estimated to be eight years.

Production

In fiscal 2014, production decreased to 132,909 ounces from 146,381 ounces in fiscal 2013. This drop was the result of

firstly the late commissioning of the FFG and then as a consequence of significant metallurgical inefficiencies experienced during
initial production coupled with incessant rains over a period of three weeks over this time. We decided to suspend the new circuit
early in April 2014 in order to stabilize the lower grade CIL circuit prior to the commencement of electricity winter tariffs kicking in
in June 2014. Testwork on the FFG commenced in August 2014. Volume throughput for the year was steady at 23,908,000 tonnes
while recovery grades decreased from 0.196g/t to 0.173g/t.

Cash operating costs in fiscal 2014 was up $24 per ounce from $1,094 in fiscal 2013 to $1,118 per ounce.

35

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

2014

2013

Restated

2012

Restated

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

23,908

25,632

23,811

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

0,005

0.006

0.006

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

132,909

146,381

135,708

Results of Operations
Revenue (R‘000) ...........................................................................................................

1,809,434

2,076,496

1,764,191

Net operating costs (R‘000) .........................................................................................

1,549,417

1,397,177

1,141,973

Cash operating cost (R‘000)

1

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

1,540,622

1,414,904

1,151,400

Cash operating cost per ounce of gold ($)¹ ...................................................................

1,118

1,094

1,094

All-in sustaining cost per ounce of gold ($)¹ ................................................................

1,205

1,192

1,275

All-in cost per ounce of gold ($)¹ ..................................................................................

1,309

1,442

1,446

See Item 5A. “Operating Results – Capital expenditure (cash)” for a discussion on capital expenditure.

ERPM

Overview

We effectively own 74% of ERPM, which is consolidated as a subsidiary, through our 74% holding in EMO. ERPM

consists of an underground section and the Cason Dump surface retreatment operation. Underground mining at ERPM was halted in
October 2008 and the financial results and assets and liabilities of these operations are included in ‘Corporate office and other
reconciling items’ in the financial statements for segmental reporting purposes for all three years preserved. The retreatment of Ergo’s
Lycaste Dump will commence as the retreatment of the Cason Dump is completed. These are included under Ergo in the financial
statements for segmental reporting purposes.

At June 30, 2014, ERPM had 71 employees, including specialized service providers.

On July 11, 2014 EMO and ERPM entered into an agreement with ERPM South Africa Holding Proprietary Limited, the

nominee of Australian based Walcot Capital for the disposal of certain of the underground mining and prospecting rights held by
ERPM including the related liabilities during FY2014. This agreement is subject to a number of suspensive conditions including
regulatory consent and permission which had not been fulfilled at the date of this report.

Property

ERPM is situated on the Central Rand Goldfield located within and near the northern margin of the Witwatersrand Basin

in the town of Boksburg, 20 miles (32 kilometers) east of Johannesburgon land owned by ERPM. Access is via Jet Park Road on
the N12 Boksburg-Benoni highway. Historically underground mining and recovery operations comprised relatively shallow
remnant pillar mining in the central area and conventional longwall mining in the south-eastern area. Surface reclamation
operations including the treatment of sand from the Cason Dump, is conducted through the Knights metallurgical plant, tailings
deposition facilities and associated facilities. Until underground mining was halted in October 2008, the mine exploited the
conglomeratic South Reef, Main Reef Leader and Main Reef in the central area and the Composite Reef in the south-eastern area.
ERPM operates under mining license ML5/1997 in respect of statutory mining and mineral rights. As of June 30, 2014 and
September 2014, no encumbrances exist on ERPM's property.

At June 30, 2014, the net book value of ERPM’s mining assets was Rnil due to the transfer of ERPM’s related surface

mining assets to Ergo as part of the restructuring which took place on July 1, 2012.

History

1895

Formation of East Rand Proprietary Mines Limited.

1991

The FEV shaft was commissioned.

1999

East Rand Proprietary Mines Limited was liquidated in August 1999. The mine was run by a small number of
employees during liquidation. Underground flooding continued during liquidation.

2000

KBH took over control of the mine in January 2000. Operating as Enderbrooke Investments Proprietary Limited, or
Enderbrooke, and employing an outside contractor, the mine re-commenced mining operations in February 2000.

1

Cash operating cost, cash operating cost per ounce, all-in sustaining cost per ounce and all-in cost per ounce of gold are financial measures of

performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations. For a
reconciliation of operating costs see Item 5A.: “Operating Results.”

36

2002

Crown purchased 100% of ERPM, from Enderbrooke.

2003

An underground fire occurred at FEV Shaft, in February 2003. There was also the loss of Hercules Shaft in June 2003
and the loss of a secondary outlet at the FEV shaft in November 2003.

2004

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

2005

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

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
EMO.
A prospecting right covering an area of 1,252 hectares (3,093 acres) of the neighboring Sallies lease area, referred to as
ERPM Extension 1 was granted by the 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 Labor 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 Labor 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.

2010

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

2013

On July 1, 2012, ERPM sold all of its surface mining assets (excluding its 50% interest in Ergo) and its 65% interest in
ErgoGold to Ergo Mining in exchange for shares in Ergo Mining.

2014

During July 2014 EMO and ERPM entered into an agreement with ERPM South Africa Holding Proprietary Limited,
the nominee of Australian based Walcot Capital for the disposal of certain of the underground mining and prospecting
rights held by ERPM including the related environmental liabilities. This agreement is subject to a number of suspensive
conditions including regulatory consent and permission which had not been fulfilled at the date of this report.

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.

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.

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 Labor 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.

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.

37

Exploration and Development

ERPM has a prospecting right covering an area of 1,252ha (3,094 acres) of the adjacent Sallies mine, referred to as ERPM

Extension 1. The regional geology of the area indicates that there will be a strike change due to faulting associated with an East-West
trending sinistral tear fault. In order to confirm the anticipated change in the geological structure and hence payshoot orientation, it is
envisaged that prospecting will take place through development situated 50m in the footwall. Owing to high induced stress
experienced at depth, there will be concurrent over-stoping (that is stoping taking place concurrently with development) on the reef
plane for safety reasons. Prior to this prospecting right in respect of ERPM Ext. 1 lapsing, an application for a mining right in respect
of the same prospecting footprint was made in terms of the provisions of the MPRDA. The said mining right was approved and
granted and the registration thereof took place in March 2012. The mining right expires in January 2042.

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). This prospecting right was initially granted
for a period of 4 years and expired in March 2011. An application for renewal thereof was made in terms of the provisions of the
MPRDA. The renewal in respect thereof was refused by the DMR in December 2013. An appeal against the refusal of the DMR to
grant the renewal of the prospecting right was lodged with the Legal Services Directorate of the DMR in January 2014. These rights,
ERPM Ext 1 and ERPM Ext 2, both form part of the sale assets of the transaction with Walcot Capital.

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. 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 was used until October 6, 2008 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 meters.

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.

The government has appointed Trans-Caledon Tunnel Authority (TCTA) to construct a partial treatment plant

(neutralisation plant) to prevent the ground water being contaminated. TCTA completed the construction of the neutralisation plant
for the Central Basin and commenced treatment during July 2014. As part of the Heads of agreement signed in December 2012
between EMO, Ergo, ERPM and TCTA, sludge emanating from this plant is co-disposed onto the Brakpan TSF. Partially treated
water is then discharged by TCTA into the Elsburg Spruit. This agreement includes the granting of access to the underground water
basin through one of ERPM shafts and the rental of a site onto which it constructed its neutralisation plant. In exchange, Ergo and its
associate companies including ERPM have a set-off against any future directives to make any contribution toward costs or capital of
up to R250 million, and Ergo has the right to purchase up to 30 Ml (million litres) of treated water per day from TCTA at cost price
for use in its production circuits.

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

30, 2014 the present discounted value of the total cost of rehabilitation for ERPM is approximately R20.5 million. A total of R8.1
million has been contributed to the ERPM Rehabilitation Trust Fund and R41.8 million in insurance instruments. 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

Our 74% share of Proven and Probable Ore Reserves of ERPM are included under Ergo. As at June 30, 2014 the total

surface Ore Reserves comprise 0.039 million ounces from the Cason Dump and 1.11 million ounces from the Elsburg and Benoni
tailings complexes, which will be processed over the next one and eight years, respectively. A Mineral Resource competent person is
appointed at each operation to review our Ore Reserve calculations for accuracy. For ERPM, Mr. Vivian Labuschagne is the
appointed Mineral Resource competent person.

Current Production

Although ERPM is under care and maintenance, 257 ounces of gold was produced from clean-up activities during fiscal

2014.

38

Blyvoor (Discontinued operation)

Overview

Until June 1, 2012, when we sold our entire interest and claims against Blyvoor to Business Venture Investment No 1557

Proprietary Limited, a wholly owned subsidiary of Village, we owned 74% of Blyvoor, 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 produced over 38 million
ounces of gold since inception in 1937.

Blyvoor was placed under provisional liquidation by its board of directors, the majority of whom were the nominees of

Village, in August of 2013 following a number of work stoppages due to labor action and seismicity. This mine remains under the
control of the provisional liquidators. The information set our below are based upon information available to us up to the time of our
sale of Blyvoor in June 2012.

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 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. Prior to its liquidation Blyvoor also housed the majority of its employees in
Blyvoor-owned houses on the property and in the town of Carletonville.

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

Blyvoor is in the process of converting these old order mining rights to new order rights under the MPRD Act.

History

1937

Blyvooruitzicht Gold Mining Company Limited was incorporated and registered as a public company in South Africa
on June 10, 1937.

1942

Gold production commenced.

1995

Blyvoor acquired the Doornfontein Gold Mining Company Limited in November 1995.

1996

Blyvoor acquired the mineral rights representing the Western Deep Levels tribute area.

1997

We acquired the entire share capital of Blyvoor on September 15, 1997.

2001

Implementation of the Blyvoor expansion project.

2003

Commissioning of No. 4 and 5 Slimes Dam retreatment facility at a cost of 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 Khumo Bathong Holding Proprietary Limited, or
KBH, regarding the acquisition by Khumo Gold SPV Proprietary Limited, or Khumo Gold, of a 15% stake in our then
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, EMO, which owns ERPM, Crown and Blyvoor. We
owned an 85% interest in EMO.

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
EMO.

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 the South African electricity company 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

39

2010 fiscal year and was back in full production since May 2010.
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 Proprietary 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.

2011

In June 2011, DRDGOLD's Board of Directors decided to suspend financial assistance to Blyvoor.
The Blyvoor Board of Directors, in response to the DRDGOLD Board’s decision, resolved to begin business rescue
proceedings for Blyvoor in terms of Chapter 6 of the South African Companies Act.

2012

On June 1, 2012, we sold our entire interest and claims against Blyvoor to Business Venture Investment No 1557
Proprietary Limited a wholly owned subsidiary of Village.

2013

The Blyvoor board resolves to place the company in provisional liquidation.

Geology and Mineralization

Prior to its provisional liquidation, Blyvoor exploited 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.

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. The average mining depth at Blyvoor and Doornfontein is 10,541 feet (3,213 meters)
and 5,292 feet (1,613 meters) below mean sea level respectively. Mining of the reef took place in stope panels through drilling and
blasting. Blasted rock was removed from the stope panels and conveyed by shaft to the surface , and transported to the metallurgical
plant for gold extraction. Blyvoor used a cyanide leaching Carbon-in-Pulp, or CIP, process for the extraction of gold.

In fiscal 2012, before the sale of Blyvoor and following a decision of the board of directors of DRGOLD to withdraw

financial support from Blyvoor, it applied to be placed under Chapter 6 of the Companies Act business rescue protection when it
became apparent that the high costs of electricity charged during the winter months and the then lower price of gold would cause
Blyvoor to experience financial distress. Following a term payment arrangement with Eskom, the state owned electricity supplier
of South Africa and an increase in the gold price, the Business Rescue Practitioner who was appointed in terms of Chapter 6
terminated the business rescue proceedings with effect from November 10, 2011. This followed his conclusion that there were no
longer grounds to believe that Blyvoor was financially distressed. At the beginning of February 2012, Blyvoor suspended mining
from its Number 4 and 6 shafts as part of a process to reduce costs. On June 1, 2012, DRDGOLD sold its entire interest and claims
against Blyvoor and effectively transferred control to a wholly owned subsidiary of Village. DRDGOLD ceased consolidation of
Blyvoor from this date while Village commenced consolidating Blyvoor from said date. Refer to Item 4A.: “History and
Development of the Company” for a more detailed discussion. Following the provisional liquidation of Blyvoor during August 2013,
it remains under the control of the provisional liquidators.

The following capital expenditure was incurred at Blyvoor in fiscal 2012:

2012

R’000

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

381

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

-

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

8

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

-

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

50,315

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

23,326

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

8,909

82,939

40

Environmental and Closure Aspects

Blyvoor had 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 (approximately 2 million gallons (8 million liters) per day). Water not used in the operations was
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, Blyvoor took samples and monitored the level of contaminants in accordance with a water
management plan.

Blyvoor was 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 the time of its sale no clear solution had been reached.

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. At the time of its sale Blyvoor maintained close monitoring of
water leaks and ground subsidence to timely identify the formation of any possible sinkholes.

At the time of the sale, Blyvoor controlled dust pollution from slime dams by dust suppression and water management

programs. Short-term dust control was accomplished through ridge ploughing the top surface of dormant tailings dams.
Environmentally friendly dust suppressants, such as molasses, were also applied when deemed necessary. In the long-term, dust
suppression and water pollution was 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 updated its EMP to meet the new requirements of the MPRD Act and submitted it to the DMR for approval.

Production in fiscal 2012

Blyvoor produced a total of 96,645 ounces of gold for the period July 1, 2011 to May 31, 2012 of fiscal 2012, with

73,048 ounces from underground areas and 23,597 ounces from surface areas. This represented 42% of our total production from
operations for fiscal 2012 of 232,353 ounces.

Cash operating costs of $1,404 per ounce in fiscal 2012 increased from $1,290 per ounce in fiscal 2011.

The following table details the operating and production results from Blyvoor for fiscal 2012.

Year ended June 30,

2012

Production (imperial)
Surface Operations
Ore mined ('000 tons) ....................................................................................

3,004

Recovered grade (oz/ton)

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

0.008

Gold produced (ounces)

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

23,597

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

627

Recovered grade (oz/ton)

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

0.117

Gold produced (ounces)

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

73,048

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

96,645

Results of Operations
Revenue (R'000) ..............................................................................................

1,240,073

Operating costs (R'000) ...................................................................................

1,046,914

Cash operating cost (R'000)

1

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

1,052,197

Cash operating cost per ounce of gold ($)

¹

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

1,404

All-in sustaining cost per ounce of gold ($)¹ .................................................

1,543

All-in cost per ounce of gold ($)¹ ...................................................................

1,603

1

Cash operating costs, cash operating cost per ounce, all-in sustaining costs per ounce and all-in cost per ounce of gold are financial measures of

performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations.

41

Durban Roodepoort 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

Developments Proprietary Limited

("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. On the exercising of the option the option fee would be deemed part payment of the purchase consideration. If not, the
option fee would be forfeited to us.

On November 18, 2005, M5 exercised the option and provided a guarantee for payment. Prior to the registration of the

transfer occurring, we were notified by Rand Leases Properties Limited (formerly JCI Properties Limited) of an alleged pre-emptive
right in respect of the property in terms of an agreement dated December 1996, pursuant to which the property should be sold to them
on similar terms. We subsequently repudiated our agreement with M5 and notified Rand Leases Properties Limited that we did not
intend offering the property to them. Both parties instituted 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.
DRDGOLD entered into an agreement with Rand Leases Properties Limited ("Rand Leases Properties") and purchased the pre-
emptive right for an amount of R21.8 million. A sale agreement was concluded with Dino Properties Proprietary Limited ("Dino
Properties" previously called M5) and the transfer of the property into the name of Dino Properties was effected on October 18, 2012.
Both cases were subsequently withdrawn by Dino Properties and Rand Leases Properties respectively.

Environmental and Closure Aspects

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

been taken over by DRD Proprietary Limited, which is owned by a subsidiary of Mintails South Africa Proprietary Limited
(“Mintails SA”). A liability transfer on the prescribed form in terms of section 43(2) of the MRPDA was submitted to the DMR in
July 2010. We are still awaiting approval of the transfer of environmental liabilities from the DMR.

In fiscal 2013, the Company transferred the environmental rehabilitation liabilities in respect of mining rights over the

Durban Deep mining license area which was disposed of to the purchaser of the mining rights . A total of R25.6 million previously
contributed to the Environmental Trust Fund has been relinquished to DRD Proprietary Limited as a result of the transfer of the
liability during fiscal 2013. DRDGOLD therefore still has a contingent liability until such legal transfer is effected, amounting to
R63.4 million less the trust fund amount of R26.8 million.

West Wits

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 Proprietary Limited, subsequently renamed, Mogale Gold Proprietary Limited, or Mogale, during fiscal 2004,
effectively leading to the closure of the mining operation.

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 Mintails' 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 Old Order Mining Licence was converted to a New Order
Mining Right and ceded same to West Wits Monarch Proprietary Limited (“the Cessionary”).

The DMR and affected mining companies are involved in the development of a ‘Regional Mine Closure Strategy’ in the

gold fields’ area. The government has appointed Trans-Caledon Tunnel Authority to propose solutions for the various basins. They
have also provided funding for the interim solution in the Western and Central Basins.

42

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 R19.9 million previously contributed to the Environmental Trust Fund has
been relinquished to Mintails as a result of the transfer of the liability.

Ongoing Legal Proceedings

Litigation regarding environmental issues

On August 2, 2006 and September 4, 2006, two 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 programs of both sites, and for the sites to be rehabilitated and closed in accordance with the standards of the MPRD
Act. In fiscal 2014, 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.

Dispute with the Ekurhuleni Municipality

The Ekurhuleni Municipality has brought an action against ERPM claiming an amount of R42.0 million in respect of

outstanding rates and taxes which are allegedly owing. As at June 30, 2014, the difference between the invoiced amount and
ERPM’s calculations amounted to R55.8 million. ERPM has employed experts to investigate the allegations and believes that this
claim is unfounded. ERPM is defending this action on the belief that there are sufficient defences to repel the claim, therefore an
outflow of resources is remote.

Appeal hearing against valuation of properties by the Ekurhuleni Municipality

ERPM is involved in a further dispute with the Ekurhuleni Metropolitan Municipality in respect of the valuation of various

freehold properties of which ERPM is the registered owner. The aggregate valuation of these properties is approximately R400
million. ERPM has appealed against these valuations in terms of the provisions of the Local Government: Municipal Property Rates
Act, 6 of 2004 on the basis of inter alia the calculation methodology employed by the Municipal Valuer on behalf of the
Municipality. The hearings in respect of the appeal were heard in June 2013. ERPM’s challenge of the valuations was successful
when Valuation Appeal Board set aside the valuations during March 2014.

Silicosis Litigation

As a result of the South African Constitutional Court decision permitting individuals employed as miners with occupational

lung diseases to sue their current or former employers for damages outside the statutory compensation scheme, we could be subject to
claims against us from previous or current employees, including a potential class action or similar group claim.

In January 2013 DRDGOLD, ERPM and 23 other mining companies were served with a court application for a class

action issued in the South Gauteng High Court by alleged former mineworkers and dependants of deceased mineworkers. In the
pending application the applicants allege that DRDGOLD, ERPM and other mining companies conducted underground mining
operations in such a negligent manner that the former mineworkers contracted silicosis. The applicants have not yet quantified the
amounts which they would like the mining companies to pay as damages.

The companies are currently gathering information in preparation for the matter. An answering affidavit opposing the

application for the certification of a class action was filed with the High Court on 24 June 2014.

Taking into account that the silicosis claim is still at certification stage and should anyone bring similar claims against

DRDGOLD or any of its subsidiaries in future, those claimants would need to provide evidence proving that silicosis was
contracted while in the employment of the company and that it was contracted due to negligence on the company’s part. The link
between the cause (negligence by the company while in its employ) and the effect (the silicosis) will be an essential part of any
case. It is therefore uncertain as to whether the company will incur any costs related to silicosis claims in the future and due to the
limited information available on any claims and potential claims and the uncertainty of the outcome of these claims, no reliable
estimation can be made for the possible obligation.

43

44

5A. OPERATING RESULTS

Business overview

We are a South African gold mining company engaged in surface gold tailings retreatment, including exploration,

extraction, processing and smelting. Our surface tailings retreatment operations, including the requisite infrastructure and
metallurgical processing plants, are located in South Africa. Our operating footprint is unique, in that it involves some of the
largest concentration of gold tailings deposits in the world, situated within the city boundaries of Johannesburg and its suburbs.

Our strategy is to sustainably and through the appropriate deployment of capital and resources optimally exploit these,

on-surface resources and to expand our reach and create growth opportunities through the improvement and development of
innovative technologies.

This strategy involves investment and value creation in respect of all the capital stocks of sustainable development -

human, financial, intellectual and manufactured – to extract gold from extensive surface resources in the safest and most efficient
manner, thus ensuring the sustainability of our social and environmental capital whilst contributing to sustainable societies in and
around our footprint.

In the longer term DRDGOLD will seek to improve gold recovery so that, in future, the absolute minimum amount of

gold is returned to tailings deposition facilities along with the waste material and to growing our reclamation business by:

· the use of technology and continuing research and development to improve reclamation efficiency and effectiveness;
· acquiring additional surface resources on the Witwatersrand and, possibly, other areas; and
· using existing expertise and skills to expand into the reclamation of other minerals from waste material.

In line with our focus on surface re-treatment, we disposed of our last operating underground operation, Blyvooruitzicht

Gold Mining Company Limited, or Blyvoor on June 1, 2012. Blyvoor has therefore been classified as a discontinued operation in
fiscal 2012 in the comparative periods in this Annual Report.

In fiscal 2010, the Group broadened its activities to include initial exploration activities on a small scale in Zimbabwe

through a joint venture in which we currently own 49%. The initial feasibility studies in Zimbabwe indicated potential
underground mining assets, which does not fit with our current strategy of surface gold tailings retreatment. We have therefore
decided not to continue with our Zimbabwe exploration activities.

During the fiscal years presented in this Annual Report, all of our operations took place in one geographic region, namely

South Africa.

Set forth below is a brief overview of our operations.

Ergo (Continuing operations):

· Ergo Mining Proprietary Limited (the entity is referred to as Ergo Mining, however the operating segment is called Ergo)
– surface tailings retreatment; and
· East Rand Proprietary Mines Limited (ERPM) – ERPM Extension 1 and 2 exploration tenements. ERPM’s underground
   mining operation has been discontinued and is included under ‘Corporate office and other reconciling items’ in our
   financial statements’ operating segments. On July 25, 2014, DRDGOLD announced that its subsidiaries Ergo Mining
   Operations Proprietary Limited (EMO) and ERPM collectively had entered into an agreement to dispose of certain
   underground mining and prospecting rights held by ERPM, and certain other assets on the related mining areas, for an
   agreed consideration of R220 million. This agreement is subject to a number of suspensive conditions including
   regulatory consent and permission which had not been fulfilled at the date of this report.

Blyvoor (discontinued operation):

· Blyvooruitzicht Gold Mining Company Limited (Blyvoor) – underground mining and surface tailings retreatment
   disposed on June 1, 2012.

In fiscal 2014, the loss from continuing operations was R54.7 million (2013: profit of R97.7 million and 2012: profit of

R250.8 million) and profit from discontinued operations was Rnil (2013: Rnil, 2012: R124.0 million).

As at June 30, 2014, we had attributable Ore Reserves of approximately 1.5 million ounces, compared to 1.7 million

ounces as at June 30, 2013 and 1.8 million at June 30, 2012.

45

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 both in terms of 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 gold, including the effects of mining efficiencies; and
· General economic factors, such as exchange rate fluctuations and inflation, and factors affecting mining operations in
   South Africa.

Gold price

Our revenues are derived primarily from the sale of gold produced at our surface tailings retreatment operations. 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 U.S. 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 is often 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 and we do not hedge against changes in gold prices.

The following table indicates data relating to the dollar gold spot price for the 2014, 2013 and 2012 fiscal years:

2014 fiscal year

2013 fiscal year

% change

Opening gold spot price on July 1,

$1,192 per ounce

$1,599 per ounce

(25%)

Closing gold spot price on June 30,

$1,315 per ounce

$1,192 per ounce

10%

Lowest gold spot price during the fiscal year

$1,192 per ounce

$1,192 per ounce

-

Highest gold spot price during the fiscal year

$1,426 per ounce

$1,792 per ounce

(20%)

Average gold spot price for the fiscal year

$1,296 per ounce

$1,606 per ounce

(19%)

2013 fiscal year

2012 fiscal year

% change

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

$1,599 per ounce

$1,506 per ounce

6%

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

$1,192 per ounce

$1,599 per ounce

(25%)

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

$1,192 per ounce

$1,483 per ounce

(20%)

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

$1,792 per ounce

$1,895 per ounce

(5%)

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

$1,606 per ounce

$1,673 per ounce

(4%)

2012 fiscal year

2011 fiscal year

% change

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

$1,506 per ounce

$1,244 per ounce

21%

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

$1,599 per ounce

$1,506 per ounce

6%

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

$1,483 per ounce

$1,157 per ounce

28%

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

$1,895 per ounce

$1,553 per ounce

22%

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

$1,673 per ounce

$1,369 per ounce

22%

Our production has been sourced from South Africa, and as a result, the impact of movements in relevant exchange rates

is significant to our operating results. The average gold price in rand (based on average spot prices for the year) increased from
R12,970 per ounce in 2012 (a 36% increase from fiscal 2011) to R14,185 per ounce in 2013 (a 9% increase from fiscal 2012) with
a decrease to R13,614 per ounce in 2014, a 4% decrease from fiscal 2013.

Based on our forecast gold price of R453,121 per kilogram for fiscal 2015, a 10% increase in the rand gold price

received will increase our forecast profit for the year by R188.5 million and a 10% decrease in the rand gold price received will
decrease our profit for the year by R188.1 million.

46

Gold production and operating costs

In fiscal 2014, total production from all operations decreased to 132,909 ounces (produced from 23.9 million tonnes

milled at an average yield of 0.173g/t) from 146,381 ounces in fiscal 2013 (produced from 23.3 million tonnes milled at an
average yield of 0.20g/t) and 232,353 ounces in fiscal 2012 (produced from 24.9 million tonnes milled at an average yield of
0.29g/t).

In fiscal 2014, production from our continuing operations decreased to 132,909 ounces (produced from 23.9 million

tonnes milled at an average yield of 0.173g/t) from 146,381 ounces in fiscal 2013 (produced from 23.3 million tonnes milled at an
average yield of 0.20g/t). In fiscal 2013 the production increased from 135,708 ounces (from 21.6 million tonnes milled at an
average yield of 0.20g/t) in fiscal 2012.

The decrease in total production as well as production from our continuing operations during fiscal 2014 was due to

lower than expected recoveries in the FFG circuit as well as production in the FFG being temporarily suspended to introduce a
number of engineering upgrades and to revisit the plant's carbon management regime.

The increase in production from our continuing operations during fiscal 2013 was due to a rise in throughput, resulting

from the Crown/Ergo pipeline being fully operational during fiscal 2013 while the decrease in total production was due to the
Blyvoor being sold in late fiscal 2012. Our discontinued operation, Blyvoor produced 96,645 ounces (from 3.3 million tonnes
milled at an average yield of 0.91g/t) during fiscal 2012 before its disposal on June 1, 2012.

Our costs and expenses consist primarily of operating costs and depreciation. Operating costs include labor, specialized

service providers, stores, electricity and other related costs, incurred in the production of gold. ‘Consumables and other’ and
'specialized services' are the largest components of operating costs, constituting respectively, 52% and 15% of the operating cost
for fiscal 2014, compared to 46% and 19% of operating costs for fiscal 2013. "Consumables and other" and 'labor' constituted
48% and 18%, respectively, of our operating costs from continuing operations for fiscal 2012.

During fiscal 2014 the cash operating costs per kilogram increased by 20% for continuing and discontinued operations

(2013: 2%, 2012: 21%) mainly due to lower gold production as well as above inflation increases in prices of key consumables,
labor and electricity.

General economic factors

All our operations are located in South Africa. We are exposed to a number of factors, which could affect our

profitability, such as exchange rate fluctuations, inflation and other risks relating to South Africa. In conducting mining
operations, we recognize the inherent risks and uncertainties of the industry, and the wasting nature of the assets.

Effect of exchange rate fluctuations

For the years ended June 30, 2014 and June 30, 2013 all of our revenues were generated from South Africa, all of our

operating costs were denominated in rand and we derived all of our revenues in dollars. As the price of gold is denominated in
dollars and we realize our revenues in dollars, the appreciation of the dollar against the rand increases our profitability, whereas
the depreciation of the dollar against the rand reduces our profitability.

Based upon average exchange rates during the respective years, the rand weakened by 17% against the dollar in fiscal

2014, compared to a weakening of 14% against the dollar in fiscal 2013 and a weakening of 11% against the dollar in fiscal 2012.

In both fiscal 2014 and 2013 the weakening of the rand against the dollar was outweighed by a weakening in the Dollar

gold price. This resulted in a decrease in the Rand gold price received of 6% in fiscal 2014 and a 9% increase in fiscal 2013. The
weakening of the rand against the dollar in fiscal 2012 was accompanied by a strengthening of the gold price and resulted in an
increase in the Rand gold price received of 36%.

As an unhedged gold producer, we do not enter into forward gold sales contracts to reduce our exposure to market

fluctuations in the dollar gold price or the exchange rate movements. If revenue from gold sales falls for a substantial period
below our cost of production at our operations, we could determine that it is not economically feasible to continue commercial
production at any or all of our plants or to continue the development of some or all of our projects.

47

Our cash operating costs per kilogram for our operations was R372,671 per kilogram of gold produced in fiscal 2014,

R310,763, per kilogram of gold produced in fiscal 2013 and R304,912 per kilogram of gold produced in fiscal 2012. Our cash
operating costs per kilogram for our continuing operation was R372,671 per kilogram of gold produced in fiscal 2014, R310,763
per kilogram of gold produced in fiscal 2013 and R272,778 per kilogram of gold produced in fiscal 2012. For fiscal 2012, our
cash operating costs per kilogram for our discontinued operation was R350,032 per kilogram of gold produced.

Effect of inflation

In the past, our operations have been materially adversely affected by inflation. If there is a significant increase in

inflation in South Africa without a concurrent devaluation of the rand or an increase in the price of gold, our costs will increase,
negatively affecting our operating results.

The movements in the rand/dollar exchange rate, based upon average rates during the periods presented, and the local

annual inflation rate for the periods presented, as measured by the South African Consumer Price Index, or CPI, are set out in the
table below:

Fiscal year ended

Year ended June 30,

2014

(%)

2013

(%)

2012

(%)

The average rand/dollar exchange rate weakened by .....................................................................

17

14

11

CPI (inflation rate) ...........................................................................................................................

6.6

5.5

5.5

South African political, economic and other factors

We are a South African company and all our revenue producing operations are based in South Africa. As a result, we are

subject to various economic, fiscal, monetary and political factors that affect South African companies generally, including
exchange control regulations. Governmental officials have from time to time stated their intentions to lift South Africa’s exchange
control regulations when economic conditions permit such action. Over the last few years, certain aspects of exchange controls for
companies and individuals have been incrementally relaxed. It is, however, impossible to predict when, if ever, the South African
Government will remove exchange controls in their entirety. South African companies remain subject to restrictions on their
ability to export and deploy capital outside of the Southern African Common Monetary Area, unless dispensation has been
granted by the South African Reserve Bank. For a detailed discussion of exchange controls, see Item 10D.: “Exchange controls.”

On May 1, 2004, the Mineral and Petroleum Resources Development Act (MPRD Act) became effective. Prior to the

introduction of the MPRD Act, private ownership in mineral rights and statutory mining rights in South Africa could be acquired
through the common law or by statute. Now, all mineral rights have been placed under the custodianship of the South African
Government under the provisions of the MPRD Act, and "old order" proprietary rights need to be converted to "new order" rights
of use within certain prescribed periods. We have submitted certain applications in this regard. This process is described in more
detail under Item 4B.: “Business Overview – Governmental regulations and their effects on our business - South Africa - Common
Law Mineral Rights and Statutory Mining Rights.”

48

Recent developments

Ergo (includes Ergo Mining, ErgoGold, Crown and ERPM’s Cason dump)

On July 1, 2012, DRDGOLD restructured the group’s surface operations into Ergo Mining in order to improve synergies,

affect cost savings and implement a simpler group structure. Ergo Mining is a wholly-owned subsidiary of Ergo Mining
Operations Proprietary Limited, or EMO. EMO is 74% held by DRDGOLD, 20% by its black economic empowerment (BEE)
partner, Khumo Gold SPV Proprietary Limited (Khumo Gold) and 6% by the DRDSA Empowerment Trust.

Various transactions to give effect to the restructuring have been entered into, in terms of which:

· DRDGOLD sold its 35% direct interest in the ErgoGold unincorporated partnership to Ergo Mining for R200
   million on loan account;
· Crown Gold Recoveries Proprietary Limited, or Crown sold its mining assets (excluding its 50% interest in Ergo
   Mining), mining and prospecting rights and certain liabilities to Ergo Mining for shares in Ergo Mining;
· ERPM sold all of its surface mining assets (excluding its 50% interest in Ergo Mining) and its 65% interest in
   ErgoGold to Ergo Mining in exchange for shares in Ergo Mining; and
· Crown and ERPM will distribute their entire holdings in Ergo Mining to sole shareholder EMO.

In terms of the restructuring of the group’s surface operations into one business segment, ERGO Mining, the requisite

applications in terms of section 11 of the MPRD Act to obtain Ministerial consent were lodged by ERPM and Crown in March
2013. We are still awaiting the procurement of the approval of the Minister.

Blyvoor

On February 11, 2012, DRDGOLD, Village Main Reef Limited (Village), Blyvoor and Business Venture Investments

No 1557 Proprietary Limited (a wholly owned subsidiary of Village) (Purchaser) entered into a sale of shares and claims
agreement. Pursuant to terms of the Agreement, DRDGOLD agreed to sell its entire shareholding in Blyvoor (which amounts to
74% of the total issued ordinary share capital of Blyvoor) (Sale Shares) and its working capital and shareholder loan claims
against Blyvoor, or the Sale Claims to the Purchaser, the Transaction. The Transaction is divided into the Part A Sale and the Part
B Sale. In terms of the Part A Sale, the Sale Claims are sold to the Purchaser, and in terms of the Part B Sale, the Sale Shares are
sold to the Purchaser. The purchase consideration payable in respect of the Sale Claims and the Sale Shares shall be discharged by
Village through the issue of 85,714,286 new ordinary shares in Village (Village Shares) to DRDGOLD and an amount of R1
payable in cash by Village, respectively.

The Part A Sale was completed on June 1, 2012, at which time 65,714,286 of the Village Shares were issued directly to

DRDGOLD and 20,000,000 are held in escrow (Escrow Shares) pending completion of the Part B Sale.

The Part B Sale is subject to the fulfillment, or waiver (if applicable), of the following conditions precedent:

· by not later than the second anniversary of the signature date of the Agreement, the Department of Mineral
   Resources (DMR) has granted the conversion of Blyvoor's old order mining right and the new order mining right has
   been notarially executed and registered in the Mining Titles Office or Conversion; and
· by not later than the third anniversary of the signature date of the Agreement, the DMR has unconditionally
   approved the transfer of DRDGOLD's interest in Blyvoor to the Purchaser in terms of section 11 of the Mineral &
   Petroleum Resources Development Act, No 28 of 2002 or conditionally approved it on terms and conditions which
   each of DRDGOLD and the Purchaser confirms to be acceptable (Section 11 Approval).

Upon fulfillment of the Part B Conditions Precedent, the Escrow Shares together with any accrued dividends thereon will

be released to DRDGOLD and the Sale Shares will be transferred to the Purchaser.

If Conversion does not occur in accordance with the terms of the Agreement, or Conversion occurs but Section 11

Approval is not obtained, and unless it did not occur as a consequence of a Prejudicial Act on the part of either of the Parties, any
one, or more, of the following may occur:

· the sale of the Sale Shares is implemented and the Sale Shares are transferred to the Purchaser;
· a portion of the Sale Claims revert to DRDGOLD;
· the Escrow Shares together with any accrued dividends thereon are released to DRDGOLD or to the Purchaser;
· the appointment of the Purchaser as DRDGOLD’s agent to render corporate services on behalf of DRDGOLD to Blyvoor
   continues or is terminated; and/or
· the DRDGOLD’s right to receive dividends in respect of the Sale Shares is reinstated.

A dispute is currently pending between DRDGOLD and Village insofar as the completion of this, the Blyvoor sale is

concerned, after Village failed to attend to certain administrative steps associated with the registration of Blyvoor’s New Order
Mining Rights. DRDGOLD is alleging that this constituted a breach of contract and a Prejudicial Act on the part of Village, which
brings about a deemed compliance and entitles DRDGOLD to relief.

49

Blyvoor was also placed under provisional liquidation by the Village controlled Blyvoor board in August 2013 and has since

been under the control of the provisional liquidators that were appointed by the High Court of South Africa.

Key financial and operating indicators

The table below presents the key performance measurement data for the past three fiscal years: The financial results for

the years ended June 30, 2014, 2013 and 2012 below are stated in accordance with IFRS as issued by the IASB. The table also
includes the key performance measures for the growth of our business and its profitability, which are gold revenue, production,
operating costs, cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram, capital
expenditure and Ore Reserves.

Operating data

Year ended June 30,

2014

2013

2012

Total operations

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

1,809,434

2,076,496

3,004,264

Gold production (ounces) .............................................................................................

132,909

146,381

232,353

Gold production (kilograms) ........................................................................................

4,134

4,553

7,227

Revenue (R/kilogram) ..................................................................................................

437,696

456,072

415,700

Average gold price received (R/kilogram) ...................................................................

432 775

458,084

418,538

Net operating costs (R'000) ..........................................................................................

1,549,400

1,397,177

2,188,887

Cash operating costs (R'000) ........................................................................................

1,540,622

1,414,904

2,203,597

Cash operating costs (R/kilogram)

1

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

372,671

310,763

304,912

All-in sustaining costs (R/kilogram)¹ ...........................................................................

401,691

362,599

355,571

All-in costs (R/kilogram)¹ .............................................................................................

436,503

433,669

391,732

Additions to property, plant and equipment - cash (R'000).........................................

158,593

368,478

319,097

Ore Reserves (ounces) ..................................................................................................

1,524,000

1,676,000

1,825,000

Continuing operations
Revenue (R'000) ...........................................................................................................

1,809,434

2,076,496

1,764,191

Gold production (ounces) .............................................................................................

132,909

146,381

135,708

Gold production (kilograms) ........................................................................................

4,134

4,553

4,221

Revenue (R/kilogram) ..................................................................................................

437,696

456,072

417,956

Average gold price received (R/kilogram) ...................................................................

432 775

458,084

418,849

Net operating costs (R'000) ..........................................................................................

1,549,400

1,397,177

1,141,973

Cash operating costs (R'000) ........................................................................................

1,540,622

1,414,904

1,151,400

Cash operating costs (R/kilogram)¹ ..............................................................................

372,671

310,763

272,779

All-in sustaining costs (R/kilogram)¹ ...........................................................................

401,691

362,599

334,834

All-in costs (R/kilogram)¹ .............................................................................................

436,503

433,669

386,149

Additions to property, plant and equipment - cash (R'000) .........................................

158,593

368,478

236,410

Ore Reserves (ounces) ..................................................................................................

1,524,000

1,676,000

1,825,000

Discontinued operation
Revenue (R'000) ...........................................................................................................

n/a

n/a

1,240,073

Gold production (ounces) .............................................................................................

n/a

n/a

96,645

Gold production (kilograms) ........................................................................................

n/a

n/a

3,006

Revenue (R/kilogram) ..................................................................................................

n/a

n/a

412,533

Average gold price received (R/kilogram) ...................................................................

n/a

n/a

418,096

Net operating costs (R'000) ..........................................................................................

n/a

n/a

1,046,914

Cash operating costs (R'000) ........................................................................................

n/a

n/a

1,052,197

Cash operating costs (R/kilogram)¹ ..............................................................................

n/a

n/a

350,032

All-in sustaining costs (R/kilogram)¹ ...........................................................................

n/a

n/a

384,689

All-in costs (R/kilogram)¹ .............................................................................................

n/a

n/a

399,572

Additions to property, plant and equipment - cash (R'000) .........................................

n/a

n/a

82,938

Ore Reserves (ounces) ..................................................................................................

n/a

n/a

n/a

¹

Cash operating costs, all-in sustaining costs and all-in costs are non-IFRS financial measures of performance that we use to determine cash

generating capacities of the mines and to monitor performance of our mining operations. For a reconciliation of those measures to operating
costs, see Item 5A.: “Operating Results” - “Reconciliation of cash cost per kilogram, all-in sustaining costs per kilogram, all-in costs per
kilogram and capital expenditure (cash).”

50

Revenue

Revenue is derived from the sale of gold. The following table analyzes our revenue for the periods under review for

continuing and discontinued operations:

Year ended June 30,

2014

R'000

2013

R'000

2012

R'000

Continuing operations

Ergo..................................................................................................................................... 1,809,434

2,076,496

1,764,191

Discontinued operation

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

n/a

n/a

1,240,073

Total ....................................................................................................................................... 1,809,434

2,076,496

3,004,264

Revenue dropped from R2,076 million in fiscal 2013 to R1,809 million in fiscal 2014 mainly due to a 9% drop in gold

production and a 6% drop in the average gold price received. The increase in revenue from continuing operations in fiscal 2013
was due to an 8% increase in throughput from the Crown/Ergo pipeline which was operational for the whole of fiscal 2013 and a
9% increase in the rand dollar gold price.

Gold production

The following table analyzes the production for the periods under review for continuing and discontinued operations:

Year ended June 30

2014

2013

2012

Ounces

Kilograms

Ounces

Kilograms

Ounces

Kilograms

Continuing operations

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

132,909

4,134

146,381

4,553

135,708

4,221

Discontinued operation

Blyvoor

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

-

-

-

-

96,645

3,006

Surface operations .....................................

-

-

-

-

23,597

734

Underground

operations

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

-

-

-

-

73,048

2,272

Total production ...........................................

132,909

4,134

146,381

4,553

232,353

7,227

Our total gold production as well as production from our continuing operations during fiscal 2014 decreased by 13,472

ounces, or 9%, to 132,909 ounces from 146,381 ounces produced in fiscal 2013 due to lower than expected recoveries in the FFG
circuit as well as production in the FFG being temporarily suspended to introduce a number of engineering upgrades and to revisit
its carbon management regime.

For fiscal 2013, our total gold production decreased by 85,972 ounces, or 37%, to 146,381 ounces from 232,353 ounces

produced in fiscal 2012 due to the Blyvoor being sold in late fiscal 2012. At Ergo, total gold production was 10,673 ounces or 8%
higher at 146,381 ounces (fiscal 2012: 135,708 ounces). This reflected a 8% rise in throughput to 23,254,000 tonnes (fiscal 2012:
21,603,000 tonnes) resulting from the completion of the Crown/Ergo pipeline and transport of increased volumes of ore to the
plant.

51

Cash operating costs

1

, all-in sustaining costs and all-in costs per kilogram¹

For fiscal 2014, cash operating costs from continuing and discontinued operations increased to R372,671 per kilogram of

gold from R310,763 per kilogram of gold in fiscal 2013. All-in sustaining costs per kilogram increased to R401,691 per kilogram
of gold in fiscal 2014 from R362,599 per kilogram of gold in fiscal 2013. All-in costs per kilogram increased to R436,503 per
kilogram of gold in fiscal 2014 from R433,669 per kilogram of gold in fiscal 2013. The increase in cash operating costs and all-in
sustaining costs per kilogram were due to lower gold production and above inflation increases in prices of key consumables, labor
and electricity. The increase in the all-in sustaining costs was lower than the increase in cash operating costs reflecting the
decrease in corporate costs. The total all-in costs per kilogram increased despite the decrease in non-sustaining capital relating to
the completion of the flotation and fine-grind project primarily due to the foregoing as well as the R26.5 million capital
recoupment that was in recognised by the head office fiscal 2013 that did not recur in fiscal 2014.

For fiscal 2013, cash operating costs from continuing and discontinued operations increased to R310,763 per kilogram of

gold from R304,912 per kilogram of gold in fiscal 2012. All-in sustaining costs per kilogram increased to R362,599 per kilogram
of gold in fiscal 2013 from R355,571 per kilogram of gold in fiscal 2012. All-in costs per kilogram increased to R433,669 per
kilogram of gold in fiscal 2013 from R391,732 per kilogram of gold in fiscal 2012. The increase in cash operating costs and all-in
sustaining costs per kilogram of gold produced in fiscal 2013 was due to above inflation increases in prices of key consumables,
labor and electricity and, for all-in sustaining costs, the increase in corporate costs relating to a new business unit aimed
specifically at researching new business opportunities.. The increase in all-in costs per kilogram was primarily due to the
foregoing and the non-recurring increase in non-sustaining capital relating to the flotation and fine-grind project, offset by a
R26.5 million capital recoupment.

Ergo's cash operating costs for fiscal 2014 increased to R372,671 per kilogram of gold from R310,763 per kilogram of gold

in fiscal 2013. All-in sustaining costs per kilogram increased to R395,278 per kilogram of gold in fiscal 2014 from R359,166 per
kilogram of gold in fiscal 2013. All-in costs per kilogram decreased to R425,001 per kilogram of gold in fiscal 2014 from R426,546
per kilogram of gold in fiscal 2013. The increase in cash operating costs and all-in sustaining costs per kilogram were due to lower
gold production and above inflation increases in prices of key consumables, labor and electricity. The increase in the all-in
sustaining costs was lower than the increase in cash operating costs reflecting the decrease in corporate costs. The all-in costs per
kilogram decreased despite the increased outlined above due to the significant decrease in non-sustaining capital relating to the
completion of the flotation and fine-grind project.

Ergo's cash operating costs for fiscal 2013 increased to R310,763 per kilogram of gold from R272,779 per kilogram of gold

in fiscal 2012. All-in sustaining costs per kilogram increased to R359,166 per kilogram of gold in fiscal 2013 from R317,884 per
kilogram of gold in fiscal 2012. All-in costs per kilogram increased to R426,546 per kilogram of gold in fiscal 2013 from R360,466
per kilogram of gold in fiscal 2012. The increase in cash operating costs and all-in sustaining costs per kilogram were due to above
inflation increases in prices of key consumables, labor and electricity and, for all-in sustaining costs, the increase in corporate
costs relating to a new business unit aimed specifically at researching new business opportunities. The increase in all-in costs per
kilogram was primarily due to the foregoing and to the non-recurring increase in non-sustaining capital expenditure relating to the
flotation and fine-grind project.

Reconciliation of cash operating costs per kilogram, all-in sustaining costs per kilogram, all-in costs per kilogram and capital
expenditure (cash)

Cash operating costs include costs for all mining, processing, administration, royalties and production taxes, but exclude

depreciation, depletion and amortization, rehabilitation, retrenchment costs and corporate administration costs. Cash operating
costs per kilogram are calculated by dividing cash operating costs by kilograms of gold produced. Cash operating costs per
kilogram have been calculated on a consistent basis for all periods presented.

All-in sustaining costs per kilogram is a measure on which guidance was provided by the World Gold Council and

include cash operating costs of production plus, on-site general and administrative costs, royalties and production taxes, sustaining
capital, sustaining exploration, the accretion of rehabilitation costs, but excludes depreciation, retrenchment costs, finance costs,
depletion and amortization, reclamation and closure costs. All-in sustaining costs per kilogram are calculated by dividing all-in
sustaining costs by kilograms of gold produced. All-in sustaining costs per kilogram have been calculated on a consistent basis for
all periods presented.

1

Cash operating costs, all-in sustaining costs and all-in costs per kilogram are non-IFRS financial measures of performance that we use to

determine cash generating capacities of the mines and to monitor performance of our mining operations.

52

All-in costs per kilogram is a measure on which guidance were provided by the World Gold Council and include total

operating costs, plus all-in sustaining costs, non-sustaining capital costs relating to projects, retrenchment costs, capital
recoupment relating to non-sustaining capital, ongoing rehabilitation expenditure, and non-operating costs, but exclude taxation,
minority interest, finance costs, profit or loss from associates and the cumulative effect of accounting adjustments. All-in costs per
kilogram are calculated by dividing all-in costs by kilograms of gold produced. All-in costs per kilogram have been calculated on
a consistent basis for all periods presented.

Cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram are non-IFRS

financial measures that should not be considered by investors in isolation or as alternatives to operating costs, net profit/(loss)
attributable to equity owners of the parent, profit/(loss) before tax and other items or any other measure of financial performance
presented in accordance with IFRS or as an indicator of our performance. While the World Gold Council provided guidance for
the calculation of cash operating costs, the calculation of cash operating costs per kilogram, all-in sustaining costs and all-in 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. However, we believe that cash operating costs per kilogram,
all-in sustaining costs per kilogram and all-in costs per kilogram are useful indicators to investors and our management of an
individual mine's performance and of the performance of our operations as a whole as they provide:

· an indication of a mine’s profitability and efficiency;
· trends in costs;
· a measure of a mine's margin per kilogram, by comparison of the cash operating costs per kilogram by mine to the price
   of gold; and
· a benchmark of performance to allow for comparison against other mines and mining companies.

Capital expenditure (cash) is the actual cash flow for the particular fiscal period as taken from the statement of cash flows

for additions to property, plant and equipment under investing activities.

A reconciliation of cash operating costs to operating costs as per our operating segment, all-in sustaining costs and all-in

costs for each of the years ended June 30, 2014, 2013 and 2012 is presented below. We have also provided below details of the
amount of gold produced by each mine for each of those periods.

53

For the year ended June 30, 2014
(in R'000, except as otherwise noted)

Continuing Operations

Discontinued

operation

1

Ergo

ERPM

2

Other

2

Total

Total

Operating costs ..........................................................................

1,582,936

15,364

-

1,598,300

-

1,598,300

Ongoing rehabilitation expenditure ...........................................

(29,973)

-

-

(29,973)

-

(29,973)

Care and maintenance costs .......................................................

-

(15,364)

-

(15,364)

-

(15,364)

Other operating expenses ...........................................................

(12,341)

-

-

(12,341)

-

(12,341)

Cash operating costs

3

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

1,540,622

-

-

1,540,622

-

1,540,622

Movement in gold in process ....................................................

8,828

-

-

8,828

-

8,828

Net operating costs

1,549,450

-

-

1,549,450

-

1,549,450

Plus:

Administration expenses, general costs and other ..................

62,330

1,567

27,549

91,446

-

91,446

Movement in provision for environmental
rehabilitation ............................................................................

(82,281)

(4,324)

-

(86,605)

-

(86,605)

Unwinding of rehabilitation provision ....................................

36,300

1,719

-

38,019

-

38,019

Sustaining capital .....................................................................

68,279

-

-

68,279

-

68,279

All-in sustaining costs ..............................................................

1,634,078

(1,038)

27,549

1,660,589

-

1,660,589

Plus:

Retrenchment costs ..................................................................

1,074

1,086

4,588

6,748

-

6,748

Care and maintenance costs ....................................................

-

15,364

-

15,364

-

15,364

Ongoing rehabilitation expenditure ........................................

29,973

-

-

29,973

-

29,973

Capital recoupment ..................................................................

(1,276)

-

-

(1,276)

-

(1,276)

Non-sustaining capital .............................................................

93,106

-

-

93,106

-

93,106

All-in costs .................................................................................

1,756,955

15,412

32,137

1,804,504

-

1,804,504

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

132,909

-

-

132,909

-

132,909

Gold produced (kilograms) ........................................................

4,134

-

-

4,134

-

4,134

Cash operating costs per kilogram (R per kilogram) ................

372,671

-

-

372,671

-

372,671

All-in sustaining costs per kilogram (R per kilogram) .............

395,278

-

-

401,691

-

401,691

All-in costs per kilogram (R per kilogram) ...............................

425,001

-

-

436,503

-

436,503

1

In fiscal 2014 we had no discontinued operations.

2

Relates to other non-core operating entities within the Group and is included under ‘Corporate office and other reconciling items’ in our segmental reporting.

3

Cash operating costs equate to cash operating costs of production.

54

For the year ended June 30, 2013
(in R'000, except as otherwise noted)

Continuing Operations

Discontinued

operation

1

Ergo

ERPM

2

Other

2

Total

Total

Operating costs ..........................................................................

1,477,188

20,251

-

1,497,439

-

1,497,439

Ongoing rehabilitation expenditure ...........................................

(45,444)

-

-

(45,444)

-

(45,444)

Care and maintenance costs .......................................................

-

(20,251)

-

(20,251)

-

(20,251)

Other operating expenses ...........................................................

(16,480)

-

-

(16,480)

-

(16,480)

Cash operating costs

3

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

1,414,904

-

-

1,414,904

-

1,414,904

Movement in gold in process ....................................................

(17,727)

-

-

(17,727)

-

(17,727)

Net operating costs

1,397,177

-

-

1,397,177

-

1,397,177

Plus:

Administration expenses, general costs and other ..................

75,358

8,382

16,917

100,657

-

100,657

Movement in provision for environmental
rehabilitation ............................................................................

35,694

22

(20,382)

15,334

-

15,334

Unwinding of rehabilitation provision ....................................

31,982

1,555

-

33,537

-

33,537

Sustaining capital .....................................................................

95,071

9,052

86

104,209

-

104,209

All-in sustaining costs ..............................................................

1,635,282

19,011

(3,379)

1,650,914

-

1,650,914

Plus:

Retrenchment costs ..................................................................

-

-

565

565

-

565

Care and maintenance costs ....................................................

-

20,251

-

20,251

-

20,251

Ongoing rehabilitation expenditure ........................................

45,444

-

-

45,444

-

45,444

Capital recoupment ..................................................................

(131)

(11,356)

(15,000)

(26,487)

-

(26,487)

Non-sustaining capital .............................................................

260,903

-

22,904

283,807

-

283,807

All-in costs .................................................................................

1,941,498

27,906

5,090

1,974,494

-

1,974,494

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

146,381

-

-

146,381

-

146,381

Gold produced (kilograms) ........................................................

4,553

-

-

4,553

-

4,553

Cash operating costs per kilogram (R per kilogram) ................

310,763

-

-

310,763

-

310,763

All-in sustaining costs per kilogram (R per kilogram) .............

359,166

-

-

362,599

-

362,599

All-in costs per kilogram (R per kilogram) ...............................

426,422

-

-

433,669

-

433,669

1

In fiscal 2013 we had no discontinued operations.

2

Relates to other non-core operating entities within the Group and is included under ‘Corporate office and other reconciling items’ in our segmental reporting.

3

Cash operating costs equate to cash operating costs of production.

55

For the year ended June 30, 2012
(in R'000, except as otherwise noted)

Continuing Operations

Discontinued

operation

Ergo

1

ERPM

2

Other

2

Total

Blyvoor

3

Total

Operating costs ..........................................................................

1,193,871

37,001

148

1,231,020

1,061,770

2,292,790

Ongoing rehabilitation expenditure ...........................................

(39,445)

(7,702)

(148)

(47,295)

(990)

(48,285)

Care and maintenance costs .......................................................

-

(29,299)

-

(29,299)

-

(29,299)

Other operating expenses ...........................................................

(3,026)

-

-

(3,026)

(8,583)

(11,609)

Cash operating costs

4

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

1,151,400

-

-

1,151,400

1,052,197

2,203,597

Movement in gold in process ....................................................

(9,427)

-

-

(9,427)

(5,283)

(14,710)

Net operating costs

1,141,973

-

-

1,141,973

1,046,914

2,188,887

Plus:

Administration expenses, general costs/(income) and other ..

68,792

10,636

30,252

109,680

25,613

135,293

Movement in provision for environmental
rehabilitation ............................................................................

48,292

9,861

1,333

59,486

(301)

59,185

Unwinding of rehabilitation provision ....................................

5,153

928

-

6,081

1,211

7,292

Sustaining capital .....................................................................

77,578

25

18,513

96,116

82,939

179,055

All-in sustaining costs ..............................................................

1,341,788

21,450

50,098

1,413,336

1,156,376

2,569,712

Plus:

Retrenchment costs ..................................................................

-

-

-

-

43,747

43,747

Care and maintenance costs ....................................................

-

29,299

-

29,299

-

29,299

Ongoing rehabilitation expenditure ........................................

39,445

7,702

148

47,295

990

48,285

Capital recoupment ..................................................................

-

(287)

-

(287)

-

(287)

Non-sustaining capital ............................................................ .

140,294

-

-

140,294

-

140,294

All-in costs .................................................................................

1,521,527

58,164

50,246

1,629,937

1,201,113

2,831,050

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

135,708

-

-

135,708

96,645

232,353

Gold produced (kilograms) ........................................................

4,221

-

-

4,221

3,006

7,227

Cash operating costs per kilogram (R per kilogram) ................

272,779

-

-

272,779

350,032

304,912

All-in sustaining costs per kilogram (R per kilogram) .............

317,884

-

-

334,834

384,689

355,571

All-in costs per kilogram (R per kilogram) ...............................

360,466

-

-

386,149

399,572

391,732

1

Ergo include Ergo, ErgoGold, Crown and ERPM’s surface Cason operation.

2

Relates to other non-core operating entities within the Group and is included under ‘Corporate office and other reconciling items’ in our segmental reporting.

3

Blyvoor was sold on June 1, 2012, and has been classified as a discontinued operation. Comparable prior year numbers have been adjusted to distinguish between continuing- and discontinued operations where

relevant.

4

Cash operating costs equate to cash operating costs of production.

56

Capital expenditure (cash)

During fiscal 2014, total additions to property, plant and equipment (cash) was R158.6 million, compared to

R368.5 million in fiscal 2013, a decrease of 57%. Additions to property, plant and equipment decreased primarily as a result of the
construction of the new flotation and fine-grind project being completed. In fiscal 2014, Ergo spent R89.5 million on the flotation
and fine-grind project, R32.4 million on Reclamation site 4A6, R6.2 million on rehabilitation of the Brakpan Tailings Dam and R
26.7 million on other capital items.

During fiscal 2013, total additions to property, plant and equipment (cash) was R368.5 million, compared to

R319.1 million in fiscal 2012, an increase of 15%. Additions to property, plant and equipment increased primarily as a result of
the new flotation and fine-grind project. In fiscal 2013, Ergo spent R261.5 million on the flotation and fine-grind project,
R11.7 million on the Brakpan TSF, R20.5 million on the Cason high grade plant, R30.4 million on the Angelo Pan reclamation
and pipeline, R26.3 million on infrastructure upgrades and R5.5 million on other equipment. For a detailed summary of capital
expenditure, see Item 4D.: “ Property, Plant and Equipment”.

Subsequent to June 30, 2014 and up to September 30, 2014 we spent R16.1 million on additions to property, plant and

equipment relating mainly to:

· The Rondebult sewerage water project amounting to R4.4 million, the Knights residue line amounting to R2.2 million, the
   refurbishment of the No. 3 tailings thickener amounting to R3.6 million, residue linear screens amounting to R1.7 million
   and various other capital items amounting to R4.2 million.

Ore Reserves

As at June 30, 2014, our Ore Reserves were estimated at 1.5 million ounces, as compared to 1.7 million ounces at

June 30, 2013, representing a 9% decrease. The decrease was mainly due to depletion. As at June 30, 2012, our Ore Reserves were
estimated at 1.8 million ounces resulting in a 6% decrease during fiscal 2013 due to depletion.

We seek to increase our attributable Ore Reserves through exploration and to acquire additional new Ore Reserves.

Year ended June 30,

2014

2013

2012

Ounces

Kilograms

Ounces

Kilograms

Ounces

Kilograms

‘000

‘000

‘000

Continuing operations

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

1,524

47,389

1,676

52,127

1,825

56,961

Discontinued operation

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

-

-

-

-

-

-

Total Ore Reserves ......................................

1,524

47,389

1,676

52,127

1,825

56,961

After the restructuring, Ergo's 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. Crown's Ore reserves have also been included under Ergo.

Our Ore Reserves presented in Item 4B.: “Business Overview” and above are prepared using three year average gold prices

at the time of reserve determination for each year presented. For purposes of our financial statements, depreciation and impairment of
property, plant and equipment is determined based upon our "recoverable minerals", which means Proven and Probable Ore
Reserves, which are calculated using our life of mine business plans and the gold price at the end of each financial year.

57

Application of critical accounting policies

Some of our significant accounting policies require the application of significant judgment by management in selecting the

appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of
uncertainty and are based on our historical experience, terms of existing contracts, management's view on trends in the gold mining
industry and information from outside sources.

Management believes the following critical accounting policies involve the more significant judgments and estimates used

in the preparation of our consolidated financial statements and could potentially impact our financial results and future financial
performance:

· Property, plant and equipment
· Impairment of property, plant and equipment
· Deferred income and mining taxes
· Future environmental rehabilitation costs
· Financial instruments

Management has discussed the development and selection of each of these critical accounting policies with the Board of

Directors and the Audit Committee, both of which have approved and reviewed the disclosure of these policies. Our significant
accounting policies relating to our accounting estimates and judgments are described in more detail in note 1 to the consolidated
financial statements. Refer to Item 18 “Financial statements’’. This discussion and analysis should be read in conjunction with the
consolidated financial statements and related notes included in Item 18 “Financial statements’’.

Property, plant and equipment

Actual expenditures incurred for mineral property interests, mine development costs, mine plant facilities and equipment are

capitalized to the specific mine to which the cost relates. Depreciation is calculated on a mine-by-mine basis using the units of
production method. Other assets are depreciated using the straight-line method over the expected life of these assets. Under the units
of production method, we estimate the depreciation rate based on actual production over total Proven and Probable Ore Reserves of
the particular mine, which are calculated using our life of mine business plans and a gold price at the end of each financial year.
This rate is then applied to actual costs capitalized to date to arrive at the depreciation expense for the period. Proven and Probable
Ore Reserves of the particular mine reflect estimated quantities of economically and legally recoverable reserves. Changes in
management’s estimates of the quantities of economically recoverable reserves impact depreciation on a prospective basis. The
estimate of the total reserves of our mines could be materially different from the actual gold mined due to changes in the factors used
in determining our Ore Reserves, such as the gold price, foreign currency exchange rates, labor costs, engineering evaluations of
assay values derived from sampling of drill holes and other openings. Any change in management’s estimate of the total Proven and
Probable Ore Reserves would impact the depreciation charges recorded in our consolidated financial statements. The prevailing
market price of gold at the end of the financial year was R408,381, R378,158 and R447,235 per kilogram for the fiscal years
ended June 30, 2012, 2013 and 2014, respectively.

Impairment of property, plant and equipment

The carrying amounts of assets, other than inventories and deferred tax assets are reviewed at each reporting date to

determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. Future cash flows are estimated based on
quantities of recoverable minerals, expected gold prices, production levels and cash operating costs of production, all based on life
of mine business plans. Refer to Item 4B Business Overview “Ore Reserves’’. For the purpose of impairment testing, assets are
grouped together into the smallest group of assets which generates cash inflows from continuing use that is largely independent of the
cash inflows of other assets or groups of assets, or the cash-generating unit. An impairment loss is recognized directly against the
carrying amount of the asset whenever the carrying amount of an asset, or its cash generating unit, exceeds its recoverable amount.
Impairment losses are recognized in profit or loss.

The recoverable amount of property, plant and equipment is generally determined utilizing discounted future cash flows. We

also consider such factors as our market capitalization, the quality of the individual ore body and country risk in determining the
recoverable amount. During fiscal 2014, R12.4 million (fiscal 2013: R61.0 million and fiscal 2012: Rnil) was recorded as an
impairment at a specific asset level.

58

In fiscal 2014, we calculated the recoverable amount based on updated life-of-mine business plans, an estimated gold price

of R453,121 per kilogram in year one escalating at 7.2% per annum, and a discount rate of 26.3%. With a 10% reduction in the gold
price an impairment of R894.2 million would be raised, or at an increase in the discount rate of 4.7 percentage points (18%) to 31.0%,
the group would begin impairment of the mining assets.

The R12.4 million impairment in fiscal 2014 was against Ergo's property, plant and equipment (exploration assets). The

R61.0 million impairment in fiscal 2013, consisted of R52.4 million against Ergo's property, plant and equipment (R40.0 million for
surface dumps and R12.4 million for plant equipment) and R8.6 million against ERPM’s plant equipment.

Deferred income and mining taxes

Deferred taxation is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary
differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it
is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary
differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to
the temporary differences, based on the expected manner of realization or settlement of the carrying amount of assets and liabilities,
and based on the laws that have been enacted or substantively enacted by the reporting date.

The amount recognized as a deferred tax asset is generally determined utilizing discounted future cash flows. We consider

all factors that could possibly affect the probability that future taxable profit will be available against which unused tax credits can be
utilized. These factors included profitability of the operations and an estimate of the gold price. The amount recognized as a deferred
tax asset is sensitive to the current gold spot price. As at June 30, 2014 we recognized a deferred tax asset of R1.4 million (June 30,
2013: R2.9 million and 2012: R38.3 million).

Future environmental rehabilitation costs

The decommissioning provision for environmental rehabilitation represents the cost that will arise from rectifying damage

caused before production commenced. Accordingly an asset is recognized and included within mining properties. Provisions for
environmental rehabilitation are provided at the present value of the expenditures expected to settle the obligation, using estimated
cash flows based on current prices. The unwinding of the obligation is included in profit or loss. Estimated future costs of
environmental rehabilitation are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or
technology. Changes in estimates are capitalized or reversed against the related asset but taken to profit or loss if there is no related
asset left. Gains or losses from the expected disposal of assets are not taken into account when determining the provision.

Estimated provisions for environmental rehabilitation, comprising pollution control rehabilitation and mine closure, are

based on our environmental management plans in compliance with current technological, environmental and regulatory requirements.
An average discount rate of 8.3%, average inflation rate of 6.0% and expected life of mines according to the life-of-mine plans were
utilized in the calculation of the estimated net present value of the rehabilitation liability (fiscal 2013: average discount rate of 7.6%,
average inflation rate of 5.4% and fiscal 2012: average discount rate of 7.3%, average inflation rate of 5.4%). During fiscal 2014
there was a net increase in the provision of R10.2 million which was capitalized to property, plant and equipment for Ergo, and a
reduction amounting to R14.2 million for rehabilitation costs incurred. During fiscal 2013 there was a net decrease in the provision of
R6.4 million which was credited to property, plant and equipment for Ergo, and a reduction amounting to R22.5 million for
rehabilitation costs incurred. During fiscal 2012 there was a net increase in the provision of R13.4 million which was capitalized to
property, plant and equipment for Ergo, representing an increase in its respective footprints and a reduction amounting to R19.8
million for rehabilitation costs incurred). As a result of the disposal of Blyvoor the provision for environmental rehabilitation
decreased by R46.0 million in fiscal 2012.

The restoration provision for environmental rehabilitation represents the costs of restoring site damage after the start of

production. Increases in the provision are recognized in profit or loss as a cost of production. Gross restoration liabilities are
estimated at the present value of the expenditures expected to settle the obligation.

A benefit to profit or loss amounting to R86.6 million was recognised resulting from a decrease in the estimated cost to

rehabilitate. This is based on the implementation of a different technique to vegetate the Crown complex as well as the increased use
of “grey water” in rehabilitation. An updated survey and work performed during the year resulted in a decrease of the area to be
vegetated. Charges to profit or loss for the environmental rehabilitation of R15.3 million and R59.2 million were raised in fiscal 2013
and 2012 respectively. Unwinding of the provisions amounting to R38.0 million, R33.5 million and R7.3 million were recorded in
fiscal 2014, 2013 and 2012, respectively.

In South Africa, annual contributions are made to dedicated Rehabilitation Trust Funds and investments in funds held in

insurance instruments, which are to be used to fund the estimated cost of rehabilitation during and at the end of the life of the relevant
mine.

59

Financial instruments

Financial instruments recognized on the statement of financial position include investments, trade and other receivables,

cash and cash equivalents, long- and short-term interest-bearing borrowings, trade and other payables, and bank overdrafts.
Financial instruments are initially recognized at fair value and include any directly attributable transaction costs, except those
financial instruments measured at fair value through profit or loss.

If the value of the financial instrument cannot be obtained from an active market, we have established fair value by using

valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis and option pricing models, refined to reflect the issuer’s specific
circumstances. Listed shares are measured at fair value based on the market close price at the reporting date and applying a
discount factor for liquidity constraints pertaining to the relevant listed shares.

Following the adoption of a new Enterprise Resource Planning (ERP) system in 2013, Rand Refinery experienced

implementation difficulties which led to a difference between the actual inventory and the accounting records of approximately 87
000oz of gold. Due to the uncertainty around Rand Refinery’s inventory and the time it is taking to resolve this matter, the group
has assumed that the 87 000oz gold shortfall will not be recovered. The shareholders of Rand Refinery have offered financial
support in the form of an irrevocable subordinated loan of up to R1.2 billion (the “facility”). Rand Refinery can only draw on the
Facility when there is confirmation that an actual gold shortfall exists. For the time being, DRDGOLD declined the option to
provide funding on a pro-rate basis with other shareholders. Should it elect not provide such funding, its shareholding will be
diluted, if other shareholders provide funding. Management therefore estimated the fair value of the investment in Rand Refinery
shares as zero. The accumulated revaluations recognised in Other Comprehensive Income (R53.2 million) has been derecognised
and the initial cost of the investment (R40.2 million) has been recognised as an impairment in profit or loss for the year.

Operating results

Comparison of financial performance for the fiscal year ended June 30, 2014 with fiscal year ended June 30, 2013

Revenue

The following table illustrates the year-on-year change in revenue by evaluating the contribution of continuing and

discontinued operations to the total change on a group basis for fiscal 2014 in comparison to fiscal 2013:

Impact of change in volume

R’000

Total

revenue

2013

Disposals

Internal

growth/

(decline)

Impact of

change in

price

Net change

Total

revenue

2014

Ergo

1

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

2,076,496

-

(161,244)

(105,817)

(267,062)

1,809,434

Total Operations .......................

2,076,496

-

(161,244)

(105,817)

(267,062)

1,809,434

Revenue for fiscal 2014 decreased by R267.1 million, or 12.8%, to R1,809.4 million. The decrease in revenue is mainly

due to a 6% decrease in the average rand gold price received amounting to R432,775 per kilogram and a 9% decrease in gold
produced from continuing operations.

Net operating costs

The following table illustrates the year-on-year change in net operating costs by evaluating the contribution of continuing

and discontinued operations to the total change on a group basis for fiscal 2014 in comparison to fiscal 2013:

Impact of change in volume

R’000

Net

operating

costs

2013

Disposals

Internal

growth/

(decline)

Impact of

change in

costs

Net change

Net

operating

costs

2014

Ergo

1

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

1,397,177

-

(128,578)

280,851

152,273

1,549,400

Total ............................................

1,397,177

-

(128,578)

280,851

152,273

1,549,400

Operating costs are linked directly to the level of production of a specific fiscal year. Operating costs in fiscal 2014

increased by 11% to R1,549.4 million compared to operating costs of R1,397.2 million in fiscal 2013 due to lower gold
production and above inflation increases in prices of key consumables, labor and electricity.

1

Due to the restructuring on July 1, 2012 ErgoGold, Ergo Mining, Crown and the surface retreatment operation of ERPM have all been

transferred into Ergo Mining. However, this did not result in a change in the Ergo operating segment.

60

The following table lists the major components of operating costs for each of the fiscal years set forth below:

Years ended June 30,

Costs

2014

2013

Labor .................................................................................................................................................

17%

17%

Specialized service providers ..........................................................................................................

15%

19%

Consumables and other ...................................................................................................................

50%

46%

Electricity and water ........................................................................................................................

18%

18%

Rehabilitation provision and amounts contributed to environmental trust funds

As of June 30, 2014, we estimate our total rehabilitation provision, being the discounted estimate of future costs, to be

R471.7 million as compared to R524.3 million at June 30, 2013. The decrease in the provision for environmental rehabilitation in
fiscal 2014 was due a R14.2 million reduction in the provision resulting from rehabilitation work conducted during fiscal 2014,
changes in discount and inflation rate assumptions as well as changes in the planned rehabilitation techniques to be applied
supplemented by the increased use of "grey water" in rehabilitation. These decreases were offset by additional environmental damage
incurred due to continuing operations. In fiscal 2014, a benefit of R86.6 million (fiscal 2013: expense of R15.3 million) and the
unwinding of the provision of R38.0 million (fiscal 2013: R33.5 million) was recorded in profit / loss.

A total of R90.9 million was invested in our various environmental trust funds as at the end of fiscal 2014, as compared

to R86.4 million for fiscal 2013. The increase is attributable to R4.6 million interest received on these funds during fiscal 2014. A
total of R93.7 million are invested in funds held in insurance instruments to provide financial guarantees provided to the DMR
through an insurance cell captive company, the Guardrisk Cell Captive. As at June 30, 2014 guarantees amounting to R305.7
million were issued to the DMR. Subsequent to June 30, 2014 an additional guarantee amounting to R98.2 million was issued to the
DMR. The shortfall between the invested funds and the estimated provisions is expected to be financed by ongoing contributions
to the Guardrisk Cell Captive, over the remaining production life of the respective mining operations, the proceeds on the disposal
of remaining assets and gold from plant clean-up.

Depreciation

Depreciation charges were R160.0 million for fiscal 2014 compared to R143.8 million for fiscal 2013. The increase was

mainly attributable to the completion of the FFG project during December 2013 after which date depreciation commenced.

Retrenchment costs

Retrenchment costs increased to R6.8 million in fiscal 2014 from R0.6 million in fiscal 2013. These costs were incurred

due to the restructure of the executive and senior management with a view to right-sizing the corporate footprint and reducing
costs.

Impairments

In fiscal 2014, an impairment amounting to R56.6 million was recognized. The impairment consisted of R12.4 million

against property, plant and equipment at a specific asset level, R46.9 million against our investment in Rand Refinery and Village
Main Reef. These were offset by a reversal of impairment of R2.7 million on equity accounted investments.

Administration expenses and general costs

The administration expenses and general costs increased in fiscal 2014 to R78.1 million from R64.5 million in fiscal

2013, an increase of R13.6 million. In fiscal 2014 administration expenses and general costs included a non-recurring gain on
disposal of property amounting to R0.9 million (2013: R19.2 million).

Finance income

Finance income decreased from R66.0 million in fiscal 2013 to R28.0 million in fiscal 2014. The decrease was mainly

due to dividends received from available-for-sale financial assets in fiscal 2013, amounting to R32.5 million and a decrease of
R8.3 million in interest received on lower cash balances.

61

Finance expenses

Finance expenses increased from R42.0 million in fiscal 2013 to R52.3 million in fiscal 2014. The increase was mainly

attributable to the unwinding of the rehabilitation provision amounting to R38.0 million in fiscal 2014 compared to R33.5 million
in fiscal 2013 and a decrease in borrowing costs capitalized from R10.9 million in fiscal 2013 to R3.5 million in fiscal 2014. In
addition, the interest paid on the Domestic Medium Term Note Program (see Item 5B. “Liquidity and Capital Resources –
Borrowings and Funding”) decreased with the decrease in borrowings from R167.6 million in fiscal 2013 to R148.7 million in
fiscal 2014.

Share of losses of equity accounted investments

The R0.3 million share of losses of equity accounted investments relate to impairments of the remaining current assets

recognised at Chizim Gold level. On June 30, 2013 Chizim Gold (Pvt) Limited stopped conducting feasibility studies on certain
exploration tenements in Zimbabwe. On this date the group impaired its non-current exploration assets in full through its share of
the equity accounted losses of the investee amounting to R50.1 million.

Income tax

The net tax charge of R17.6 million for fiscal 2014 consisted of current tax of R6.4 million, mostly relating to non-

mining income earned by the group, and a deferred tax charge of R11.1 million, mostly relating to mining income despite the loss
before tax due to significant non-deductable expenditure in the form of impairments recognised as well as losses incurred for
which no deferred tax can be recognised.

The net tax charge of R60.9 million for fiscal 2013 consisted of a current tax charge of R4.2 million, mostly relating to

non-mining income earned by the group, and a deferred tax charge of R56.7 million relating to mining income which was
somewhat offset by significant non-deductable expenditure in the form of impairments recognised as well as losses incurred for
which no deferred tax can be recognised.

Comparison of financial performance for the fiscal year ended June 30, 2013 with fiscal year ended June 30, 2012

Revenue

The following table illustrates the year-on-year change in revenue by evaluating the contribution of each segment to the

total change on a group basis for fiscal 2013 in comparison to fiscal 2012:

Impact of change in volume

R’000

Total

revenue

2012

Disposals

Internal

growth/

(decline)

Impact of

change in

price

Net change

Total

revenue

2013

Ergo

1

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

1,764,191

-

138,761

173,544

312,305

2,076,496

Blyvoor

2

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

1,240,073

(1,240,073)

-

-

(1,240,073)

-

Total Operations .......................

3,004,264

(1,240,073)

138,761

173,544

(927,768)

2,076,496

Revenue for fiscal 2013 decreased by R927.8 million, or 31%, to R2,076.5 million, mainly due to the disposal of Blyvoor

on June 1, 2012. The increase in revenue for Ergo was largely due to a 9% increase in the average rand gold price received
amounting to R458,084 per kilogram and an 8% increase in gold produced from continuing operations.

Net operating costs

The following table illustrates the year-on-year change in net operating costs by evaluating the contribution of each

segment to the total change on a group basis for fiscal 2013 in comparison to fiscal 2012:

Impact of change in volume

R’000

Net

operating

costs

2012

Disposals

Internal

growth/

(decline)

Impact of

change in

costs

Net change

Net

operating

costs

2013

Ergo

1

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

1,141,973

-

89,821

165,383

255,204

1,397,177

Blyvoor

2

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

1,046,914

(1,046,914)

-

-

(1,046,914)

-

Total ............................................

2,188,887

(1,046,914)

89,821

165,383

(791,710)

1,397,177

1

Due to the restructuring on July 1, 2012 ErgoGold, Ergo Mining, Crown and the surface retreatment operation of ERPM have all been

transferred into Ergo Mining. However, this did not result in a change in the Ergo operating segment.

2

Blyvoor was sold on June 1, 2012.

62

Operating costs are linked directly to the level of production of a specific fiscal year. Operating costs in fiscal 2013

decreased by 36% to R1,397.2 million compared to operating costs of R2,188.9 million in fiscal 2012. This decrease was mainly
as a result of the disposal of Blyvoor on June 1, 2012.

The following table lists the major components of operating costs for each of the years set forth below:

Years ended June 30,

Costs

2013

2012

Labor .................................................................................................................................................

17%

32%

Specialized service providers ..........................................................................................................

19%

12%

Consumables and other ...................................................................................................................

46%

37%

Electricity and water ........................................................................................................................

18%

19%

Rehabilitation provision and amounts contributed to environmental trust funds

As of June 30, 2013, we estimate our total rehabilitation provision, being the discounted estimate of future costs, to be

R524.3 million as compared to R504.3 million at June 30, 2012. The increase in the provision for environmental rehabilitation in
fiscal 2013 was due to changes in discount and inflation rate assumptions, changes in estimates resulting from changes to the life-of-
mines and additional environmental damage incurred which was off-set by a R22.5 million reduction in the provision resulting from
rehabilitation work conducted during fiscal 2013. In fiscal 2013, an expense of R15.3 million (fiscal 2012: R59.2 million) and the
unwinding of the provision of R33.5 million (fiscal 2012: R7.3 million) was recorded in profit or loss.

A total of R86.4 million was invested in our various environmental trust funds as at the end of fiscal 2013, as compared

to R104.5 million for fiscal 2012. The decrease is attributable to the derecognition of the DRDGOLD rehabilitation trust fund,
amounting to R25.6 million, due to the relinquishment of the fund to the buyer of the relating mining rights over the Durban
Roodepoort Deep mine area. The decrease was partially offset by a R5.6 million increase for interest received on these funds
during fiscal 2013. A total of R88.6 million was invested in funds held in insurance instruments to provide financial guarantees to
the DMR through an insurance cell captive company, the Guardrisk Cell Captive. As at June 30, 2013 guarantees amounting to
R305.7 million were issued to the DMR. The shortfall between the invested funds and the estimated provisions is expected to be
financed by ongoing contributions to the Guardrisk Cell Captive, over the remaining production life of the respective mining
operations, the proceeds on the disposal of remaining assets and gold from plant clean-up.

Depreciation

Depreciation charges were R143.8 million for fiscal 2013 compared to R120.9 million for fiscal 2012. The increase was

mainly attributable to the completion of the Crown/Ergo pipeline project during May 2012, which was depreciated for a full year
in fiscal 2013.

Retrenchment costs

Retrenchment costs decreased to R0.6 million in fiscal 2013 from R43.7 million in fiscal 2012. In fiscal 2012, these costs

related to the closure of the Number 4 and 6 shafts at Blyvoor, resulting in the retrenchment of 1,542 employees.

Impairments

In fiscal 2013, an impairment amounting to R187.9 million was recognized. The impairment consisted of R61.0 million

against property, plant and equipment at a specific asset level, R101.3 million against our investment in Village and R25.6 million
for the derecognition of the DRDGOLD rehabilitation trust fund.

Administration expenses and general costs

The administration expenses and general costs decreased in fiscal 2013 to R64.5 million from R133.6 million in fiscal

2012, a decrease of R69.1 million. In fiscal 2013, administration expenses and general costs included a non-recurring gain on
disposal of property amounting to R19.3million. In fiscal 2012, administration expenses and general costs included a non-
recurring loss of approximately R9.6 million relating to the loss on the sale of property, plant and equipment.

Finance income

Finance income increased from R33.5 million in fiscal 2012 to R66.0 million in fiscal 2013. The increase was mainly due

to dividends received from available-for-sale financial assets in fiscal 2013, amounting to R32.5 million.

63

Finance expenses

Finance expenses increased from R17.7 million in fiscal 2012 to R42.0 million in fiscal 2013. The increase was mainly

attributable to the unwinding of the rehabilitation provision amounting to R33.5 million in fiscal 2013 compared to R7.3 million
in fiscal 2012. In addition, the interest paid on the Domestic Medium Term Note Program (see Item 5B. “Liquidity and Capital
Resources – Borrowings and Funding”) increased with the increase in borrowings from R30.7 million in fiscal 2012 to R167.6
million in fiscal 2013.

Share of losses of equity accounted investments

On June 30, 2013 Chizim Gold (Pvt) Limited stopped conducting feasibility studies on certain exploration tenements in

Zimbabwe. On this date the group recognised the impairment of the non-current exploration assets through its share of the equity
accounted losses of the investee amounting to R50.1 million.

Income tax

The net tax charge of R60.9 million for fiscal 2013 consisted of a current tax charge of R4.2 million, mostly relating to

non-mining income earned by the group, and a deferred tax charge of R56.7 million relating to mining income which was
somewhat offset by the decrease in deferred tax liability resulting from the impairments recognised and non-deductible expenses.

This compares to a net tax benefit of R1.8 million for fiscal 2012 consisting of a current taxation charge of R0.2 million,

a deferred tax benefit of R6.5 million and secondary tax on companies amounting to R4.5 million. The year-on-year increase in
the net tax charge was mainly due to the increased profitability of Ergo.

64

environmental rehabilitation payments, offset by R12.5 million proceeds on the disposal of property, plant and equipment. A cash
outflow on disposal of subsidiaries of R9.6 million was also realised.

Additions to property, plant and equipment was predominantly on the Crown/Ergo pipeline project, Ore Reserve

development, new infrastructure and new mining equipment at our operations. Significant capital projects for fiscal 2012 included:

o

Ergo spent R33.9 million on the Crown/Ergo pipeline project, R50.7 million on the extension of the Brakpan TSF,
R15.5 million on the refurbishment of the Ergo plant, R38.5 million on the new flotation and fine-grind project,
R49.0 million on infrastructure upgrades and equipment, R14.2 million on the tailings facilities and R16.1 million
to replace old equipment and acquire new equipment.

o

Blyvoor for opening up and development amounting to R50.3 million, equipment replacement amounting to R23.3
million and R9.3 million for other equipment and the tailings facilities.

We anticipate decreasing our additions to property, plant and equipment in fiscal 2015 by about 36% compared to fiscal

2014. We expect to incur R102.5 million on additions to property, plant and equipment for mining equipment, upgrading of
current metallurgical plants and tailings facilities as follows:

· Ergo – R100.5 million; and
· Other – R2.0 million.

Cash flows from financing activities

Net cash outflow from financing activities was R76.6 million in fiscal 2014 compared to a net cash inflow of R5.7 million in

fiscal 2013 and a net cash outflow of R168.6 million in fiscal 2012.

During fiscal 2014, the net cash outflow consisted of R20.0 million repayments of loans and borrowings, R2.7 million share

option buy-out and a dividend payment of R53.1 million.

During fiscal 2013, the net cash inflow consisted of R163.3 million raised through a Domestic Medium Term Note Program,

which was offset by R30.7 million repayments of loans and borrowings, R24.1 million share option buy-out and a dividend payment
of R103.1 million.

During fiscal 2012, the net cash outflow consisted of R96.2 million for repayments of loans and borrowings, R58.2 million

for the acquisition of treasury shares and a dividend payment of R28.9 million, which were offset by proceeds of R13.5 million on
disposal of treasury shares.

Cash and cash equivalents

Cash and cash equivalents as at June 30, 2014 amounted to R208.9 million compared to R376.6 million at the end of fiscal

2013 and R298.0 million at the end of fiscal 2012. This included $1.9 million as at June 30, 2014, $0.6 million as at June 30, 2013
and $1.1 million as at June 30, 2012 which were all sold forward resulting in zero exposure to currency volatility at these dates. The
remainder of the cash and cash equivalent balances were denominated in South African rand. Surplus cash is held in low-risk, high
interest bearing products with various large financial institutions.

Borrowings and funding

Our external sources of capital include the issuance of debt, bank borrowings, loan notes and the issuance of equity

securities, which include the following:

On October 1, 2010 EMO established a R500 million Domestic Medium Term Note Program, or DMTN Program, under

which it could from time to time issue notes. On October 1, 2010, EMO issued R108 million in notes under the DMTN Program
and maturity dates of 12 and 24 months from the date of issue and interest set at the three month JIBAR rate plus a margin ranging
from 4% to 5% per annum. The loan notes with a 12 month maturity, amounting to R78.0 million, were repaid on October 3,
2011. The remaining loan notes with a 24 month maturity, amounting to R30.0 million, were repaid on October 3, 2012. The
EMO DMTN Program was cancelled and has been replaced by the DRDGOLD DMTN Program below.

On July 2, 2012, DRDGOLD established a R2.0 billion DMTN Program under which it may from time to time issue

notes. This DMTN Program replaces the DMTN Program established by EMO on October 1, 2010. In July and September 2012,
DRDGOLD issued R165 million in notes under the DMTN Program and maturity dates of 12, 24 and 36 months from the date of
issue and bearing interest at the three month JIBAR rate plus a margin ranging from 4% to 5% per annum. The loan notes with a
12 and 24 month maturity, amounting to R20.0 million and R69.5 million respectively, were repaid on October 3, 2013 and July
3, 2014 respectively. The remaining loan notes with a 36 month maturity, amounting to R75.5 million, are repayable on July 3,
2015.

65

Anticipated funding requirements and sources

At June 30, 2014, we had cash and cash equivalents of R208.9 million, and positive working capital (defined as current

assets less current liabilities) of R162.9 million, compared to cash and cash equivalents of R376.6 million and positive working
capital of R361.7 million at June 30, 2013 and cash and cash equivalents of R298.0 million and positive working capital of
R209.7 million at June 30, 2012.

At September 30, 2014, our cash and cash equivalents were R204.3 million.

Our management believes that existing cash resources, net cash generated from operations and the availability of

negotiated funding facilities will be sufficient to meet our anticipated commitments for fiscal 2015 as described above.

Our estimated working capital, capital expenditure and other funding commitments, as well as our sources of liquidity,

would be adversely affected if:

· our operations fail to generate forecasted net cash flows from operations;
· there is an adverse variation in the price of gold or foreign currency exchange rates in relation to the US dollar,
   particularly with respect to the rand; or
· our operating results or financial condition are adversely affected by the uncertainties and variables facing our business
   discussed under Item 5A.: “Operating Results” or the risk factors described in Item 3D.: “Risk Factors.”

In such circumstances, we could have insufficient capital to meet our current obligations in the normal course of

business, which would have an adverse impact on our financial position and our ability to continue operating as a going concern.
We would need to reassess our operations, consider further restructuring and/or obtain additional debt or equity funding. There
can be no assurance that we will obtain this additional or any other funding on acceptable terms or at all.

5C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

DRDGOLD has a dedicated team that looks at ways and means of improving recoveries. Following their work on the

responses of gold encapsulated in sulphides, we constructed the fine grind and flotation circuit at a total cost of R 389 million. The
team remains active with an ongoing focus on improving extraction efficiencies, including the test work associated with the
recommencement of the FFG circuit in August 2014.

We have no registered patents or licenses.

5D. TREND INFORMATION

During the first quarter of fiscal 2015, we produced 37,005 ounces at average cash cost of R375,044 per kilogram from our

operations. Gold production from our operations for the second quarter of fiscal 2015 is expected to be in line with the first quarter
results. Cash operating costs for the second quarter of fiscal 2015 are expected to be slightly lower due to winter tariffs for electricity
applying for the first two months of the first quarter of fiscal 2015 only. Normal tariffs apply for the whole of the second quarter.

For the full year fiscal 2015, we are expecting gold production from our operations of 150,000 to 160,000 ounces at cash

operating costs of approximately R361,000 per kilogram, based on an exchange rate assumption of approximately $1.00/R11.04. Our
ability to meet the full year’s production target could be impacted by, amongst other factors, lower grades, failure to achieve the
targets set at Ergo and failure to timely restart full production at the flotation and fine-grind project. We are also subject to cost
pressures due to above inflation increases in labor costs, electricity and water prices; increases in crude oil, steel, unforeseen changes
in ore grades and recoveries; unexpected changes in the quality or quantity of reserves; technical production issues; environmental
and industrial accidents; gold theft; environmental factors; and pollution, which could adversely impact the cash operating costs for
fiscal 2015.

5E. OFF-BALANCE SHEET ARRANGEMENTS

The Company does not engage in off-balance sheet financing activities, and does not have any off-balance sheet debt

obligations, unconsolidated special purposes entities or unconsolidated affiliates.

66

5F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Estimated and actual payments due by period

Total

Less than

1 year

Between

1-3 years

Between

3-5 years

More than 5

years

R’000

R’000

R’000

R’000

R’000

Loan notes (including interest) .................................................

156,863

79,358

77,505

-

-

Purchase obligations – contracted capital expenditure

1

.........

3,255

3,255

-

-

-

Environmental rehabilitation, reclamation and closure
costs

2

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

471,733

12,944

-

90,795

367,994

Operating leases .........................................................................

3,890

2,110

1,780

-

-

Finance leases ............................................................................

36,388

3,978

10,710

21,700

-

Total contractual cash obligations ........................................

672,129

101,645

89,995

112,495

367,994

5G. SAFE

HARBOR