Emperor Mines Limited

DRD still has interest in Emperor Mines Limited

By Sophie Foster Hildebrand

Despite its recent with drawal of a bid to buy a controlling stake in Emperor Gold Mines Limited, South African mining compa ny, Durban Roodeport Deep, may still consider buying shares in future.

EGM is the owner of the Emperor gold mine on Fiji’s main island of Viti Levu.

DRD Australasia ApS, a whol ly owned subsidiary of DRD, recently made a conditional scrip bid to acquire all of shares in Emperor Mines Limited. This was based on one new DRD share for every five Emperor shares held.

The offer was withdrawn on March 21 after DRD learnt that EGM was challenging the Australian Securities and Investment Commission’s decision to grant a modifica tion to DRD.

“Once the legal impedi ments to the bid proceeding have been removed, DRD intends again to give the board of Emperor the opportunity to discuss their views on the pric

ing of an offer and an opportunity to explain the value of Emperor,” a DRD statement said. “If Emperor remains an attractive acquisition target, DRD may reconsider an acquisition on a more amicable basis, if appropriate in the circumstances at the time”.

DRD had met with fierce opposition from Emperor directors after rumours last year of the company’s intention to take over Emperor. DRD had initially wanted to buy

out majority shareholding before making an

offer to other shareholders. However, under the Emperor articles of association, individ uals or companies cannot buy more than 20 per cent of Emperor’s shares without mak ing an offer to other shareholders.

DRD had sought to change the articles of association to facilitate a majority buyout and called for an extraordinary general meeting to pass a number of resolutions.

However, this did not take place after Emperor sought legal advice. Emperor company secretary, Gregory Starr told ASX that the letter calling for the meeting “does not constitute a valid requisition” under Isle of Man laws and Emperor’s articles of asso ciation.A company associated with DRD, Consolidated African Mines Jersey Limited (CAMJ) recently failed in an attempt to

remove most of the directors from the Emperor board. In February the Jersey-reg istered company twice sought an extraordi nary general meeting of Emperor’s share holders in a bid to remove all the compa ny’s executive and independent directors.

An Emperor statement said CAMJ had proposed that Emperor’s chair, Gordon Toll and Canadian director, Ed Flood, should remain and be joined by two directors CAMJ nominated. CAMJ also sought to amend Emperor’s Articles of Association to increase the size of the board to 11 mem

bers. “After taking legal advice. Emperor’s

board has determined that the requisition is invalid and is therefore unable to act on it.

CAMJ has been advised accordingly,” the

statement said. The Emperor directors said they considered recent initiatives by CAMJ/DRD as aims to de-stabilise the company. These, they said, included a newspaper advertisement last November urging shareholders to oppose the expan sion of the board and confirmation of the appointment of directors.

On 11 February, CAMJ requisitioned an EGM to remove executive and independent directors then withdrew its request five days later, they said.

Further, they said, in proxies for the company’s EGM on February 25, CAMJ/DRD opposed the change of domi cile of Emperor (from the Isle of Man to Australia). But on the morning of the EGM, CAMJ lodged its latest requisition, which included a proposal for a motion to move the domicile of Emperor to Australia.

Emperor directors consid ered the CAMJ move “as a further attempt by DRD to gain control of the Australian-listed miner by unconventional means”.

DRD said its offer to EGM represented a premium of 5.4 per cent based on the weighted average market prices of Emperor shares (on the Australian Stock Exchange) and DRD shares (on NASDAQ) over February. On the same basis, it said, over the past three months, the premium was 35 per cent.

DRD had also been seek ing a listing on ASX “to enable Emperor share -

holders to trade DRD shares they receive in Australia”. It said the ASX listing was con sistent with DRD’s strategy of seeking interests in other gold mining and explo ration projects in the Australasian region.

A DRD statement said the company’s “turnaround expertise has permitted DRD to acquire mines on the brink of closure and to continue to operate them in a low gold price environment. This expertise should assist in the management of Emperor’s Vatukoula operations.”

It says that its considerable expertise in managing marginal and high cost under ground gold mining operations should enable it to realise the full value of Emperor’s Vatukoula mine in Fiji. ■