A2112

Ergo Uranium/ERPM Agreement - Execution Version

ISL/HD
210110

Memorandum of Agreement

Made and entered into between:-

ERGO URANIUM (PROPRIETARY) LIMITED

(Reg No 2007/017509/07)

(a company duly incorporated in accordance with the company laws of the Republic of South
Africa with limited liability, herein represented by Diederik Albert Willem van der Walt, in his
capacity as a director thereof, he being duly authorised hereto under and by virtue of a
resolution of the board of directors of the company passed at Johannesburg, RSA on the 11

th

day of January 2010, and a certified copy whereof is annexed hereto marked "A");

of the one part;

and

EAST RAND PROPRIETARY MINES LIMITED

(Reg No 1893/000773/06)

(a company duly incorporated in accordance with the company laws of the Republic of South
Africa with limited liability, herein represented by Themba Gwebu, in his capacity as a director
thereof, he being duly authorised hereto under and by virtue of a resolution of the board of
directors of the company passed at Johannesburg, RSA on the day of January 2010,
and a certified copy whereof is annexed hereto marked "B");

of the other part.

Page 2

1.

Definitions

1.1

In this agreement, unless inconsistent with the context, the following terms and/or

expressions shall have the separate meanings assigned to them hereunder and for

purposes of convenience the said definitions are reflected throughout this agreement in

capitals:-

1.1.1      “AGREEMENT”

shall mean this agreement and shall be

deemed to include all annexes thereto

which shall be initialled or signed, as the

case may be, by the PARTIES for purposes

of identification;

1.1.2       “ANGLOGOLD”

shall mean AngloGold Ashanti Limited of

the RSA (Reg No 1944/017354/06);

1.1.3       “ANGLOGOLD

AGREEMENT”

shall mean the Memorandum of Agreement

made and entered into by and between

ANGLOGOLD, the COMPANY, DRD SA

and MINTAILS SA at Johannesburg, RSA

on the 6 August 2007 relating to the sale

and purchase respectively of the “Ergo

Mining Assets” as therein defined, upon the

terms and conditions therein set forth, and

shall include the various addenda thereto

respectively dated the 17 August 2007, 30

August 2007, 21 November 2007, 28

February 2008 and 15 May 2008;

1.1.4      “ARGONAUT”

shall mean Argonaut Financial Services

(Proprietary) Limited of the RSA (Reg No

1992/005514/07), a wholly owned

subsidiary of DRDGOLD Limited (the

holding company of DRD SA);

1.1.5      “ARGONAUT CLAIMS”

shall mean the claims in loan account by

ARGONAUT (or any other company within

the DRDGOLD Limited group of companies)

Page 3

against WITFONTEIN as at the

EFFECTIVE DATE in respect of cash

monies loaned and advanced to and/or

disbursed for and on behalf of

WITFONTEIN;

1.1.6     “ARGONAUT EQUITY”

shall collectively mean the ARGONAUT

CLAIMS and the ARGONAUT SHARES;

1.1.7      “ARGONAUT SHARES”

shall mean the 500 (five hundred) ordinary

par value shares of R1,00 (one rand) each

in the capital of WITFONTEIN, the

registered and/or beneficial owner whereof

is ARGONAUT and constituting 50% (fifty

per centum) of the total issued share capital

of WITFONTEIN;

1.1.8      “APPROVALS”

shall mean the written consents, approvals

and/or permits to be issued, to the extent

required, by any of the relevant regulatory

authorities or entities, whether in Australia

or in the RSA, as a pre-requisite to the

implementation of the TRANSACTION and

in no way derogating from the generality

thereof, including (to the extent required):-

1.1.8.1

in Australia, that of:-

•      The Australian Securities

and Investments

Commission;

•

the Listings Department of

the ASX; and

•      the shareholders of

MINTAILS AUS in general

meeting;

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1.1.8.2        in the

RSA, that of:-

•

ANGLOGOLD and DRD

SA to the cancellation of

the Deed of Suretyship

furnished by MINTAILS

SA to ANGLOGOLD

under the ANGLOGOLD

AGREEMENT and the

release of MINTAILS SA

from its obligations under

such agreement failing

which, the furnishing of a

satisfactory indemnity by

DRD SA in favour of

MINTAILS SA in respect

of any claims by

ANGLOGOLD arising out

of such suretyship;

•      the COMPETITION COM-

MISSION / TRIBUNAL;

•      the DME; and

•      any third party under any

of the CONTRACTS;

1.1.9      “ASSETS”

shall mean the tangible and intangible

assets of the COMPANY as at the

EFFECTIVE DATE, that is:-

1.1.9.1

as reflected in the asset

register/s of the COMPANY;

and

1.1.9.2        all LICENCES and RIGHTS

granted by governmental,

quasi-governmental or other

authorities or entities having

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jurisdiction over any of the

mining operations of the

COMPANY;

entitling the COMPANY to lawfully conduct

the BUSINESS after the EFFECTIVE DATE

in the same manner and to the same extent

as same was conducted prior thereto;

1.1.10      “ASX”

shall mean the Australian Securities

Exchange Limited, registered as such in

accordance with the applicable laws in

Australia;

1.1.11      “ATTORNEYS”

shall mean Levy, Feinsteins & Associates

Incorporated practising under the style of

“Feinsteins” of Johannesburg, RSA;

1.1.12      “BUSINESS”

shall collectively mean the gold

mining/reclamation and related business of

the COMPANY utilising the ASSETS;

1.1.13      “CLOSING DATE”

shall mean the date of the implementation

of the provisions of clause 12 infra, which

shall as near as possible correspond with

the date of the fulfilment (or waiver, where

possible) of the last of the conditions

precedent in clause 3 infra and shall at

latest be 7 (seven) business days

thereafter;

1.1.14      “COMPANY”

shall mean Ergo Mining (Proprietary)

Limited of the RSA (Reg No

2007/004886/07), the authorised share

capital whereof is R1 000,00 (one thousand

rand) divided into 1 000 (one thousand)

ordinary par value shares of R1,00 (one

rand) each and the issued share capital

Page 6

whereof is R600,00 (six hundred rand)

divided into 600 (six hundred) ordinary par

value shares of R1,00 each, the registered

and/or beneficial owners whereof are:-

1.1.14.1

CROWN - as to 300 (three

hundred) shares; and

1.1.14.2

ERGO URANIUM - as to 300

(three hundred) shares;

1.1.15      “COMPANIES ACT”

shall mean the Companies Act, No 61 of

1973, as amended, of the RSA;

1.1.16      “COMPETITION

COMMISSION /
TRIBUNAL”

shall mean the Commission or Tribunal, as

the case may be, established in accordance

with the provisions of the Competition Act,

No 89 of 1988, as amended, of the RSA;

1.1.17      “CONTRACTS”

shall mean all those material contracts

entered into prior to the EFFECTIVE DATE

by and between the COMPANY and third

parties and which continue beyond such

date and the details whereof are known to

and in the possession of the PARTIES;

1.1.18      “CROWN”

shall mean Crown Gold Recoveries

(Proprietary) Limited of the RSA (Reg No

1988/005115/07), a subsidiary of DRD SA;

1.1.19      “DME”

shall mean the Department of Minerals and

Energy of the Government of the RSA;

1.1.20      “DRD SA”

shall mean DRDGOLD South African

Operations (Proprietary) Limited of the RSA

(Reg No 2005/033662/07) and shall be

deemed to include its successors in title or

permitted assigns, the holding company of

Page 7

CROWN and ERPM;

1.1.21      “EFFECTIVE DATE”

shall mean the 1

st

day of January 2010

notwithstanding the SIGNATURE DATE;

1.1.22      “ERGO URANIUM”

shall mean Ergo Uranium (Proprietary)

Limited (Reg No 2007/017509/07) and shall

be deemed to include its successors in title

or permitted assigns, a wholly owned

subsidiary of MINTAILS MAURITIUS;

1.1.23      “ERPM”

shall mean East Rand Proprietary Mines

Limited (Reg No 1893/000773/06) and shall

be deemed to include its successors in title

or permitted assigns, a subsidiary of DRD

SA;

1.1.24      “INTERIM PERIOD”

shall mean the period from the EFFECTIVE

DATE until the CLOSING DATE;

1.1.25      “LICENCES”

shall collectively mean all mining and similar

such licences issued by the DME, whether

in terms of the MPRDA or otherwise in

favour of the COMPANY and the details

whereof are known to and in the possession

of the PARTIES;

1.1.26      “MINTAILS AUS”

shall mean Mintails Limited (Reg No

008

740672), a public company

incorporated in accordance with the

company laws of Australia and the shares

whereof are listed on the ASX;

1.1.27      “MINTAILS MAURITIUS”

shall mean Mintails Gold and Uranium

Limited (Reg No 079690 CI/GBL) of

Mauritius and the holding company of

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ERGO URANIUM;

1.1.28      “MINTAILS SA”

shall mean Mintails SA (Proprietary)

Limited of the RSA (Reg No

2004/007547/07), a wholly owned

subsidiary of MINTAILS AUS;

1.1.29      “MPRDA”

shall mean the Mineral and Petroleum

Resources Development Act, No 28 of

2002, as amended, of the RSA;

1.1.30

PARTIES”

shall mean both parties to the

AGREEMENT;

1.1.31      “RESOLUTIONS”

shall mean those ordinary and/or special

resolutions to be passed and registered,

where applicable, in:-

•    Australia in relation to MINTAILS

AUS; and/or

•    the RSA and/or Mauritius in relation

to ERGO URANIUM,

so as to facilitate the conclusion and

implementation of the TRANSACTION in its

entirety;

1.1.32      “RIGHTS”

shall, as distinct from the LICENCES,

collectively mean all those rights of

whatsoever nature or howsoever arising held

by the COMPANY to facilitate the conduct of

the BUSINESS and in no way derogating

from the aforegoing including all its mineral

rights, mining rights (that is mining leases,

mynpachtenbriefen and precious metals

claims licences), surface rights (that is

surface right permits and bezitrechten) and

Page 9

any other rights and the details whereof are

known to and in the possession of the

PARTIES;

1.1.33      “RSA”

shall mean the Republic of South Africa;

1.1.34      “SALE CLAIMS”

shall mean the claims in loan account by

ERGO URANIUM (which, for the purposes

of the AGREEMENT shall be deemed to

include any claims by MINTAILS SA)

against the COMPANY as at the

EFFECTIVE DATE, in aggregate

R118

000

000,00 (one hundred and

eighteen million rand);

1.1.35      “SALE EQUITY”

shall collectively mean the SALE CLAIMS

and the SALE SHARES;

1.1.36      “SALE SHARES”

shall mean the 300 (three hundred) ordinary

par value shares of R1,00 (one rand) each

in the capital of the COMPANY [constituting

50% (fifty per centum) of the total issued

share capital thereof] registered in the name

of and beneficially owned by ERGO

URANIUM;

1.1.37      “SHAREHOLDERS’

AGREEMENT”

shall mean the agreement entered into at

Johannesburg, RSA on the 15 August 2008

by and between CROWN and ERGO

URANIUM governing their relationship as

shareholders of ERGO MINING and of their

nominees as directors of ERGO MINING;

1.1.38      “SIGNATURE DATE”

shall mean the date of the signature of the

AGREEMENT by the PARTY last signing

Page 10

same;

1.1.39      “TRANSACTION”

shall mean the transaction contemplated by

the AGREEMENT, that is the sale and

purchase respectively of the SALE

EQUITY;

1.1.40       “WITFONTEIN”

shall mean Witfontein Mining (Proprietary)

Limited of the RSA (Reg No

2003/013481/07) [formerly known as Skeat

Gold Mining East Rand (Proprietary)

Limited and prior thereto as Wavelett

Trading 105 (Proprietary) Limited], the

authorised and issued share capital whereof

is R1 000,00 (one thousand rand) divided

into 1 000 (one thousand) ordinary par

value shares of R1,00 (one rand) each. the

registered and/or beneficial owners whereof

are:-

1.1.40.1

ARGONAUT - as to 500 (five

hundred) shares; and

1.1.40.2

MINTAILS SA - as to 500

(five hundred) shares.

1.2       Words importing:-

1.2.1

the singular shall include the plural and vice versa;

1.2.2

any one gender shall include the others;

1.2.3

persons shall, where the context admits, include firms or corporations.

1.3

Where figures are referred to in numerals and words, then the latter shall prevail in the

event of any dispute.

1.4

Any reference to a statute, regulation or other legislation shall be a reference to such

statute, regulation or other legislation as at the date of signature of these presents and

as amended or substituted from time to time.

Page 11

1.5

When any number of days is prescribed in the AGREEMENT, same shall mean

business days and shall be reckoned exclusively of the first and inclusively of the last

day.

1.6

The use of the word “including” followed by a specific example/s shall not be construed

as limiting the meaning of the general wording preceding it and the eiusdem generis

rule shall not be applied in the interpretation of such general wording or such specific

example/s.

1.7

Where any term is defined within a particular clause other than as set forth in this

clause 1, then that term shall bear the meaning ascribed to it in that clause wherever it

is used in the AGREEMENT.

1.8

The terms of the AGREEMENT having been negotiated, the contra proferentem rule

shall not be applied in the interpretation thereof.

1.9

Any term which refers to an RSA legal concept or process (in no way derogating from

the generality thereof, for example “winding-up” or “curatorship”) shall be deemed to

include a reference to the equivalent or analogous concept or process in any other

jurisdiction in which the AGREEMENT may apply or to the laws of which any PARTY

cited hereunder may be or become subject.

1.10

Any reference to “permitted assigns” shall mean those consented to, in writing, by both

PARTIES.

2.

Recordal

It is recorded that:-

2.1       the COMPANY conducts the BUSINESS;

2.2

the present shareholders of the COMPANY are CROWN and ERGO URANIUM in

equal proportions; and

2.3

MINTAILS AUS and DRD SA are desirous of severing their relationship exercised

through their respective subsidiaries in ERGO MINING and to this end ERGO

URANIUM has agreed to sell to ERPM, which has agreed to purchase from it, the

SALE EQUITY upon the terms and conditions more fully set forth hereafter.

Page 12

3.

Conditions Precedent

3.1

Notwithstanding anything to the contrary in the AGREEMENT contained, it shall be

subject to the fulfilment or waiver (where possible), of the following conditions

precedent, to wit:-

3.1.1

the furnishing of the APPROVALS to be evidenced in writing by the

relevant issuing authority/entity to the reasonable satisfaction of the

PARTIES; and

3.1.2

the passing and/or, where applicable, the registration of the

RESOLUTIONS;

within a period of 120 (one hundred and twenty) days after the SIGNATURE DATE.

3.2

The aforegoing conditions are stipulations for the benefit of both PARTIES and

accordingly shall only be capable of being waived (save for any regulatory approvals or

shareholders’ resolutions which are required) in writing by both the PARTIES.

3.3

Should the aforesaid conditions precedent not be fulfilled or waived (where possible)

within the period/s set forth above or within such extended period/s as the PARTIES

may in writing agree upon, then and in such event the AGREEMENT shall ipso facto

be and become null and void ab initio and the PARTIES shall be obliged to restore

each other as near as possible to the status quo ante as at the SIGNATURE DATE

and neither of the PARTIES shall have any claims against the other of them save as

set forth to the contrary in the AGREEMENT.

3.4       The PARTIES reciprocally warrant in favour of each other that they will in good faith

use their reasonable commercial endeavours to procure the fulfilment of the conditions

precedent which are applicable to them as soon as possible after the SIGNATURE

DATE and to such end shall supply such information and/or execute such reasonable

documentation as may be required by any third party, be it regulatory authorities or

otherwise, in relation to the said conditions within a period of 5 (five) days after a

written request therefor.

4.

Warranty and Acknowledgments

4.1

Warranty

ERGO URANIUM does hereby represent and warrant in favour of ERPM that it is the

legal holder of the SALE EQUITY which is unencumbered and that it is accordingly

entitled to deal therewith in accordance with the AGREEMENT.

Page 13

4.2

Acknowledgments

4.2.1

By ERPM

ERPM acknowledges that:-

4.2.1.1

save as set forth in clause 4.1 to the contrary, no express or

implied warranties have been given by ERGO URANIUM or

any third party on its behalf to ERPM of and in connection

with the TRANSACTION and accordingly the SALE

EQUITY is sold by the former to the latter “voetstoots”;

4.2.1.2         its sister company, CROWN, is a 50% shareholder of the 

COMPANY and by reason thereof ERPM is fully au fait with

all the facts and circumstances surrounding the COMPANY,

the BUSINESS, the ASSETS and any liabilities in

connection therewith and ERPM warrants in favour of

ERGO URANIUM that CROWN has consented to the

TRANSACTION.

4.2.1.3

ERGO URANIUM shall not be liable for any defects, latent

or patent, in the ASSETS nor for any damage occasioned to

or suffered by ERPM by reason thereof and the implied

warranty against latent defects is expressly excluded; and

4.2.1.4

by reason of clause 4.2.1.2 supra, ERPM waives the

preparation of financial statements of the COMPANY as at

the EFFECTIVE DATE.

4.2.2

By ERGO URANIUM

ERGO URANIUM acknowledges that portion of the purchase

consideration for the SALE EQUTY will be discharged by the delivery of

the ARGONAUT EQUITY and that such delivery shall be “voetstoots”

without any warranties attaching thereto save that ERPM warrants in

connection therewith that ARGONAUT is the lawful owner of, and

accordingly entitled to deliver, the ARGONAUT EQUITY, which is totally

unencumbered, in accordance with the AGREEMENT.

Page 14

5.

Sale

Subject to the AGREEMENT becoming unconditional and subject further to the provisions of

clause 4 supra:-

5.1

ERGO URANIUM does hereby sell to ERPM and the latter does hereby purchase from

it the SALE EQUITY (as one indivisible transaction) for the purchase consideration

hereinafter referred to; and

5.2

the benefits of and the risks attaching to the acquisition of the SALE EQUITY shall

pass from ERGO URANIUM to ERPM retrospectively with effect from the EFFECTIVE

DATE.

6.

Purchase Consideration

The purchase consideration for the SALE EQUITY shall be the sum of R82 088 321,73 (eighty

two million and eighty eight thousand and three hundred and twenty one rand and seventy

three cents) constituted as to:-

6.1       the SALE CLAIMS at the discounted sum of R82 088 022,73 (eighty two million and

eighty eight thousand and twenty two rand and seventy three cents); and

6.2

R300,00 (three hundred rand), being the par value of the SALE SHARES.

7.

Payment of Purchase Consideration

7.1

The purchase consideration as aforesaid shall be discharged as to:-

7.1.1

R62 088 321.73 (sixty two million and eighty eight thousand and three

hundred and twenty one rand and seventy three cents) which shall be

paid by ERPM in three tranches as follows:-

7.1.1.1

R7 088 321,73 (seven million and eighty eight thousand and

three hundred and twenty one rand and seventy three

cents) - on the SIGNATURE DATE or so soon thereafter

as possible;

7.1.1.2

R20 000 000,00 (twenty million rand) - on the 31 March

2010;

7.1.1.3

R35 000 000,00 (thirty five million rand) - on the earlier of

the CLOSING DATE or the 30 June 2010, as the case may

be,

Page 15

and all of which shall be paid by ERPM to the ATTORNEYS in trust and

to be invested by them (save in the case of the amount referred to in

7.1.1.1 supra) in an interest bearing account as more fully provided in

clause 7.2 infra ; and

7.1.2

R20 000 000,00 (twenty million rand), being the agreed value of the

ARGONAUT EQUITY, which shall be delivered in negotiable form by

ERPM to ERGO URANIUM or its nominee, on the CLOSING DATE.

7.2

The cash amounts payable in accordance with clause 7.1.1 supra, shall be paid by

ERPM to the ATTORNEYS in accordance with the provisions of Section 78 (2A) of the

Attorneys Act, No 53 of 1979, as amended, of the RSA, and on the basis that:-

7.2.1

the account will be in the name of the ATTORNEYS and under their

control;

7.2.2

the provisions hereof constitute the required written

instruction/authorisation to the ATTORNEYS in accordance with the

aforesaid Act as read with rule 77.1 of the Rules of the Law Society of the

Northern Provinces, RSA to so invest such funds if timing permits; and

7.2.3

the said funds plus interest thereon shall, subject to the overriding

provisions of clauses 7.3 and 8 infra, be held in trust by the ATTORNEYS

as agent for and on behalf of ERPM pending the arrival of the CLOSING

DATE and the implementation of the provisions of clause 12 infra,

whereupon the purchase consideration shall be released by the

ATTORNEYS to ERGO URANIUM and the interest which has accrued

thereon, to ERPM.

7.3

7.3.1

Notwithstanding anything to the contrary in clauses 7.1 and 7.2 supra,

ERPM has agreed that subject to the provisions of clause 8 infra, the

amount referred to in clause 7.1.1.1 supra shall be released by the

ATTORNEYS to ERGO URANIUM as and by way of an interest bearing

loan, as soon as possible after the receipt thereof;

7.3.2

The interest which shall accrue on the loan shall equal that from time to

time of the interest payable by Nedbank Limited on the ATTORNEYS (or

their auditors, PKF Inc of Johannesburg) corporate saver account in

respect of an amount equal to that in 7.1.1.1 supra. The interest shall be

calculated for the period from the date of the advance until the CLOSING

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DATE or in the event of the application of clause 8.2 infra, the date of

repayment of the loan, as the case may be (both days inclusive). A

certificate under the hand of any manager of Nedbank Limited (whose

appointment and authority it shall not be necessary to prove) as to the

interest rate and the amount payable, shall be final and binding on the

PARTIES.

8.

Loan and Collateral Security therefor

8.1

Notwithstanding anything to the contrary in clause 7 supra, ERPM does hereby

irrevocably authorise the ATTORNEYS, within a period of 3 (three) days after the

receipt of the amount referred to in clause 7.1.1.1 supra, to release the same to ERGO

URANIUM as and by way of an interest bearing loan (determined as aforesaid) by

ERPM to ERGO URANIUM and in advance of the arrival of the CLOSING DATE.

8.2       Should the CLOSING DATE not arrive for whatever reason within the time period

stipulated in the AGREEMENT or within such extended period as the PARTIES may in

writing agree upon, then and in such event the aggregate of the amount advanced plus

interest thereon, determined as aforesaid, shall be and become repayable by ERGO

URANIUM to ERPM not later than 90 (ninety) days after written demand therefor.

8.3

As collateral security for the aforegoing loan, ERGO URANIUM shall on the

SIGNATURE DATE deposit in escrow with the ATTORNEYS, the SALE EQUITY in

negotiable form to be held by them for and on behalf of ERPM pending:-

8.3.1

the arrival of the CLOSING DATE and the implementation of the

provisions of clause 12 infra, whereupon same shall be released to

ERPM as therein provided; or

8.3.2

the repayment in full of the aforesaid loan plus interest thereon as

provided in clause 7.3.2 supra within the period stipulated in clause 8.2

supra:-

8.3.2.1

in which event same shall be released to ERGO URANIUM;

alternatively

8.3.2.2

failing which, it shall be released by the ATTORNEYS to

ERPM which shall be entitled to cause same to be realised

by public auction or private treaty on a transparent arms

length bona fide basis so as to maximise the selling price

therefor and on the basis that the realised value in excess of

the loan plus interest thereon as aforesaid and any bona

Page 17

fide costs incurred by ERPM, shall redound to the exclusive

benefit of ERGO URANIUM and be paid to it,

as the case may be.

9.

Rehabilitation Deposit

9.1       The PARTIES record that:-

9.1.1

in terms of the ANGLOGOLD AGREEMENT, the COMPANY caused to

be deposited the sum of R63 000 000,00 (sixty three million rand) to

cover the rehabilitation obligations (as referred to in such agreement) with

Investec Bank Limited and caused such bank to furnish a guarantee

therefor in favour of ANGLOGOLD as will more fully appear from a copy

thereof annexed hereto marked “C”; and

9.1.2

drawn downs are permitted under the said guarantee from time to time in

accordance with the provisions thereof.

9.2

In the event of there being a surplus after the completion of the rehabilitation

programme in respect whereof the aforesaid guarantee was established by the

COMPANY in favour of ANGLOGOLD, then and in such event such surplus shall, to

the extent that:-

9.2.1

it is R20 000 000,00 (twenty million rand) or less, be shared equally

between the PARTIES; or

9.2.2

it exceeds R20 000 000,00 (twenty million rand), then such excess shall

redound to the exclusive benefit of ERPM.

10.

CONTRACTS

10.1

To the extent that any of the CONTRACTS may contain any provision whereby any

change in the control of the COMPANY may require the written consent of any third

party, the PARTIES shall use their reasonable commercial endeavours as soon as

possible after the CLOSING DATE, to procure retrospectively with effect from the

EFFECTIVE DATE, the furnishing of such consent.

10.2

Should any third party decline to furnish consent for whatever reason, then and in such

event ERPM shall take such steps as may be necessary to satisfy the reasonable

requests of such third party .

Page 18

11.

INTERIM PERIOD

11.1     As the COMPANY is presently controlled by CROWN (a subsidiary of DRD SA) and

ERGO URANIUM in equal shares, the PARTIES shall during the INTERIM PERIOD

procure that the BUSINESS is conducted in the ordinary, normal and regular course

thereof and neither of the PARTIES shall be entitled to make any decision without prior

consultation with the other and which may be detrimental to the interests of the other.

11.2

In and during the INTERIM PERIOD, the PARTIES shall procure that:-

11.2.1          the COMPANY shall maintain its books and records of and concerning

the ASSETS and the BUSINESS in good order and currently up to date

at all times;

11.2.2          the COMPANY shall comply with all laws affecting the operation of the

plant and equipment and rolling stock which constitute portion of the

ASSETS;

11.2.3          the COMPANY shall not assume or incur any liability, actual or

contingent, save in the ordinary, regular and normal course of business;

11.2.4          the COMPANY shall not knowingly take or cause to be taken any steps

directly or indirectly which may in any way adversely affect the completion

of the AGREEMENT;

11.2.5          the COMPANY shall not do or omit to do any act, matter or thing which

may invalidate any policies of insurance or cause the premiums

thereunder to be increased;

11.2.6          the COMPANY shall maintain all policies of insurance in its name and

cause all premiums to be paid on the due dates therefor and any claims

thereunder shall redound to the benefit of the COMPANY less any

excess thereon;

11.2.7

each shall cause to be disclosed to the other in writing forthwith upon the

occurrence thereof any change in any material fact or any other material

change or any new material fact relating to the AGREEMENT; and

11.2.8          the COMPANY shall at its cost take such steps as may be necessary to

properly care for and maintain the ASSETS and shall discharge any

liabilities on their respective due dates therefor.

Page 19

12.

CLOSING DATE

On the CLOSING DATE, the PARTIES and/or their duly authorised representatives shall meet

at a pre-determined time and venue and at which the following shall, inter alia, take place:-

12.1

ERGO URANIUM shall:-

12.1.1

procure that the SALE EQUITY is released by the ATTORNEYS to

ERPM, the same to encompass the following:-

12.1.1.1

the certificates in respect of the SALE SHARES and the

relevant share transfer forms which shall be currently dated

and duly completed to enable transfer of the SALE

SHARES to be registered in the name of ERPM; and

12.1.1.2

written cessions in respect of the SALE CLAIMS in favour

of ERPM;

12.1.2          deliver to

ERPM:-

12.1.2.1

the written resignations of all the ERGO URANIUM

appointees on the board of directors of the COMPANY and

from any other offices held by them in the COMPANY;

12.1.2.2

resolutions of the board of directors of the COMPANY:-

•    approving the transfer of the SALE SHARES

hereby sold into the name of ERPM;

•     taking cognisance of the cession of the SALE

CLAIMS to ERPM; and

•    accepting the resignations of the nominees of

ERGO URANIUM and appointing additional

nominees of ERPM as the latter may determine.

12.2

ERPM shall deliver to ERGO URANIUM the following:-

12.2.1

the certificates in respect of the ARGONAUT SHARES and the relevant

share transfer forms, which shall be currently dated and duly completed

(in blank as to transferee) to enable transfer of the ARGONAUT

SHARES to be registered in the name of ERGO URANIUM or its

nominee;

Page 20

12.2.2

a written cession in respect of the ARGONAUT CLAIMS in favour of

ERGO URANIUM or its nominee;

12.2.3

the written resignations of all the ARGONAUT appointees on the board of

directors of WITFONTEIN and from any other offices held by them in

WITFONTEIN;

12.2.4

resolutions of the board of directors of WITFONTEIN:-

•     approving the transfer (on a “voetstoots” basis) of the

ARGONAUT SHARES into the name of ERGO URANIUM or its

nominee;

•    taking cognisance of the cession of the ARGONAUT CLAIMS to

ERGO URANIUM or its nominee; and

•    accepting the resignations of the nominees of ARGONAUT and

appointing the additional nominees of ERGO URANIUM or its

nominee, as the latter may determine.

12.3     The ATTORNEYS shall release to ERGO URANIUM whatever portion of the purchase

consideration is still held by them in trust in accordance with the provisions of clause 7

supra.

12.4     The PARTIES shall procure that the SHAREHOLDERS’ AGREEMENT is cancelled on

the basis that the same shall be of no further force or effect and neither of the parties

thereto shall have any claims against the other arising thereout. CROWN, as is

evidenced by its signature at the foot of the AGREEMENT, does hereby confirm the

aforegoing.

13.

WITFONTEIN

13.1

ERGO URANUM and MINTAILS SA (as is evidenced by its signature at the foot of the

AGREEMENT), do hereby jointly and severally (collectively referred to as “the Mintails

Group”) warrant in favour of ERPM that it is the avowed intention of the Mintails

Group not to directly or indirectly realise the ARGONAUT EQUITY, to be acquired

pursuant to clause 7.1.2 supra. within a period of 2 (two) years after the CLOSING

DATE.

13.2

Notwithstanding anything to the contrary in 13.1 supra and subject to the arrival of the

CLOSING DATE and the implementation of the provisions of clause 12 supra:-

Page 21

13.2.1          the Mintails Group does hereby give and grant to ERPM (or its

nominee), the right of first refusal to re-acquire the ARGONAUT EQUITY

upon the same terms and conditions as will be contained in any bona fide

arms length third party offer received by the Mintails Group (which shall

be deemed to include any company directly or indirectly controlled by the

Mintails Group) and which is acceptable to it;

13.2.2

the right of first refusal shall be open for acceptance for a period of 30

(thirty) days after the receipt by ERPM of a copy of the third party offer

from the Mintails Group and during which period the right of first refusal

shall be irrevocable;

13.2.3          if ERPM exercises its right (directly or through its nominee), then it shall

be deemed to have re-acquired the ARGONAUT EQUITY upon the

identical terms and conditions contained in the third party offer document,

the provisions whereof shall apply, mutatis mutandis, thereto and as

against ERPM’s (or its nominee’s) written acceptance thereof;

13.2.4

the aforesaid right of first refusal shall be valid and enforceable until the

expiration of 2 (two) years from the CLOSING DATE save that should the

Mintails Group as part of a bona fide restructuring of MINTAILS AUS

and/or its RSA subsidiaries wish to dispose of the ARGONAUT EQUITY

to any other member of the MINTAILS AUS group of companies, then

and in such event the aforesaid right in favour of ERPM shall not be

capable of being enforced, but the transferee of the ARGONAUT

EQUITY shall as a pre-requisite to such transfer, bind itself to the

provisions of the aforesaid right of first refusal in favour of ERPM for the

stated period and the Mintails Group shall furnish copies of the relevant

documents to ERPM for retention with its records.

13.3

ERGO URANIUM agrees and undertakes after transfer of the ARGONAUT EQUITY

into the name of ERGO URANIUM or MINTAILS SA, to cause the share certificate

therefor to be deposited with the ATTORNEYS to be held by them during the aforesaid

period of 2 (two) years.

14.

MINTAILS SA

To the extent that MINTAILS SA is a creditor in loan account of the COMPANY and which

claim shall constitute an integral part of the SALE CLAIMS, then and in such event MINTAILS

SA, as is evidenced by its signature at the foot of the AGREEMENT, does hereby bind itself in

Page 22

favour of ERPM to give effect to that portion of the TRANSACTION in which it is directly or

indirectly involved.

15.

No Commission

The PARTIES acknowledge that no third party was instrumental in the conclusion of the

AGREEMENT and that no liability of whatever shall attach to ERGO URANIUM or ERPM in

respect of any commission to any third party of and in connection with the AGREEMENT.

16.

Regulatory Authorities

16.1

In no way derogating from any other provisions of the AGREEMENT, the PARTIES

shall co-operate fully and shall sign and submit all documentation necessarily required

to facilitate the grant of all regulatory authorities required to give effect to the

AGREEMENT and the TRANSACTION as a whole.

16.2

All such documents shall be produced and/or signed upon written request therefor.

17.

Breach Provisions

17.1

Save as provided in clause 8 supra, should either of the PARTIES commit a breach of

any of the provisions of the AGREEMENT which are applicable to it, , then and in such

event the aggrieved PARTY shall be obliged to afford the guilty PARTY a period of 14

(fourteen) days’ written notice (calculated from the date of receipt thereof) within which

to remedy the breach, failing which the aggrieved PARTY shall then be entitled at its

sole and absolute discretion, subject to 17.2 infra, to cancel the AGREEMENT and

claim damages, alternatively to abide thereby and claim damages without prejudice to

any other rights then vested in the aggrieved PARTY in law.

17.2

Notwithstanding anything to the contrary in 17.1 supra, the aggrieved PARTY shall

only be entitled to cancel the agreement if the breach is of a material nature and strikes

at the roots of the AGREEMENT and cannot otherwise be reasonably remedied by

monetary compensation, alternatively if such compensation is claimed and not paid.

18.

Adjudication of Disputes

18.1

Should any dispute arise between the PARTIES in regard to:-

18.1.1

the interpretation of;

18.1.2

the effect of;

18.1.3          the PARTIES' respective rights or obligations under;

Page 23

18.1.4

a breach of;

18.1.5

the termination of;

18.1.6

any matter arising out of the termination of;

the AGREEMENT, that dispute shall be decided by arbitration in the manner set out in

this clause 18.

18.2

The arbitrator shall be appointed by the PARTIES, and failing agreement, shall be

nominated by the Arbitration Foundation of Southern Africa ("AFSA") out of the

nominees of the PARTIES. Should AFSA not be in existence at the time, the

nomination shall be made by the Chairman for the time being of the Johannesburg,

RSA Bar Council.

18.3

The arbitration shall be held at Sandton, Gauteng, RSA and 'in camera' on the basis

that such proceedings will be strictly private and confidential.

18.4

The arbitration shall be held in accordance with the Rules of AFSA, or if AFSA shall not

be in existence, in accordance with the formalities and procedures settled by the

arbitrator, which shall be in an informal and summary manner, that is, it shall not be

necessary to observe or carry out either the usual formalities or procedures or the strict

rules of evidence, and otherwise subject as aforesaid to the Arbitration Act, 1965, of

the RSA and any statutory modification or re-enactment thereof. Notwithstanding the

aforegoing, insofar as the time parameters are concerned, the Rules of AFSA shall not

be applicable and shall be deemed substituted by the Uniform Rules of the High Court

of the RSA.

18.5

The arbitrator shall be entitled to:-

18.5.1

investigate or cause to be investigated any matter, fact or thing which he

considers necessary or desirable in connection with any matter referred

to him for decision;

18.5.2

decide the matters submitted to him according to what he considers just

and equitable in all the circumstances, having regard to the purpose of

the AGREEMENT; and

18.5.3

make such award, including an award for specific performance, an

interdict, damages or a penalty or the costs of arbitration or otherwise, as

he in his discretion may deem fit and appropriate.

Page 24

18.6

The arbitration shall be held as expeditiously as possible after it is demanded with a

view to it being completed within 30 (thirty) days after it has been so demanded.

18.7

This clause is severable from the remainder of the AGREEMENT and shall therefore

remain in effect even if the AGREEMENT is terminated.

18.8

Subject to the above provisions of this clause 18, the law governing the AGREEMENT

shall be South African law and the Court having jurisdiction to enforce any award made

under this clause shall be the South Gauteng, Johannesburg Division of the High Court

of the RSA and all appeal courts therefrom.

19.

General

19.1

Clause Headings

The clause headings to the AGREEMENT are for reference purposes only and do not

bear upon the interpretation of the AGREEMENT. If any provision in a definition is a

substantive provision conferring rights or imposing obligations on any PARTY,

notwithstanding that it is only in the definition, effect shall be given to it as if it were a

substantive provision in the body of the AGREEMENT.

19.2

Domicilia

19.2.1          The PARTIES hereby choose domicilia citandi et executandi for all

purposes under the AGREEMENT at the addresses set opposite their

respective names hereunder:-

19.2.1.1

ERPM - 4 Ebsco House, 299 Pendoring Avenue,

Blackheath, Johannesburg 2195, RSA - telefax number

011 476-2637;

19.2.1.2

ERGO URANIUM - 1

st

Floor, North Wing, Lord Charles

Office Park, 337 Brooklyn Road, Pretoria 0002, RSA -

telefax number +27 12 346-4409.

19.2.2

Any notice to either PARTY shall be addressed to such PARTY at its

domicilium aforesaid and either sent by telefax or delivered by hand. In

the case of any notice -

19.2.2.1

sent by telefax, it shall be deemed to have been received,

unless the contrary is proved, on the date of the successful

transmission thereof if a business day, otherwise the next

following business day;

Page 25

19.2.2.2

delivered by hand, it shall be deemed to have been

received, unless the contrary is proved on the date of

delivery, provided such date is a business day or otherwise

on the next following business day.

19.2.3          Either PARTY shall be entitled, by notice to the other, to change its

domicilium to another address in the RSA, provided that the changes

shall only become effective 14 (fourteen) days after service of the notice

in question.

19.2.4

Notwithstanding anything to the contrary hereinbefore contained, a

written notice or communication actually received by one of the PARTIES

from the other, including by way of telefax transmission, shall be

adequate written notice or communication to such PARTY.

19.3

Costs

The costs of and incidental to:-

19.3.1

the transfer of the SALE SHARES to ERPM, shall be borne and paid by

ERPM;

19.3.2

the transfer of the ARGONAUT EQUITY to ERGO URANIUM or its

nominee, shall be borne and paid by ERGO URANIUM or the transferee,

as the case may be;

19.3.3

any regulatory authorities shall be borne and paid by ERGO URANIUM

on the one hand and ERPM on the other in equal shares, upon written

request therefor save for the COMPETITION COMMISSION/TRIBUNAL

costs, which shall be borne and paid by ERPM;

19.3.4

the drafting and drawing of the AGREEMENT and all negotiations in

connection therewith shall be borne and paid by ERGO URANIUM on the

one hand and ERPM on the other hand in equal shares.

19.4

Non-Waiver

19.4.1

No variation or amendment of the AGREEMENT will be of any force or

effect unless reduced to writing and signed by both PARTIES.

19.4.2

No consensual termination of the AGREEMENT will be of any force or

effect unless reduced to writing and signed by the PARTIES.

Page 26

19.4.3

No waiver or abandonment of any PARTY's rights arising from the

AGREEMENT, accrued or otherwise, will be of any force or effect as

against such party unless such waiver or abandonment is reduced to

writing and signed by the PARTY waiving and abandoning such rights.

19.4.4

No oral statements and no conduct by a PARTY relating to any purported

variation, amendment, cancellation, waiver or abandonment will estop a

PARTY from relying upon the formalities prescribed in the preceding sub-

clauses of this clause.

19.4.5

Neither of the PARTIES shall be entitled, without the prior written consent

of the other which shall not be unreasonably withheld, to cede or assign

any of its rights or delegate any of its obligations arising out of the

AGREEMENT save that the onus of proof that the consent is being

unreasonably withheld, shall rest on the PARTY seeking the cession and

assignment.

19.5

Severability of Contract

In the event of any provisions of the AGREEMENT being invalid, such provision/s shall

be regarded as severable from the remainder of the AGREEMENT which shall remain

of full force and effect.

19.6

Good Faith and Implementation

19.6.1         The PARTIES undertake to do all such things, perform all such acts and

take all steps to procure the doing of all such things and the performance

of all such acts, as may be necessary or incidental to give or conducive to

the giving of effect to the terms, conditions and import of the

AGREEMENT.

19.6.2          The PARTIES shall at all times during the continuance of the

AGREEMENT observe the principles of good faith towards one another in

the performance of their obligations in terms of the AGREEMENT. This

implies, without limiting the generality of the aforegoing, that:-

19.6.2.1

they will at all times during the term of the AGREEMENT act

reasonably, honestly and in good faith;

19.6.2.2

they will perform their obligations arising from the

AGREEMENT diligently and with reasonable care; and

Page 27

19.6.2.3

they will make full disclosure to each other of any matter

that may affect the execution of the AGREEMENT or its

implementation from time to time.

19.7

Whole Agreement

The AGREEMENT constitutes the entire contract between the PARTIES and no

amendment or consensual cancellation of the AGREEMENT or any provision or term

thereof, and no extension of time, waiver, relaxation or suspension of any of the

provisions or terms of the AGREEMENT, shall be of legal efficacy save insofar as the

same is reduced to writing and signed by the PARTIES.

20.

Counterparts

The AGREEMENT may be signed in separate counterparts, each of which shall be deemed to

be an original and all of which taken together shall constitute one and the same instrument. A

counterpart of the AGREEMENT in telefax form shall be conclusive evidence of the original

signature and shall be as effective in law as the counterparts in original form showing the

original signatures.

Thus done and signed by ERGO URANIUM at Johannesburg, RSA on this the 21

st

day of January

2010, in the presence of the undersigned witnesses.

As witnesses:-

For: Ergo Uranium (Proprietary) Limited

1.

2.

/s/ DAW van der Walt

- director -

Thus done and signed by ERPM at Johannesburg, RSA on this the 21

st

day of January 2010, in the

presence of the undersigned witnesses.

As witnesses:-

For: East Rand Proprietary Mines Limited

1.

2.

/s/ T Gwebu

- director -

Page 28

Thus done and countersigned by MINTAILS SA at Johannesburg, RSA on this the 21

st

day of

January 2010, in the presence of the undersigned witnesses in confirmation of the provisions of

clauses 13 and 14 supra.

As witnesses:-

For: Mintails SA (Proprietary) Limited

1.

2.

/s/ DAW van der Walt

- director, who by his signature hereto
warrants that he is duly authorised thereto -

Thus done and countersigned by CROWN at Johannesburg, RSA on this the 21

st

day of January

2010, in the presence of the undersigned witnesses in confirmation of the provisions of clause 12.4

supra.

As witnesses:-

For: Crown Gold Recoveries (Proprietary)
Limited

1.

2.

/s/ T Gwebu

- director, who by his signature warrants that
he is duly authorised hereto -

Annexe "B"

Extracts from the Minutes of a Meeting of the Board of Directors of East Rand Proprietary Mines
Limited, held at Johannesburg on the day of January 2010
__________________________________________________________________________________


Resolved that :-

1.

The company enters into an agreement with
Ergo Uranium (Proprietary) Limited, upon the
terms and conditions contained in a draft of such
agreement which was tabled at this meeting.

2.

Themba Gwebu, in his capacity as a director of
the company, be and he is hereby authorised to
sign the said agreement for and on behalf of the
company.

Certified True Extracts

Chairman oftheMeeting

Annexe "A"

Extracts from the Minutes of a Meeting of the Board of Directors of Ergo Uranium (Proprietary) Limited,
held at Johannesburg on the 11

th

day of January 2010

__________________________________________________________________________________


Resolved that :-

1.

The company enters into an agreement with
East Rand Proprietary Mines Limited, upon the
terms and conditions contained in a draft of such
agreement which was tabled at this meeting.

2.

Diederik Albert Willem van der Walt, in his
capacity as a director of the company, be and
he is hereby authorised to sign the said
agreement for and on behalf of the company.

Certified True Extracts

Chairman oftheMeeting

Annexe “C”

Copy of Guarantee in favour of ANGLOGOLD

(vide clause 9.1.1 supra)