EMPEROR MINES LIMITED PROSPECTUS This Prospectus has been issued by DRD (Offshore) Limited for the offer of 823,291,603 ordinary shares in Emperor Mines Limited ACN 007 508 787 for sale by way of institutional bookbuild Brokers to the Offer Corporate Advisors Legal Advisors This is an important document and should be read in its entirety. If you are in doubt about what to For personal use only do, you should consult your professional advisor without delay. 203026627_1 1 IMPORTANT NOTICE This Prospectus is dated 18 October 2007 and was lodged with ASIC on that date. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No Shares will be offered for sale on the basis of this Prospectus after the date of close of the Institutional Bookbuild referred to in Section 1. The Shares are admitted to quotation on ASX. Important document It is important that you carefully read this Prospectus in its entirety before deciding to invest in Emperor and, in particular, that you consider the assumptions underlying any prospective financial information and the risk factors that could affect the financial performance of Emperor. You should carefully consider these factors in light of your personal circumstances (including financial and taxation issues) and seek professional advice from your accountant, stockbroker, lawyer or other professional advisor before deciding whether to invest. No person is authorised to give any information or to make any representation in connection with the Shares that is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by DRD or Emperor in connection with the Shares. Neither DRD, Emperor nor any other person warrants the future performance of Emperor or any return on any investment made under this Prospectus, except as required by law and then, only to the extent so required. Proposed Merger Nothing in this Prospectus should be read as providing an indication of whether the Proposed Merger will succeed, or should be relied on by Emperor shareholders or prospective investors for the purposes of informing themselves in relation to the Proposed Merger. The Proposed Merger is conditional on a number of factors, including Emperor shareholders approving the Proposed Merger. If DRD completes the sale of the Shares under this Offer, the success of the Proposed Merger will still be subject to the satisfaction or waiver of all conditions precedent including Shareholders’ approval. The terms of the Proposed Merger are more particularly summarised in Section 3 and a summary of the key terms is included in Annexure A. As required by law, if the Proposed Merger proceeds Emperor will issue an explanatory statement about the Proposed Merger to its shareholders. At the date of this Prospectus, this explanatory statement was in preparation. Emperor shareholders or prospective investors should not rely on the information contained in this Prospectus for the purposes of informing themselves in relation to the Proposed Merger, but should read the explanatory statement in its entirety before making any decision in relation to the Proposed Merger. The information concerning Intrepid Mines Limited (being Emperor's proposed merger partner under the terms of the Proposed Merger) in section 5 has been prepared by Intrepid. Intrepid and its directors and officers do not assume any responsibility for the accuracy or completeness of any information in this Prospectus other than the information contained in section 5. Prospectus availability This Prospectus will be available to Institutional Investors who participate in the Offer. A copy will be provided upon request to DRD or Emperor at the addresses given on the inside back cover, and a copy is available on Emperor's website at www.emperor.com.au. Restrictions on the distribution of this Prospectus This Prospectus does not constitute an offer of Shares in any place in which, or to any person to whom, it would not be lawful to do so. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and any person into whose possession this Prospectus comes (including nominees, trustees or custodians) should seek advice on and observe those restrictions. Emperor Shares have not been, and will not be, registered under the US For personal use only Securities Act 1993 (as amended) and may not be offered or sold in the United States or to, or for the account of or benefit of, US persons. Accordingly neither this Prospectus nor any application letter may be sent to investors in the United States or otherwise distributed in the United States. Defined terms and abbreviations Defined terms and abbreviations used in this Prospectus are explained in the Glossary of Terms. 203026627_1 2 CONTENTS 1. DETAILS OF THE OFFER 4 2. EFFECT OF THE OFFER ON EMPEROR 6 3. THE PROPOSED MERGER 8 4. PROFILE OF EMPEROR 11 5. PROFILE OF INTREPID 28 6. PROFILE OF THE PROPOSED MERGED ENTITY 49 7. INVESTIGATING ACCOUNTANT’S REPORT 60 8. TAX IMPLICATIONS 67 9. SUMMARY OF INDEPENDENT EXPERT’S REPORT ON THE PROPOSED MERGER 75 10. RISK FACTORS 91 11. ADDITIONAL INFORMATION 96 ANNEXURE A 110 ANNEXURE B 118 ANNEXURE C 118 CORPORATE DIRECTORY 120 For personal use only 203026627_1 3 1. DETAILS OF THE OFFER 1.1 Institutional Bookbuild On 18 September 2007, Emperor announced that DRD intended to offer the Shares for sale, which comprise all of DRD's shareholding in Emperor and represents 78.72% of the total number of Emperor Shares. A copy of the announcement is set out in Annexure A. DRD has engaged ABN AMRO Morgans and Tricom to conduct the Offer to Institutional Investors. Under the Institutional Bookbuild, Institutional Investors, including professional and sophisticated investors, will be invited by ABN AMRO Morgans and Tricom (on behalf of DRD) to bid to buy the Shares. Bids are to be lodged with ABN AMRO Morgans or Tricom, who are the brokers to the Offer. This Prospectus has been issued by DRD for the purpose of making the Offer of the Shares to Institutional Investors. Emperor has provided assistance in the preparation of this Prospectus. 1.2 Indicative Timetable * Lodgement of Prospectus 18 October 2007 Commencement of Institutional Bookbuild 18 October 2007 Close of Institutional Bookbuild 19 October 2007 Settlement 29 October 2007 * These dates are indicative only and are subject to change. 1.3 Nature of the Shares Shares which are the subject of the Offer comprise ordinary fully-paid Emperor Shares. A summary of the rights attaching to Emperor Shares is set out in section 11.1. 1.4 ASX quotation The Shares are admitted to quotation on ASX. 1.5 Risk factors For personal use only In addition to the general risks applicable to all investments in companies, there are specific risks associated with an investment in Emperor, which are set out in section 10. 1.6 Taxation implications This Prospectus does not contain advice regarding the taxation consequences of investing in Emperor Shares. DRD, Emperor, their advisors and their officers do not accept any responsibility or liability for any taxation consequences. As a result, investors should consult their own professional tax advisors in connection with any investment in Emperor. A taxation opinion regarding the proposed Scheme of Arrangement, as prepared by Price Waterhouse Coopers for inclusion in the Scheme Booklet, can be found in its entirety in section 8 of this Prospectus. For personal use only 5 2. EFFECT OF THE OFFER ON EMPEROR 2.1 Change of control of Emperor The completion of the Offer will result in a change of control of Emperor, whereby the majority shareholder will be replaced by a broader shareholder base. Emperor presently has approximately 2,125 shareholders, which is likely to increase as a result of the DRD sell down. 2.2 Increased Liquidity The completion of the Offer is likely to result in an increase in the volume of Emperor Shares traded on the ASX given that after the Offer, 100% of Emperor’s Shares will be held by retail and institutional investors. 2.3 Composition of the Emperor Board DRD has indicated that its nominees to the Emperor Board, Mr John Sayers and Mr Geoffrey Campbell, will resign upon completion of the sale of the Shares. The continuing directors will be the Chief Executive Officer, Mr Brad Gordon, Mr Robert McDonald and Mr Ian McMaster. Mr Geoffrey Campbell will re-join the Emperor Board as an independent director subsequent to the sale of the Shares. 2.4 Effect of the Offer on the Proposed Merger It is a condition precedent to the Proposed Merger that DRD successfully completes the sale of all of its Shares as contemplated by the Offer prior to the scheme meeting. If DRD notifies Emperor in writing that DRD is unable to sell the Shares at a price or prices acceptable to DRD, Emperor may terminate the Merger Implementation Deed. 2.5 Emperor Reporting and Disclosure Obligations Emperor is a listed disclosing entity for the purposes of the Corporations Act and as such is subject to regular reporting and disclosure obligations. Broadly, these obligations require Emperor to prepare both yearly and half-yearly financial statements and a report on the operations of Emperor during the relevant accounting period together with an audit or review report by Emperor’s auditor and quarterly production statements. Copies of these and other documents lodged with ASIC may be obtained from or inspected at an ASIC office and on Emperor’s website at www.emperor.com.au. Emperor will provide a copy of any of the following documents free of charge to any person who requests a copy: (a) the financial report for the year ended 30 June 2007 lodged with ASIC; and For personal use only (b) any continuous disclosure notices lodged after the date of the financial report for the year ending 30 June 2007.