Securities Law & Instruments

Headnote

Mutual Reliance Review System B National Instrument43-101. South African issuer selling securities by way of aprivate placement is granted relief from requirements in Parts2, 3, and 4 of NI 43-101 on the following grounds: (i) afterthe offering, the issuer will have a de minimis presencein Canada, (ii) the inclusion of a reserves report preparedin accordance with both the definitions and standards of theSAMREC Code and the CIM Standards and the following cautionarystatement:

"No technical report, as defined underNational Instrument 43-101 - Standards for Disclosure of MineralProjects, will be provided in connection with this offeringor filed with any of the Canadian securities regulatory authorities.

This Offering Memorandum contains a reporton the reserves of the Issuer as at June 30, 2002 (the "ReservesReport") concerning mineral projects on each propertywhich is material to the Issuer. The reserve calculationsin the Reserves Report were prepared in accordance with SouthAfrican law and the South African code for Reporting of MineralResources and Mineral Reserves (the "SAMREC Code"),which prescribes the content of disclosure of scientific ortechnical information in respect of mineral projects, andshall be reported in the Offering Memorandum in accordancewith the applicable definitions contained in the SAMREC Codeand the standards of the Canadian Institute of Mining Metallurgyand Petroleum (the "CIM Standards")."

Rules Cited

National Instrument 43-101 B Standards of Disclosurefor Mineral Projects s. 9.1.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,MANITOBA,

ONTARIO AND QUEBEC

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

DURBAN ROODEPOORT DEEP, LIMITEDAND

CIBC WORLD MARKETS INC.

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Manitoba, Ontario and Québec(the "Jurisdictions") has received an applicationfrom Durban Roodepoort Deep, Limited (the "Issuer")and CIBC World Markets Inc. ("CIBC", and togetherwith the Issuer, the "Applicants") for a decisionpursuant to subsection 9.1(1) of National Instrument 43-101- Standards of Disclosure for Mineral Projects ("NI43-101") that the Applicants be exempt from Parts 2, 3,and 4 of NI 43-101 in connection with: (i) disclosure relatingto the Offering (as defined below); and (ii) the offering memorandum(the "Offering Memorandum") prepared by the Issuerfor the Offering;

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System")the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 - Definitions or in Québec, CommissionNotice 14-101;

AND WHEREAS the Applicants have representedto the Decision Makers that:

1. The Issuer is a company incorporated pursuantto the laws of the Republic of South Africa ("South Africa")with its head office in Johannesburg, South Africa. The Issueris a gold mining company with its principal operations inSouth Africa and exploration properties and production facilitiesin Papua New Guinea;

2. The Issuer's securities are listed andtraded on the JSE Securities Exchange South Africa (the "JSE"),the NASDAQ, the London Stock Exchange, the Brussels StockExchange, the Paris Bourse, the Australian Stock Exchange,the Berlin Stock Exchange, and the Frankfurt Stock Exchange.The principal trading markets of the Issuer are the JSE andthe NASDAQ;

3. The Issuer is not a reporting issuer orits equivalent in any of the Jurisdictions, nor are any ofits securities listed or posted for trading on any stock exchangein Canada. The Issuer has no present intention of becominga reporting issuer or its equivalent in any of the Jurisdictionsor of becoming listed in Canada;

4. The authorized capital of the Issuer consistsof 300,000,000 ordinary no par value shares (the "OrdinaryShares") and 5,000,000 cumulative preference shares (the"Preference Shares") of which 177,173,485 OrdinaryShares and 5,000,000 Preference Shares were issued and outstandingas of June 30, 2002;

5. As disclosed in its annual audited financialstatements for its fiscal year ended June 30, 2002, the Issuer'sgross revenues derived from mining operations were approximatelyUS$256.0 million for the fiscal year ended June 30, 2002,and approximately US$792.1 million in the aggregate for thethree fiscal years ended June 30, 2002. As a result, the Issueris a "producing issuer" as such term is definedin NI 43-101;

6. The Issuer intends to offer convertibledebentures (the "Notes") on a private placementbasis in several jurisdictions (the "Offering").CIBC will be the agent in respect of the Offering in Canadaand affiliates of CIBC and one or more other investment dealerswill be agents in other foreign jurisdictions in which theOffering is made;

7. The Applicants are in the process of settlingthe terms of the Notes, which shall be unsecured obligationsof the Issuer and convertible into either Ordinary Sharesor American deposit receipts ("ADRs"). The ADRsare listed for trading on NASDAQ. It is anticipated that theIssuer will provide a covenant to CIBC and the purchasersof the Notes to use its best efforts to file a registrationstatement with the United States Securities and Exchange Commissionwhich will register the ADRs to be issued upon conversionof the Notes;

8. CIBC anticipates that approximately 50%of the Offering will be made to purchasers in the United Statesand approximately 30% of the Offering will be made to purchasersin Canada. The remaining 20% of the Offering will be madeto purchasers in Europe and other foreign jurisdictions. CIBCanticipates that the Offering will be made to institutionalinvestors only;

9. The Offering Memorandum will contain areport on the reserves of the Issuer as at June 30, 2002 (the"Reserves Report") concerning mineral projects oneach property which is material to the Issuer. The reservecalculations in the Reserves Report were prepared in accordancewith South African law and the South African code for Reportingof Mineral Resources and Mineral Reserves (the "SAMRECCode"), which prescribes the content of disclosure ofscientific or technical information in respect of mineralprojects, and shall be reported in the Offering Memorandumin accordance with the applicable definitions contained inthe SAMREC Code and the standards of the Canadian Instituteof Mining Metallurgy and Petroleum (the "CIM Standards");

10. The Reserves Report has been preparedby William John Laing, Jans Johannes Jacobus Petrus Pretorius,Matthys Hendrik Greeff Heyns, Natalie Rose Ordenaal, and MichaelJohn Bird and compiled by David Stephanus Du Toit van denBergh, each of whom is an employee of the Issuer and who qualifiesas a "Competent Person" for the purposes of theSAMREC and JORC Codes. Each such person possesses greaterthan five years of relevant mining and geological surveyingexperience and is a registered member of a professional organizationrecognized by statute in South Africa;

11. The Issuer is a "producing issuer"under NI 43-101, and according to Part 5 thereof, in connectionwith the Offering, is not required to file an independenttechnical report;

12. The Reserves Report will be audited byMike Sperinck, a qualified person who is considered a "CompetentPerson" for the purposes of the SAMREC Code and in accordancewith South African law;

13. In connection with the Offering, the Issuerwill distribute the Offering Memorandum containing disclosureregarding the Issuer, the Reserves Report, the Notes, andany additional disclosure required in the jurisdictions inwhich the Offering is made. In particular, the Offering Memorandumwill contain disclosure required under Canadian securitieslaws applicable in the Jurisdictions related to, among otherthings, prospectus and registration exemptions, statutoryrights of action and exchange rate information;

14. The Offering Memorandum will contain thefollowing cautionary statement (the "Cautionary Statement"):

No technical report, as defined under NationalInstrument 43-101 - Standards for Disclosure of MineralProjects, will be provided in connection with this offeringor filed with any of the Canadian securities regulatory authorities.

This Offering Memorandum contains a reporton the reserves of the Issuer as at June 30, 2002 (the "ReservesReport") concerning mineral projects on each propertywhich is material to the Issuer. The reserve calculationsin the Reserves Report were prepared in accordance with SouthAfrican law and the South African code for Reporting of MineralResources and Mineral Reserves (the "SAMREC Code"),which prescribes the content of disclosure of scientific ortechnical information in respect of mineral projects, andshall be reported in the Offering Memorandum in accordancewith the applicable definitions contained in the SAMREC Codeand the standards of the Canadian Institute of Mining Metallurgyand Petroleum (the "CIM Standards");

15. The Issuer will file the Offering Memorandumin each of the Jurisdictions within 10 days of the closingof the Offering;

16. Upon completion of the Offering, personsor companies whose last address as shown on the books of theIssuer was in Canada, will not own, directly or indirectly,Ordinary Shares or securities convertible into Ordinary Sharesrepresenting more than 10% of the Ordinary Shares and willnot represent more than 10% of the total number of owners,directly or indirectly, of Ordinary Shares;

AND WHEREAS under the System this DecisionDocument evidences the decision of each Decision Maker (collectively,the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in NI 43-101 that providesthe Decision Maker with the jurisdiction to make the decisionhas been met;

THE DECISION of the Decision Makers pursuantto subsection 9.1(1) of NI 43-101 is that the Applicants areexempt from Parts 2, 3, and 4 of NI 43-101 in connection with:(i) disclosure relating to the Offering; and (ii) the OfferingMemorandum prepared by the Issuer for the Offering, providedthat the Offering Memorandum includes:

(a) a reference to this Decision; and

(b) the Cautionary Statement.

October 3, 2002.

"Margo Paul"