UPDATE TO SHAREHOLDERS – DISTRIBUTION IN SPECIE AND SPECIAL DIVIDEND TO R&E SHAREHOLDERS

INTRODUCTION

• Shareholders of R&E are referred to the announcement released by the Company on SENS on 12 October 2010 and in the press on 13 October 2010 (“the announcement”) regarding the proposed distribution in specie of R&E’s shareholding in Gold Fields Limited (“Gold Fields”), comprising 2,270,687 ordinary shares in Gold Fields (“the Gold Fields Shares”), to shareholders of R&E (“R&E shareholders” or “the Shareholders”) and the proposed special dividend of 90 cents per share to the R&E Shareholders.  A circular (“the circular”)was posted to R&E shareholders today containing full details of the aforesaid distribution in specie and special dividend (collectively referred to as “the Distributions”) and incorporating a notice convening a general meeting of shareholders.

GENERAL MEETING

• Shareholders are advised that the general meeting at which the requisite approvals for the Distributions will be sought from the shareholders (“the general meeting”), as more fully set out in the circular, will be held at 11h00 on Tuesday, 30 November 2010 at MW Business Centre, Michelangelo Hotel, Mandela Square, Sandton, South Africa.

RELEVANT DATES

• Shareholders should note the following salient dates in regard to the Distributions. The last day to trade in order to participate in the Distributions will be on Friday, 7 January 2011, while trade in ordinary R&E shares will commence trading ex distribution in specie and ex special dividend on Monday, 10 January 2011.  The record date on which R&E shareholders must be recorded in the register to be entitled to the Distributions will be Friday, 14 January 2011.  The payment of the special dividend, as well as the distribution in specie in respect of the dematerialized R&E shareholders will occur on Monday, 17 January 2011, while the distribution in specie will be effected in respect of certificated R&E shareholders on or about Monday, 17 January 2011.  The above dates and times are subject to amendment.  Any such amendment will be released on SENS.

CONDITIONS PRECEDENT TO THE DISTRIBUTIONS

• • In terms of the JSE Listings Requirements, the distribution in specie is subject to the specific approval of the majority of the R&E shareholders being given by way of an ordinary resolution at a general meeting.

• • The special dividend and the distribution in specie, when taken together, are a disposal of assets in terms of section 228 of the Companies Act 61 of 1973, as amended, and are therefore subject to the approval of R&E shareholders by way of a special resolution in accordance with the requirements of the Companies Act.

PRO FORMA FINANCIAL EFFECTS

• The announcement contained a table in paragraph 4 thereof, detailing the pro forma financial effects of the Distributions.  Please note that the pro forma financial effects appearing in the announcement have subsequently been amended in the circular.  The amended pro forma financial effects are set out below:

The unaudited pro forma financial effects of the Distributions, as set out below are the responsibility of the directors of R&E. The unaudited pro forma financial effects are presented in a manner consistent with the basis on which the historical financial information has been prepared and in terms of R&E’s accounting policies. The unaudited pro forma financial effects have been presented for illustrative purposes only and, because of their nature, may not give a fair reflection of R&E’s financial position, nor of the effect on future earnings after the Distributions.

The table below sets out the unaudited pro forma financial effects of the Distributions, based on the unaudited condensed consolidated interim financial results for the six months ended 30 June 2010 and on the assumption that:

• For calculating the earnings per share (“EPS”) and headline earnings per share (“HEPS”), the Distributions were effected on 1 January 2010; and
• For calculating the net asset value per share (“NAV”) and net tangible asset value per share (“NTAV”), the Distributions were effected on 30 June 2010.

Notes and assumptions:

• • • • The “Before the Distributions” EPS and HEPS have been extracted without adjustment from the unaudited condensed consolidated interim statement of comprehensive income for the six months ended 30 June 2010.
      • The “Before the Distributions” NAV per share and NTAV per share have been extracted without adjustment from the unaudited condensed consolidated interim statement of financial position for the six months ended 30 June 2010.
      • The “After the Distributions” EPS, HEPS, NAV per share and NTAV per share have been adjusted to include the effect of the Distributions, as well as estimated transaction costs of R781 576 (excluding VAT) and expected STC and STT of R9,7 million.
      • The profit realised on the disposal of the Gold Fields Shares is assumed to have no tax effect as it is off-set against the Company’s calculated tax losses from prior years.

US SHAREHOLDERS

• US shareholders are referred to the company’s website www.randgoldexp.co.za), specifically the announcement published on 8 July 2010 for information regarding the US market.

Johannesburg

8 November 2010
Sponsor
PSG Capital (Pty) Limited