Junior South African miner Village Main Reef has expressed interest in buying DRDGold's interest in its troubled Blyvoor mine for 150 million rand ($18.8 million), the two companies said on Tuesday.

The groups said in a joint statement the transaction would involve Village issuing 150 million ordinary shares to DRDGold, a mid-tier producer and South Africa's fourth largest gold miner.

DRDGold, which has a 74 percent interest in Blyvoor, had previously said it was in talks with a Chinese investor about the mine.

DRDGold in June suspended financial assistance to Blyvoor, a deep-level mine, and launched business rescue proceedings to save it as its production declined and costs climbed.

The group wants to get out of deep-level operations, which in South Africa are costly and dangerous, and focus on surface operations and the reclamation of gold residue from mine dumps.

A business rescue specialist has also been tasked to come up with a plan to turn the mine around.

It is estimated that the acquisition of Blyvoor's 85,000 ounces of gold production will result in Village producing more than 250,000 ounces of gold per annum, the statement said.

For DRDGold, the transaction eliminates any further funding exposure to Blyvoor.

DRDGold's share price was down 1.25 percent at 5.55 rand at 0726 GMT, underperforming the Johannesburg bourse's gold mining index which was up 1.5 percent on the back of bullion's solid gains on Monday.