DRD has big plans with its ventures in Merafong

Workers putting up a sign at one of the new DRDGOLD sites near Carletonville in August.

In its integrated annual report for the year ended 30 June 2018 released today, CEO Niël Pretorius says: “The improved performance in our share price enabled us to pitch an offer to Sibanye-Stillwater for their West Rand surface gold portfolio at a share exchange ratio that struck a good balance between what we should be paying for the asset, and what they were asking for it.

How big or small the inflow of capital might be should Sibanye-Stillwater choose to exercise its option to increase its stake in DRDGOLD from 38% to 50.1% is entirely up to DRDGOLD shareholders who ultimately determine the share price,” Pretorius says.

DRDGOLD chairman Geoffrey Campbell says: “Not only does the transaction add significant longevity to our operations but also the dumps that we have acquired are of a higher grade than our existing dumps and therefore we expect the operations to be more profitable than our existing operations.

This will make DRDGOLD more resilient to a lower gold price, which is always a good thing.”

Development of Far West Gold Recoveries, which is expected to increase DRDGOLD’s reserves to approximately 6 million ounces, is planned in two phases.

Phase 1 development, already well under way, involves upgrading of the Driefontein 2 plant to treat material from the Driefontein 5 dam at a rate of 500 000 tonnes per month from early in calendar 2019.

Of the R300 million loan secured to finance Phase 1, Campbell says: “Our ability to borrow money at a time of dull gold price performance in a sector that is not attracting capital is further demonstration of DRDGOLD’s positive reputation.”

Phase 2, which involves consolidation of what remains of Phase 1 material and the remaining tonnes of material acquired, envisages a monthly production rate of 1.2 million tonnes and is planned to be enacted within 24 months after the start of Phase 1 production.

Key features of Phase 2, feasibility of which will be tested over the next two years, are the construction of a large, centralised plant and an ultra-high volume deposition facility.

Phase 2, Campbell says, has the potential to be “hugely significant” not just for DRDGOLD but for South Africa as a whole.

“With the right gold price and forward-looking government policies to support a fair and stable business environment to attract the necessary long-term capital, we could be looking at a much larger operation.

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