DRDGOLD will spend about R507m in order to access additional mineral reserves identified in a pre-feasibility study of its surface gold tailings east of Johannesburg.
The company said in an announcement today that the study, focused on tailings to the east of its ERGO Mining Properietary (Ergo) plant, showed an increase in mineral reserves to 312.6 million tonnes (Mt) from 170.9Mt previously.
This would extend the operating life of Ergo by 15 years to 2031 in which some three million ounces of gold would be mined compared to 1.8 million oz identified before the study.
“Capital expenditure of R507.7m is required to support proposed mining operations and to access the East Rand slime dumps and dams,” the company said in its announcement.
“This includes 162.4km of pipelines and pump stations. No major upgrades are required to the current processing plant,” the company said.
DRDGold has performed well in 2016 paying a hefty dividend of some R261m from its total free cash flow for the year to end-June of R308.7m.
Niel Pretorius, CEO of DRDGold said in August last year that it would be tough for DRDGold to beat its 2016 financial year performance in the current 2017 financial year.
He estimated total gold production “at the lower end” of a target range of 145,000 oz to 150,000 oz for the year, and said management’s message remained consistent in that “if there is free cash flow it will be distributed to shareholders”.
