DRDGOLD lays out ambitions but capital plans turn on security of tenure


DRDGOLD wanted to consolidate all surface tailings deposits in South Africa, but said future acquisitions would be measured against security of tenure in the country.

Currently, DRDGOLD processes gold tailings at its Ergo plant, east of Johannesburg, and the gold tailings near the West Rand facilities of Sibanye-Stillwater’s Kloof and Driefontein mines, known as Far West Gold Recoveries (FWGR).

The company generated R926.4m in free cash flow from an operating profit of R1.53bn in its 2020 financial year. It also paid a 35 cents per share final dividend – its 13th dividend in succession – and said that an interim payout was in the offing for its 2021 financial year after generating R300m in cash in the September quarter.

Cash on hand edged over R2bn as of end-September of which about half was after Sibanye-Stillwater exercised its right to lift its stake in DRDGOLD to just over 50%.

Commenting in DRDGOLD’s annual report for the 2020 financial year, chairman Geoff Campbell said, however, that political and economic developments would ultimate direct the firm’s capital allocation plans.

“The sizeable investment decisions DRDGOLD will be considering in the future will need to be weighed up against the risk of political instability and expropriation of land without compensation,” he said.

“The political outlook in South Africa remains extremely challenging and the Covid-19 pandemic has exacerbated the situation,” he said.

Niël Pretorius, CEO of DRDGOLD, said the company anticipated using ‘big data’ as the next step in “cracking the code” developing models of integrated, sustainable tailings management solutions; longer-term (2027 and beyond).

The company was “… looking to consolidate all surface tailings in South Africa and to international opportunities for surface mining,” he added.