A MAJOR Johannesburg landmark – the Crown Mines complex of three huge mine dumps situated just south-east of the central business district – will start to be removed in about four years’ time in terms of DRDGold’s expansion plans.
Speaking at a presentation of the group’s results for the year to end-June today
DRDGold CEO Niel Pretorius commented the removal of the dumps would free up some 1,000 hectares of “prime” land owned by DRDGold for redevelopment. He did not put an estimated value on that land.
According to Pretorius, “our plan is to reclaim these dumps and treat them through Ergo creating what is referred to as a ‘corridor of freedom’ – hundreds of hectares of previously sterilised land cleared for redevelopment linking Johannesburg with Soweto.
“A huge environmental burden in terms of dust and water management will disappear and Ergo could ‘go out with a bang, not a whisper’”
Pretorius indicated the delivery of this project – along with a series of other major developments currently being undertaken by DRDGold in terms of a three-year expansion programme costing more than R10bn – should result in a re-rating of the DRDGold share price.
He acknowledged that the DRDGold share price had not performed as well as some of its South African peers over the past year during which the gold price had boomed.
“Our story is that, at some point in the not-too-distant future – as we start hitting some of these milestones – we believe that the market will start taking more comfort into our ability of executing on this program.”
Pretorius stressed the financial benefits to come once the expansion is completed and DRDGold will be producing 200,000oz of gold annually at lower unit treatment costs and would not be outlaying billions of rands on capital expenditure.
“I think the market may eventually start factoring in those numbers and they will start anticipating it. We do believe that this could be a very significant factor in terms of how our stock is interpreted and the value that it offers.”
Asked about the situation regarding proposed changes to the country’s mining legislation Pretorius replied, “there are certain aspects and principles that the mining industry is very firm about.
“As an industry we have decided to constructively engage and consult with government and government has agreed to engage with us.
“So we are giving consultation and engagement a go and we are hoping for a good outcome. If that does not work then the benefit of living in a constitutional democracy is that you have legal recourse. “
