'There is no room for dynamic or scientific thinking at the department. When we get them together for a meeting it’s for them to say 'no''.
LAST year was a much quieter year for DRDGOLD after the fireworks of 2020, when its share price trebled and then dropped 50% over some six months as the gold price soared briefly above $2,000/oz and then pulled back. Nïel Pretorius prefers to talk gold in rand per kilogramme and on that basis, DRDGOLD is still doing rather nicely, thank you very much, with gold sticking in a range around R800,000/kg. The changes made to the company over the past few years and the beneficial way the merger with Sibanye-Stillwater has worked out have greatly increased what Pretorius calls the company’s "survivability", and he's sounding fairly relaxed about DRDGOLD's future prospects.
In August, Pretorius declared that DRDGOLD was in "much better shape than we have been in for at least seven out of the last ten years". The group could take gold prices below R600,000/kg if required, he says, adding that "... the share price would tank significantly but the fact is the business will still be around when the cycle turns". What Pretorius is not happy about is the general state of South Africa, which has negative impacts both indirectly on foreign investment, which the country badly needs, as well as directly on DRDGOLD's operations.
What really concerns him is the increasing level of crime and the growing state of anarchy in the country, which he describes as a "clear and emerging risk" to the mines. He may well want to add failings in the country’s technical expertise after the Department of Water and Sanitation rejected DRDGOLD's proposal for a new regional tailings facility on the west rand which is key to the group’s medium-term expansion. DRDGOLD is implementing an interim plan while it fights a regulatory battle over the new facility.