DRDGold made the most of the booming gold price in the year to end-June pushing operating profits 69% higher even as it funded its major transition to a longer-life operation treating higher volumes of lower-grade material.
The company spent R2.2bn in capital expenditure during financial 2025 and estimates it will invest another R7.8bn in the medium-term to achieve its “Vision 2028” strategy.
This strategy is planned to increase throughput to 3Mt/month through the Ergo and Far West Gold Recoveries (FWGR) plants which will increase gold production to more than 200,000oz/year compared with the 155,288oz reported for the year to June.
DRD CEO Niel Pretorius had previously warned shareholders that dividends would take a back seat against capital expenditure during this period but DRDGold has managed to double its final dividend to 40c a share making 70c for the year compared with a total of 40c a share for financial 2024.
Pretorius commented the critical issue for DRDGold was now to increase tailings deposition capacity for the Ergo plant.
Until this was achieved, he described DRDGold as being “very much in an in-between phase where much of what we do will depend on how effectively we manage the current Brakpan tailings storage facility (TSF) as it enters its final phase as an active deposition facility.”
The rate at which Ergo can deposit the tailings it has processed determines its production rate and Pretorius commented Ergo’s throughput will be “throttled” at around 1.65Mt/month until new deposition arrangements are ready in about a year’s time.
Ergo’s long-term future depends on the establishment of the Withok TSF which is situated immediately south of the existing Brakpan TSF. Commissioning of Withok is expected to begin within the next three years.
Until then DRDGold intends resuming deposition of material at the Daggafontein TSF near Springs to supplement the Brakpan TSF.
Pretorius commented, “We believe that moderating deposition on the Brakpan TSF, as we have been doing, is simply the responsible thing to do and the best way to avoid a complete suspension of deposition and thus production at Ergo.
“In the near term it means that Ergo’s production outlook will track that of the latter quarter of financial year 2025, especially since we are mostly into lower-grade dumps now.
“Once we have re-established additional deposition capacity, we will gradually return to a throughput of 1.8Mt/month from the beginning of the 2027 financial year for the remainder of Ergo’s operational life.”
Pretorius guided DRDGold’s production for the current financial year to June 2026 at between 140,000oz and 150,000oz of gold at cash operating costs of approximately R995,000/kg.
