DRDGold reports significant earnings growth and ambitious future plans

DRDGold’s headline earnings a share increased 69% and the dividend was raised 100% to 40 cents, following a greater level of stability and success during the year to June 30 and a robust gold price.

- EDWARD WEST

The share price fell slightly by 0.77% to R25.90 on Wednesday morning on the JSE, but in a reflection of investor confidence in improving fortunes at the company, the share price is up over 53% over 12 months.

The company, which has the retreatment of mine tailings as its core business, said Wednesday a “new normal” was established at Ergo and its life had been extended. Ambitious growth objectives were being pursued at Far West Gold Recoveries (FWGR).

CEO Niël Pretorius said within DRDGold “we talk about Ergo 1 - this was from 2008 when we acquired the operation through to the end of 2023, a time of higher yields and high throughput. We now talk about Ergo 2, an extension of the Ergo lifespan to beyond 2040 to process a resource base previously thought nonviable, through an expansion of deposition capacity and a re-modelled cost profile.”

Gold production at Ergo was 5% lower at 3 473kg for the year, reflecting a 21% decrease in yield to 0.178g/t. Throughput rose by 21% to 19.5Mt.

The lower yield reflected depletion of higher grade material from cleanup activities at Ergo’s completed reclamation sites, and a buildup in tonnage from new, lower grade reclamation sites.