JOHANNESBURG (miningweekly.com) – Surface miner DRDGold was preparing to sell off the last two deep mining gold assets within the group’s portfolio, possibly by year-end, DRDGold CFO Craig Barnes said on Tuesday.

The JSE-listed group planned to package and sell the discontinued East Rand Proprietary Mines (ERPM), on the East Rand, as well as the 50%-owned Zimbabwe-based exploration joint venture (JV) Chizim Gold.

The company declined to disclose the value and potential price of the assets, saying internal discussions on the matter were still ongoing.

DRDGold had considered various options, such as partnerships and JVs or even the unbundling and development of a new mining company, to exploit the assets, but believed that disposing of them would provide the greatest value addition for shareholders.

Further, underground prospects did not align with the company’s surface-mining strategy.

Barnes told Mining Weekly Online that the funds generated by the sale of the assets would be used to pursue further surface retreatment opportunities or to pay out special dividends.

He revealed that the 6 752 ha ERPM extensions 1 and 2 underground exploration tenements, along with the Cason shaft and plant, in which DRD injected over R25-million for further exploration purposes, was packaged and currently for sale.

The Cason shaft had been refurbished and recommissioned at a cost of R12-million, while a 6 000 t/m plant had been constructed at a cost of R13-million.

DRDGold would not invest further funds into the project for development purposes but would maintain its current R2-million-a-month maintenance operation until the disposal was complete.

“We expect these to make ERPM self-sustaining, in order to support the cost of additional underground exploration required to add value to the current inferred gold resource of about 21-million ounces,” CEO Niël Pretorius said in a statement.

DRDGold was also in talks about the possibility of packaging its current exploration operations in Zimbabwe after four of the five prospects indicated underground mining opportunities.

The group was currently undertaking exploration drilling at Leny, Ascot, John Bull, KT and various alluvial deposits, and the modest capital investment to date had been aimed at establishing the viability of alluvial and near-surface gold opportunities.

DRDGold would, however, continue to examine the viability of a few prospects for gold tailings reclamation in Zimbabwe.

Barnes was cautiously hopeful of concluding the two disposals by the end of this financial year, despite not having entered any serious talks or deals yet.