Dual-listed gold recycler DRDGOLD produced a satisfactory set of results for the 2023 financial year, ended June 30, despite various challenges, CEO Niël Pretorius says in the company’s annual integrated report.

The company posted a 14% increase in headline earnings to 148.2c for just under 170 000 oz of gold produced.

DRDGOLD’s volume throughput was 23-million tonnes at a yield of 0.229 g/t, which marks an 18% year-on-year decrease in throughput, but a 13% increase in yield.

By generating a cash operating profit of R1.8-billion, after paying R314-million in income tax and reinvesting R1.1-billion in capital expenditure, DRDGold was able to increase its total dividend for the year to 85c, compared with 60c in the prior year.

The company has uninterruptedly paid dividends for 16 years.

DRDGOLD’s operations consist of several retreatment sites across the East, Central and Far West Rand, in Gauteng, at which it blends material from multiple sites to ensure an optimal head grade, rather than focusing on mining out the highest-grade dumps.

Some of its high-volume reclamation sites have reached the end of their lives, to be replaced by four new sites at the Ergo operation and one at the Far West Gold Recoveries operation.

DRDGOLD explains that its volumes for the 2023 financial year were impacted on by delays to commissioning of these new sites owing to regulatory complexity around their water-use licences.

Pretorius says the company has learned valuable lessons in this regard, including by starting future water-use licence application processes earlier and taking proactive steps to fulfil the requirements of the regulator.

A few challenging weather events, including extreme rainstorms, also impacted on all the company’s sites, which warranted careful water management.

Of course, the company also struggled owing to high levels of electricity curtailment and loadshedding, more so than in prior financial years.

The company nonetheless managed to deliver decent results with higher grades from late-phase clean-up and the mechanical mining of legacy sites.

Group revenue also benefited from a favourable gold price in the year under review.

Meanwhile, DRDGOLD is progressing construction of a 60 MW solar photovoltaic plant at the Ergo operation in two phases of 20 MW and 40 MW, respectively, which will be wheeled to other production sites.

The first phase is nearing completion, while the second phase has been approved for start of construction.

The solar facility will considerably reduce the company’s operational risk amid continued loadshedding, as well as lower its cost of power and its carbon footprint.

DRDGOLD reports that R2-billion of its planned R3.5-billion capital programme for the new financial year is committed to this solar project.

Meanwhile, in the year under review, the company spent just under R42-million on environmental management, with 30 ha of land having been authorised for redevelopment by the National Nuclear Regulator.

DRDGOLD also invested R55-million in social and economic development activities in the year under review.

The group remains focused on business continuity and efficiency in the new financial year, including by controlling costs in a high-inflation environment.

Production guidance has been set at between 165 000 oz and 175 000 oz for the 2024 financial year, as the newly commissioned reclamation sites start to contribute.

TAILINGS CONSIDERATIONS

Pretorius says that, following recent experiences with the Department of Water and Sanitation (DWS), the company has decided to revisit its approach to the design of its environmental containment measures at its tailings storage facilities (TSFs).

“We were reluctant to go the route of having to use a synthetic liner and believed that our particular design without a liner would be as effective in preventing water pollution. However, the DWS’s commitment to the idea of a synthetic membrane is absolute and this design approach is, on balance, also favoured by most international institutions that concern themselves with tailings management,” Pretorius notes.  

He adds that DRDGOLD has abandoned the idea of challenging the regulator and filed an application to amend the design of the regional tailings storage facility (RTSF) on the Far West Rand to specify a synthetic liner.

The same will apply to the final life design of the Withok compartment of the Brakpan/Withok TSF.

The RTSF’s initial starter and outer wall, up to the tenth lift, will now also be built using a centre line or downstream design to add to the geotechnical stability of the facility. “We have submitted this application and have met with the regulator to gauge their stance,” Pretorius confirms.

Early signs are favourable and DRDGOLD is confident it will receive approval for the amendment to the licence conditions during the 2024 financial year. If so, it will start construction in 2024.

This accounts for a portion of the company’s budgeted capital spend for the year – about R284-million of R3.5-billion.

In the event that regulatory approvals are delayed, DRDGOLD has determined that fellow gold miner and shareholder Sibanye-Stillwater’s Leeudoorn TSF can serve as a viable interim alternative to the RTSF while regulatory approvals are obtained.

DRDGOLD confirms that its TSFs are developed and managed according to the Global Industry Standard on Tailings Management.