Johannesburg- and New York-listed DRDGOLD’s projects under way are “advancing very well” as the gold-from-tailings company’s 2028 Vision gets a massive boost from the sky-high gold price.

Engineering News & Mining Weekly discussed this in a Zoom interview with DRDGOLD CEO Niël Pretorius and DRDGOLD CFO Riaan Davel, which we now publish following the recent declaration of an eighteenth consecutive financial year of dividend payout by the company that on April 25 will celebrate 130 years of being listed on the Johannesburg Stock Exchange.

The shareholders of DRDGOLD are continuing to benefit from consistently impressive on-surface gold recovery at the 13-year life-of-mine (LoM) Ergo, east of Johannesburg, as well as its rapidly advancing 20-year LoM Far West Gold Recoveries (FWGR) activities west of the Golden City.

“We’re working hard to optimise our existing asset base. Basically what we’re doing now is Ergo Two,” Pretorius added in referring to the initial life of mine plan for Ergo, acquired in 2007, having been mined out.

Ergo Two’s first new vital thrust is the cost-cutting 60 MW solar power plant at the tailings reprocessing plant, plus the commissioning of a 160 MWh battery energy storage system.

The second part of Ergo Two involves the expansion of the Brakpan tailings storage facility and commissioning of the Withok tailings facility in order to restore the throughput rate back to some 1.8-million tons a month.

That’s the target of Vision 2028, along with a whole new range of resources that will be accessed over the next few years.

At the same time, on the Far West Rand, taking progressive shape are the Far West Gold Recoveries activities involving repurposing and recommissioning the Driefontein Two plant’s throughput to 600 000 t a month, from its consistent current 500 000 t a month.

But, from the outset, work started on the design of the regional tailing storage facility (RTSF), where more than two-million cubic metres of material have been moved from the large 800 ha site.

The second component of the RTSF project is the doubling in size of the Driefontein Two plant to take it to 1.2-million tons a month, and through Vision 28, establishing the capital infrastructure to support a throughput of three-million ton a month.

This is about one-million tons higher than currently. Thereafter gold output will be increased by roughly a ton a year, or 40 000 oz, to take DRDGOLD to more than 200 000 oz, sustaining that for many years to come.

“These are exciting projects. They’re all going well,” Pretorius enthused.

The gold price at record highs is providing the ability to aggressively reinvest into supporting capital infrastructure.

DRDGOLD has spent close to R1-billion on capital infrastructure in the last six months, and has not had to dip into its debt facility set up during the course of last year.

Engineering News & Mining Weekly: How strong is DRDGOLD’s balance sheet and what are its added strength prospects in the light of the record gold price?

Davel: We’re very proud of our balance sheet. From 31 December 2023 to 31 December 2024, our property, plant and equipment grew by R3-billion and the majority of that investment has gone into the solar and battery system at Ergo, which is now practically complete. And then, it’s strong in that we still have cash in the bank of just over R600-million at the end of December. We’ve always invested in rehabilitation funds or assets on our balance sheet, so it’s really a strong foundation for us to grow from and the gold price is really supporting our growth. Our model is brilliant from that point of view, in that we are still operating fully at both Ergo and Far West Gold Recoveries, based on its capacity, and constraints that we want to address in the long term through our capital investment. But the high gold price is helping through those operations for us to prioritise our huge capital expenditure programme of almost R10-billion over the next three to four years, which supports that we don’t necessarily need to access other funds. We’ve told our shareholders that we will prioritise towards our capital programme, but it’s then wonderful, in a really good period like this, that we can also return some cash to our shareholders. So, very proud. It’s really positioned for growth our balance sheet, and looking forward to growing it further.

Can international surface-mining opportunities be operationalised by DRDGOLD – and if so, how?

Pretorius: It’s not an easy model to grow because you don’t grow by simply just buying up a whole bunch of old tailings dams across the globe. For one to be able to reclaim a mine dump, a tailings dam, there are a whole host of other things that need to be there as well. Ideally, you would want to have existing capital infrastructure in place, because to build the plants and to set up tailings disposal facilities and to run at the requisite throughput rate requires an enormous amount of capital. Typically, you would want to be in a position, like we’ve been with Ergo and with Far West Gold Recoveries, where there’s an existing plant that you could repurpose and upgrade to set it up for a high throughput profile. You also need lots of water and you need lots of electricity. Ideally, what you want is to become involved in the way that we became involved with Far West Gold Recoveries, where you’re almost running in parallel with an existing primary mining operation, before there’s been a deterioration in the quality of the existing capital infrastructure. Having said that, there are also not many large enough, concentrated tailings dams in the regions where we’ve been looking. We’re definitely looking at opportunities, but it will require a collaboration from the current owners of those operations. We believe that we do offer an opportunity. We offer solutions, both in terms of unlocking the latent value of what’s still in those old mine dumps, but at the same time also contributing, in some way or another, towards the ultimate closure and rehabilitation of existing mine sites. The old pattern of mining an operation to within eight years of closure, and then offloading it on to a new, emerging operator, is changing because the standards of environment, of environmental governance, have changed. Things have become more visible. There are better standards of transparency nowadays. Notwithstanding that an operation may be tucked away somewhere in a jungle, it still gets found, and your legacy is still witnessed. If it’s bad legacy, it’s obviously the sort of thing that doesn’t sit well, considering the sort of undertakings that are nowadays being given by major operators in terms of closure rehabilitation, standards of environmental governance and so forth. Many of those operations aren’t set up to bring about closure. The typical model is to offload an operation towards the end of its life. We could offer a solution by partnering with some of those operations and coming in at some point or another and saying, alright, from an ecosystem restoration perspective, from an improvement and an increase in restoring biodiversity, instead of you having to dip into your existing operating cash flows to do that, because clearly, these have been inadequately provided for, we can unlock some of the remaining value in there. From a collaboration perspective, there’s that opportunity. It’s not one that we’ve been able to unlock successfully. Sibanye-Stillwater has been our only success up until now. But there are conversations, and most of these conversations occur well, but it’s in putting these into effect. We’re having conversations, we’re assessing the quality of assets and so forth, and then we’re hoping to become involved in conversations that will hopefully open up some doors for us. In the meantime, though, we’ve got more than enough to keep ourselves busy, so whilst the opportunity is there, the ability is there, the willingness is there, there’s also the reality of having to make sure that we deliver into these very complex capital reinvestment programmes that we’re involved in right now. We’re very happy that the solar has been successfully commissioned. But there’s some other things that we need to finish as well. The RTSF is a very large facility. It’s on a tight timeline. There are also interactions with regulators and so forth that need to be done. The same applies to Withok, the plant upgrade. It’s more of an engineering thing, and we’ve shown ourselves to be capable of building these things to a very high standard, and they work, but still it requires very close attention, and we don’t want to be distracted unnecessarily. Has there been any success in your looking beyond gold to copper and platinum opportunities? Pretorius: There is a project that our team has managed to construct out of assets that were regarded as non-core. It’s a compelling project, and we did that in collaboration with Sibanye-Stillwater. But ultimately, it’s Sibanye-Stillwater’s decision, whether or not we’re going to be involved in that. It’s a company which, at this stage, is very busy. It’s got lots of moving parts, so it will happen as and when Sibanye-Stillwater decides that it’s a good time for it to happen. They may want to do it themselves as well. There’s no reason why they couldn’t. The design is elegant and our team has articulated the way to implement it really well. In terms of assets that we would want to acquire, we would want to do that in the copper and gold space. We understand gold, we’re comfortable with gold. We consider ourselves to be a gold miner and we talk about sustainable gold. But copper would also be a good one, and we know that there are vast copper deposits, on this continent and elsewhere, which could be developed over time. In terms of other metals, there really I think it would be a collaboration or we would serve as an expert service provider, as a consultant, but maybe an operational consultant to assist other operators to the extent that they believe that they can benefit from our value proposition, to set up infrastructure, to unlock the income generating potential of dormant stockpiles, waste stockpiles, and to apply that towards environmental restoration and the re-establishment of the original ecosystems and biodiversity. We’ve seen that at the Brakpan tailings facility. It’s a wonderful biodiversity story. We’ve never not been busy cladding the sidewalls of that facility. It’s a very gentle slope, and it keeps up with the raising of the tailing dam. We’ve cladded it with natural soil, and because of natural soil, natural vegetation came back, and it was just fantastic to see how nature restored itself, insects and rodents and reptile, snakes, jackal, warthog, birds. They don’t know that this is an artificial facility. They’re experiencing natural vegetation. It’s a waste dump, but it’s also almost like a green lung on the east of Johannesburg, and it’s lovely to witness that.