Proactiveinvestors USA & Canada DRDGOLD Limited https://www.proactiveinvestors.com Proactiveinvestors USA & Canada DRDGOLD Limited RSS feed en Fri, 18 Jan 2019 22:36:01 -0500 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[Media files - DRDGOLD has good commissioning for first phase of Far West Gold Recoveries project ]]> https://www.proactiveinvestors.com/companies/stocktube/11496/drdgold-has-good-commissioning-for-first-phase-of-far-west-gold-recoveries-project-11496.html Thu, 06 Dec 2018 10:51:00 -0500 https://www.proactiveinvestors.com/companies/stocktube/11496/drdgold-has-good-commissioning-for-first-phase-of-far-west-gold-recoveries-project-11496.html <![CDATA[News - DRDGOLD to start first phase of South African Far West Gold Recoveries project ]]> https://www.proactiveinvestors.com/companies/news/210420/drdgold-to-start-first-phase-of-south-african-far-west-gold-recoveries-project-210420.html Johannesburg-based DRDGOLD Ltd (NYSE:DRD) (JSE:DRD) said Monday it is set to commission its first phase of the Far West Gold Recoveries project in West Rand, South Africa starting Thursday.

This July, DRDGold completed the purchase of parts of Sibanye-Stillwater’s West Rand tailings dumps, which increased the company's gold reserves by 82%.

WATCH: DRDGold expands Broad-Based Livelihoods Programme to West Rand in S. Africa

DRDGOLD says it is targeting a processing rate of 500,000 tonnes per month.

Chief Executive Officer Niel Pretorius said the project is on track to achieve targeted production by the first quarter of next year.

The company said that starting Thursday, material will be pumped from the Driefontein 5 dam through a 2 km pipeline to the Driefontein 2 plant.

A parallel pipeline to return water from the plant to the site has been completed, as well as an 8 km pipeline to take retreated tailings from the plant to the Driefontein 4 tailings dam and a parallel pipeline back from the dam to the plant. 

The first phase is expected to contribute to DRDGold’s bottom line by the second half of its 2019 financial year.

In phase two, scheduled to come online two years after phase one, a central high-volume processing facility and new deposition site will be developed to handle about 1.2 million tons of material monthly from different sources.

 

Contact Katie Lewis at katie@proactiveinvestors.com

Follow her on Twitter: @kelewis

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Mon, 03 Dec 2018 14:35:00 -0500 https://www.proactiveinvestors.com/companies/news/210420/drdgold-to-start-first-phase-of-south-african-far-west-gold-recoveries-project-210420.html
<![CDATA[Media files - DRDGold expands Broad-Based Livelihoods Programme to West Rand in S. Africa ]]> https://www.proactiveinvestors.com/companies/stocktube/11374/drdgold-expands-broad-based-livelihoods-programme-to-west-rand-in-s-africa-11374.html Thu, 29 Nov 2018 09:56:00 -0500 https://www.proactiveinvestors.com/companies/stocktube/11374/drdgold-expands-broad-based-livelihoods-programme-to-west-rand-in-s-africa-11374.html <![CDATA[Media files - DRDGOLD updates yearly achievements and Far West Gold Recoveries Project ]]> https://www.proactiveinvestors.com/companies/stocktube/11106/drdgold-updates-yearly-achievements-and-far-west-gold-recoveries-project-11106.html Mon, 05 Nov 2018 14:24:00 -0500 https://www.proactiveinvestors.com/companies/stocktube/11106/drdgold-updates-yearly-achievements-and-far-west-gold-recoveries-project-11106.html <![CDATA[News - DRDGOLD eyes expansion of metals output in 2019 as it seeks to reduce risks and costs ]]> https://www.proactiveinvestors.com/companies/news/208334/drdgold-eyes-expansion-of-metals-output-in-2019-as-it-seeks-to-reduce-risks-and-costs-208334.html DRDGOLD Ltd (NYSE:DRD) (JSE:DRD) is looking to further reduce costs and anticipating the expansion of its operations in the next year while saying it has made significant progress on cutting costs and mitigating risks this year, according to the company's annual report for 2018.

"There is much to look forward to in the coming year and beyond as we develop Far West Gold Recoveries. We will continue to seek out further efficiencies and look for ways to optimise our operations," company Chairman Geoffrey Campbell said in a letter in DRDGold's annual report.

The company is busy upgrading the newly acquired facilities and secured 300 million-rand ($20.64 million) loan to finance the work.

"Our ability to borrow money at a time of dull gold price performance in a sector that is not attracting capital is further demonstration of DRDGOLD’s positive reputation," Campbell added.

He said the company plans to have Phase 1 of the work in place by first quarter of 2019, adding approximately 120 kg of gold a month to the overall production. 

"Phase 2 has the potential to be hugely significant, not just for DRDGOLD, but for South Africa as a whole," he added. "With the right gold price and forward-looking government policies to support a fair and stable business environment to attract the necessary longterm capital, we could be looking at a much larger operation," Campbell concluded.

The South African gold producer and specialist in the recovery of the metal from surface tailings concluded its acquisition of the Far West Gold Recoveries assets from Sibanye-Stillwater on July 31, 2018.

“The improved performance in our share price enabled us to pitch an offer to Sibanye-Stillwater for their West Rand surface gold portfolio at a share exchange ratio that struck a good balance between what we should be paying for the asset, and what they were asking for it," said CEO Niël Pretorius.

The company's report said it will seek to ensure full value is realized from its products by focusing on consistent volumes and managing costs.

DRDGOLD would seek to contain our cash operating costs within budget and below mining inflation, contain the cash operating cost per ton within budget and below mining inflation, achieve stable, predictable volume throughput of  2.1 metric tons per month, and generate positive free cash flow to distribute to our shareholders and invest in other capitals to ensure the sustainable business of DRDGOLD among others.

BIG PICTURE: DRDGOLD glitters with vast reserves in its flagship Ergo and Sibanye-Stillwater West Rand Project

The company said it would try to keep the cash operating costs per ton to 89 rand ($6.10) by achieving the following measures:

Total cash operating costs increased by 3% Inflationary increases were offset by the realization of the cost-benefit after the clean-up of the crown legacy sites and specific investments in cost-saving initiatives Volume throughput decreased slightly from 25 metric tons in full-year 2017 to 24.3 metric tons All-in sustaining costs (AISC) margin increased to 5.5% from 3.2% in the prior year

The company generated a positive free cash flow of R93.4 million ($6.42 million) compared to a free cash outflow of R45.1 million ($3.1 million) in 2017, mainly as a result of a good operational performance characterized by a 10% increase in gold production and cost benefits realized.

Price risks could affect earnings

DRDGOLD said in its report that the major risks to revenue and earnings are that both are dependent on the prevailing price of gold.

"Historically, the gold price has fluctuated widely being affected by a number of factors over which the company has no control," the company said.

"DRDGOLD’s profitability may be negatively affected if revenue from gold sales drops below the cost of production for an extended period. As most of the Group’s operating costs are in rand while gold is generally priced in dollars, DRDGOLD’s financial condition could be materially harmed in the future by  an appreciation in the value of the rand."

Recently, a zero-cost collar was entered into to manage the increased liquidity risk as a result of external borrowings, which were secured to fund Far West Gold Recoveries. DRDGOLD has committed 50,000 ounces of gold under a zero-collar with a floor of R565,000 per kg ($38,875) and a ceiling of just under R609,000 per kg ($41,900), spread equally over the next nine months and is cash settled at the end of each month.

DRDGOLD continues to invest in manufactured capital to help manage recoveries and enhance extraction efficiencies and remain resilient in the face of a volatile gold price, it said.

The other costs for the companies include labor, steel, electricity, water, re-agents, fuels, lubricants, and other oil- and petroleum-based products. Many of these consumables are linked to the price of oil and steel and fluctuate accordingly. Also, the majority of the South African labor force is unionized and wage increase demands have, in recent years, "been above the prevailing rates of inflation," the report added.

READ: DRDGOLD reports higher profit and production; upbeat about 2019 prospects

DRDGOLD’s mining operations are also dependent on electrical power supplied by Eskom which has, over the years, imposed tariff increases that have had an adverse effect on DRDGOLD’s operating costs. "The winter tariff imposed by the power utility is particularly onerous," it said.

There is also what the company calls "our social licence to operate (which) refers to the level of acceptance or approval by local communities and stakeholders (including local government) of the Group’s operations and methods of conducting business."

"A social licence to operate is based on the principle that a company needs not only official government permits and licences to conduct its business but also the support of those living and working in its operational jurisdictions. The company may not always be able to control the circumstances that affect its social licence to operate," the report explained.

DRDGOLD, like other mining companies in South Africa, is subject to extensive mining legislation and regulations. In June 2018, the Minister of Mineral Resources published a draft 2018 Mining Charter for public commentary. This revision was intended to address concerns on the previously released draft in June 2017.

Reporting by Rene Pastor, contactable on rene.pastor@proactiveinvestors.com

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Thu, 01 Nov 2018 09:24:00 -0400 https://www.proactiveinvestors.com/companies/news/208334/drdgold-eyes-expansion-of-metals-output-in-2019-as-it-seeks-to-reduce-risks-and-costs-208334.html
<![CDATA[News - DRDGOLD reports higher profit and production; upbeat about 2019 prospects ]]> https://www.proactiveinvestors.com/companies/news/204273/drdgold-reports-higher-profit-and-production-upbeat-about-2019-prospects-204273.html DRDGOLD Ltd (JSE:DRD) (NYSE:DRD) reported on Wednesday an increase in both operating profit and gold production, saying the prospects for the company going into 2019 are bright.

The company said its year-on-year operating profit climbed 38% to R355.2mln (US$23.01mln) while gold output rose 10% to 4,679kg, although the average rand price for gold received slipped 3% to R534.34/kg (US$34.63/kg).

The company announced that while its long-term strategy is to remain unhedged and to keep borrowings at a minimum, the need for medium-term borrowings for the first-phase development of Far West Gold Resources  (FWGR) introduced some liquidity risk.

To mitigate or reduce the risk, DRDGOLD has traded a zero-cost collar to provide price protection against a possible decrease in the rand gold price while borrowings are in place. A zero-cost collar is an option-based strategy that offsets the volatility risk by putting a cap and a floor as a form of insurance against possible losses.

Shares of DRDGOLD in Johannesburg gained 3.2% to settle on Wednesday at R322. In New York, the stock was trading 1.2% higher at US$2.07 on Wednesday.

BIG PICTURE: DRDGOLD glitters with vast reserves in its flagship Ergo and Sibanye-Stillwater West Rand Project

As for FWGR and the recently acquired West Rand Tailings Retreatment Project (WRTRP), the company said an R300mln (US$19.44mln) revolving credit facility has been secured from ABSA Bank Limited and work has already begun on the first phase of its development.

Phase 1 involves the upgrading of the Driefontein 2 plant to process tailings from the Driefontein 5 dump at a rate of between 400 000 and 600 000 tonnes per month and depositing the residue on the Driefontein 4 tailings dam. First production is expected in the first quarter of calendar 2019.

The FWGR acquisition increases DRDGOLD’s gold reserves by approximately 82% to 6mln oz.

Three major projects at its Ergo project were completed by the end of FY2018. For 2019, gold production of between 148,000 and 154,000 ounces is planned, at a cash operating cost of around R490,000/kg (US$31,754), DRDGOLD said.

DRDGOLD is a South African gold producer and a specialist in the recovery of the metal from the retreatment of surface tailings.

(R1 = US$0.065)

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Wed, 05 Sep 2018 14:22:00 -0400 https://www.proactiveinvestors.com/companies/news/204273/drdgold-reports-higher-profit-and-production-upbeat-about-2019-prospects-204273.html
<![CDATA[News - DRDGOLD says Phase 1 development of Far West Gold Recoveries under way ]]> https://www.proactiveinvestors.com/companies/news/202586/drdgold-says-phase-1-development-of-far-west-gold-recoveries-under-way-202586.html DRDGOLD Ltd (NYSE:DRD) (JSE:DRD) said Phase 1 of the development of Far West Gold Recoveres is underway and gold production from the project is expected to kick off by the first quarter of 2019.

CEO Niel Pretorius broke ground to mark the start of the project Monday; by Wednesday, the first 100 meters of the pipeline — from the Driefontein 5 dump to the Driefontein 2 plant — had been installed.

This comes within a week of DRDGOLD concluding its acquisition of Sibanye-Stillwater’s West Rand Tailings Retreatment Project, which will now be known going forward as Far West Gold Recoveries. The acquisition increases DRD's gold reserves by 90%.

BIG PICTURE: DRDGOLD glitters with vast reserves in its flagship Ergo and Sibanye-Stillwater West Rand Project

The development began by upgrading the Driefontein 2 plant to process tailings from the Driefontein 5 dump at a rate of between 400 000 and 600 000 tonnes per month (tpm) and depositing the residue on the Driefontein 4 tailings dam. 

DRDGOLD is a South African gold producer and the world's leading producer of the precious metal from tailings, which are the byproducts left over from mining. Its technology allows recovery of up to 40% of the gold left in particle form.

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Thu, 09 Aug 2018 07:58:00 -0400 https://www.proactiveinvestors.com/companies/news/202586/drdgold-says-phase-1-development-of-far-west-gold-recoveries-under-way-202586.html
<![CDATA[Media files - DRDGOLD hits the ground running with Sibanye-Stillwater acquisition ]]> https://www.proactiveinvestors.com/companies/stocktube/10023/drdgold-hits-the-ground-running-with-sibanye-stillwater-acquisition-10023.html Thu, 02 Aug 2018 10:13:00 -0400 https://www.proactiveinvestors.com/companies/stocktube/10023/drdgold-hits-the-ground-running-with-sibanye-stillwater-acquisition-10023.html <![CDATA[News - South African miner DRDGOLD completes acquisition of Sibanye-Stillwater’s WRTRP assets ]]> https://www.proactiveinvestors.com/companies/news/202015/south-african-miner-drdgold-completes-acquisition-of-sibanye-stillwaters-wrtrp-assets-202015.html Johannesburg-based DRDGOLD Ltd (NYSE:DRD JSE:DRDRGOLD) announced Wednesday that it had completed its acquisition of gold and platinum miner Sibanye-Stillwater’s West Rand Tailings Retreatment Project (WRTRP) assets.

In March this year, DRDGOLD shareholders voted in favor of the miner’s proposed acquisition of Sibanye’s WRTRP assets.

The miner received the green light from its shareholders to issue 265 million shares to Sibanye-Stillwater in return for its WRTRP assets, resulting in Sibanye holding 38% of DRDGOLD.

The transaction, valued at R1.3bn (roughly US$110mln), also gives Sibanye-Stillwater the option to buy another 12.1% of DRDGOLD shares.

BIG PICTURE: DRDGOLD glitters with vast reserves in its flagship Ergo and Sibanye-Stillwater West Rand Project

With the WRTP acquisition under its belt, DRDGOLD plans to build a large plant to process a million tons a month, and a tailings storage facility which could act as a catalyst to consolidating more dumps west of Johannesburg.

“This acquisition is key to DRDGOLD’s growth strategy, increasing our gold reserves by 90%. The way is now clear for us to expedite Phase 1 of our phased plan for the development of WRTRP, to be known going forward as Far West Gold Recoveries,” lawyer turned DRDGOLD CEO Niel Pretorius said in a statement.

The West Rand Tailings Retreatment Project will nearly double the miner’s gold reserves from 2.99 million ounces to 5.9 million ounces. That is just one part of the good news for investors.

In more good news, Sibanye’s Driefontein and Kloof mines near Carletonville are relatively rich in gold compared with what it has been mining so far to the east.

“We may get a higher yield based on the amount of gold we produce per ton,” Pretorius earlier told Proactive Investors.  

“If done properly, the West Rand tailings retreatment project could deliver 43 tons of gold over the next 15 to 20 years, adding to the 40 tons that would come from the Ergo plant over the same time frame,” he added.

DRDGOLD wants to bring the high-grade tailings dumps into production by early 2019.

“We have secured a R300mln revolving credit facility from a South African Financial Institution for Phase 1, confirmed orders for most of the long lead items, and expect to be in production in the first quarter of calendar year 2019,” said Pretorius.

According to Pretorius, phase 1 involves upgrading the Driefontein 2 plant to process tailings from “the Driefontein 5 dump at a rate of between 400,000 and 600,000tpm and depositing the residue on the Driefontein 4 tailings dam.”

With the WRTP acquisition under its belt, DRDGOLD plans to build a large plant to process a million tons a month, and a tailings storage facility which could act as a catalyst to consolidating more dumps west of Johannesburg.

The West Rand assets currently include a range of gold-bearing dumps near Carletonville west of Johannesburg, as well as three processing plants.

According to analysts, the acquisition transforms DRDGOLD in one stroke giving it a platform from which to grow aggressively into Africa and other commodities. It also cuts overhead unit costs through increased production and puts an end to DRDGOLD’S single asset operating risk.

Contact Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter: @UttaraProactive 

 

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Wed, 01 Aug 2018 07:56:00 -0400 https://www.proactiveinvestors.com/companies/news/202015/south-african-miner-drdgold-completes-acquisition-of-sibanye-stillwaters-wrtrp-assets-202015.html
<![CDATA[News - DRDGOLD to voluntarily exit Euronext exchange due to rule change ]]> https://www.proactiveinvestors.com/companies/news/197860/drdgold-to-voluntarily-exit-euronext-exchange-due-to-rule-change-197860.html DRDGOLD Ltd (NYSE:DRD) announced Tuesday that it will voluntarily terminate its listing on the Euronext exchange, starting Wednesday, to be in compliance with European regulations.

But The South African gold producer, which is one of the oldest continuously listed South African miners on the Johannesburg Stock Exchange (JSE), will keep its primary listing as well as its secondary listing on the New York Stock Exchange via American Depositary Receipts. The trading of the company’s securities via the regulated unofficial market on the Frankfurt Stock Exchange and the Berlin and Stuttgart over-the-counter markets will also stay the same.

DRDGold’s move to voluntarily end its Euronext listing stems from rule changes, which kicked off last year, when Euronext decided to close its link with the South African securities market via its French central securities depositary, Euroclear.

READ: DRDGOLD glitters with vast reserves in its flagship Ergo and Sibanye-Stillwater West Rand Project

“In the circumstances, trading of DRDGOLD’s securities on the Euronext was no longer possible and Euroclear subsequently undertook a process to transfer the DRDGOLD securities held by French shareholders to a South African central securities depositary, such that the DRDGOLD securities remained tradable on the JSE,” DRDGOLD explained in a statement.

Historically, the liquidity of DRDGOLD shares traded on the Euronext has been modest. The total volume of DRDGOLD shares traded on this exchange between June 2016 and June 2018 came to less than 0.2% of the total number of DRDGOLD securities in issue.

“In light of the above and the fact that the DRDGOLD securities are no longer tradable on the Euronext, a decision was made to apply for the termination on said exchange,” the company added.

DRDGOLD’s ADR shares rose slightly to US$2.75 in afternoon trade.

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Tue, 29 May 2018 14:03:00 -0400 https://www.proactiveinvestors.com/companies/news/197860/drdgold-to-voluntarily-exit-euronext-exchange-due-to-rule-change-197860.html
<![CDATA[News - DRDGOLD glitters with vast reserves in its flagship Ergo and Sibanye-Stillwater West Rand Project ]]> https://www.proactiveinvestors.com/companies/news/196086/drdgold-glitters-with-vast-reserves-in-its-flagship-ergo-and-sibanye-stillwater-west-rand-project-196086.html Johannesburg-based DRDGOLD Ltd’s (NYSE:DRD) century-old pedigree gives it an unmatched cache among South African miners. 

“We are older than Hong Kong,” quipped lawyer turned DRDGOLD CEO Niel Pretorius. “We’ve been around six or seven years before the Wright Brothers had their first flight, so we are from a completely different era.”

Founded in 1895, alongside other mining giants that have come and gone, DRDGOLD is the oldest continuously listed miner on the Johannesburg Stock Exchange. It’s ADRs are listed on the New York Stock Exchange. 

Pretorius is right about the miner stepping out from the shadows of a “completely different era.”

“Initially it was all underground mining, so you can imagine the amount of scarring and environmental impact from the mining in the Johannesburg area. We were just one of many mines,” said Pretorius, who eased into the CEO hot seat, after being the company lawyer for many years.

“One of the things that appeals to me as a modern-day executive is that our business model involves removal of the old legacy sites and cleaning up. You can’t clean up 120 years of legacy in 10 or 15 years, and we have made some mistakes in the past, like selling assets to the wrong people only to see years of rehab neglected, but we are making steady progress.”

From tailings to treasure

DRDGOLD is a highly unusual miner as it literally cleans up the environment by re-treating old mine dumps and opening sterilized land for development. It was one of the first South African companies to jettison traditional mining to focus on extracting gold from tailings, which are the byproducts left over from mining, like ore for example.

Its new technology allows it to recover up to 40% of the gold left in particle form in tailings. DRD Gold extracted 143,457 ounces of gold in the 2016 fiscal year and declared mineral resources of 50.67 million ounces.

When you think of the miner’s business, picture high-pressure hydraulic hoses that slurrify and combine slime and sand, then deliver the mixture through pipelines over vast distances to be processed.

As an investment, DRDGOLD has other key advantages over traditional miners as it faces fewer health, safety, exploration and environmental risks.

It is one of the world's largest producers of gold from tailings, specializing in the retreatment of surface gold tailings around Johannesburg. It’s a rapidly expanding mid-tier unhedged gold producer.

This 120-year-old miner is staying the course by developing and refining its strategy to mine not only profitably, but also optimally ensuring that its business remains sustainable over the long haul.

Riding on the mothership

DRDGOLD’s flagship metallurgical plant, Ergo, some 31 miles east of Johannesburg in Brakpan, and the Knights plant in Germiston, together make up the world’s biggest gold surface tailings retreatment facility.

The miner banks heavily on the recovery of “lower-risk, higher-margin ounces” from its sprawling Ergo plant, which has assets covering an area roughly 38.5 miles east to west and 15.5 miles from north to south.

“In Star Wars, you’ll see the big mothership and then all the other tiny spaceships hovering and darting in and out. Ergo is increasingly playing the role of the Mothership in terms of the infrastructure, intellectual capital, and capacity it channels,” said Pretorius. 

“It’s where you go to dock and because it’s stable and has a straightforward cost profile, Ergo provides opportunities for the likes of the Knights plant, for instance, to focus on their volume high-grade material,” he added.

Ergo gives the South African miner access to nearly 900 million tons of tailings deposited across the western, central and eastern Witwatersrand. Four plants were initially involved in the retreatment of tailings, but Pretorius has cut costs by prudently decommissioning the Crown and City Deep plants and converting them into milling and pump stations.

The new consolidated Ergo plant operation has a 25.2-million-ton annual capacity to process gold-bearing material from a variety of sources delivered through feeder lines.

“The Ergo plant itself has enough material to continue mining for many years long past my life. Since it is well-established it’s always improving its technologies, methodologies, and management practices. It plays an anchor role for us to find opportunities,” said Pretorius.

Higher yield, Pretorius says, is being achieved both from improved performance at the Ergo plant – reflecting further benefits flowing from the plant’s automated monitoring system – and from a more stable flow of material to the plant.

The West Rand Project to fuel reserves

In March this year, DRDGOLD shareholders voted in favor of the miner’s proposed acquisition of gold and platinum miner Sibanye-Stillwater’s West Rand Tailings Retreatment Project (WRTRP).

The miner received the green light from its shareholders to issue 265 million shares to Sibanye-Stillwater in return for its WRTRP assets, resulting in Sibanye holding 38% of DRDGOLD.

The transaction, valued at R1.3bn (roughly US$110mln), also gives Sibanye-Stillwater the option to buy another 12.1% of DRDGOLD shares.

With the WRTP acquisition under its belt, DRDGOLD plans to build a large plant to process a million tons a month, and a tailings storage facility which could act as a catalyst to consolidating more dumps west of Johannesburg.

The West Rand assets currently include a range of gold-bearing dumps near Carletonville west of Johannesburg, as well as three processing plants.

According to analysts, the acquisition transforms DRDGOLD in one stroke giving it a platform from which to grow aggressively into Africa and other commodities. It also cuts overhead unit costs through increased production and puts an end to DRDGOLD’S single asset operating risk.

DRDGOLD wants to bring the high-grade tailings dumps into production by early 2019. The new West Rand crown jewel virtually doubles the miner’s gold reserves, giving it immediate access to facilities that can generate cash for it in a matter of months

Watch: DRD Gold Ltd makes headway on WRTRP acquisition, submits environmental impact assessment

“What makes it so attractive from our perspective is that we don’t have to spend enormous capital to get it up and running. We are buying existing infrastructure that we can adapt to receive tailings material and we can have a new cash flow pretty soon,” said Pretorius.

“There are one or two regulatory steps, but they are almost completed.”

DRDGOLD is waiting on the regulators to issue environmental permits as large water lines crisscross the WRTRP project area.

“We had to put up environmental guarantees for any impact to the environment. They have been put into place so everything that needs to be done for this to go through has been done. Hopefully we are talking about weeks, and not months,” said Pretorius. “The environmental regulators seem happy.”   

Attractive for gold bulls

The West Rand tailings retreatment project will nearly double the miner’s gold reserves from 2.99 million ounces to 5.9 million ounces. That is just one part of the good news for investors.

In more good news, Sibanye’s Driefontein and Kloof mines near Carletonville are relatively rich in gold compared with what it has been mining so far to the east.

“We may get a higher yield based on the amount of gold we produce per ton,” said Pretorius.  

“If done properly, the West Rand tailings retreatment project could deliver 43 tons of gold over the next 15 to 20 years, adding to the 40 tons that would come from the Ergo plant over the same time frame,” he added.

DRDGOLD’s appeal lies with the gold bull. The mid-tier, unhedged gold producer and world leader in surface gold tailings retreatment is an attractive play as bullion prices climb. 

The gold market may be obsessed about the dollar and prospect of a rise in US interest rates. But there’s another factor looming on the horizon: a fall in gold mine supply. After rising every year since 2008 global gold supply plateaued last year, and may have peaked, according to the World Gold Council.

Indeed, the average spot price of gold rose to $1,329 a troy ounce in the three months ended in March, up from $1,219 a troy ounce in the prior-year quarter.

Read: DRDGOLD Limited shareholders give green light to “step-change” WRTRP acquisition

In February, DRDGOLD posted a 27% increase in profit to R$219.9mln and declared an interim dividend of R$0.05 per share for the fiscal year ended December 31, 2017.

“We have been paying out steady dividends for 10 years,” said Pretorius.

Analysts from Nedbank, one of the largest banks in South Africa, wrote in a note to clients that the miner’s operational performance showed “a strong turnaround.” 

“The operational performance showed a strong turnaround with output up 11% on higher yields. This resulted in an 8% drop in unit costs, which saw both headline earnings and cash flows increasing sharply, enabling the company to declare a US$0.05 cents interim dividend,” wrote Nedbank analysts Leon Esterhuizen and Arnold van Graan. 

“The benefits of the ongoing cost reduction and efficiency improvement initiatives further aided unit costs,” noted the analysts.

Not surprisingly, mining shares are catapulted by gold prices, and as finite gold supplies dwindle miners like DRDGOLD will literally be worth their weight in gold. The shares currently trade in a small, but liquid market with a track record of holding value.

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Mon, 30 Apr 2018 14:40:00 -0400 https://www.proactiveinvestors.com/companies/news/196086/drdgold-glitters-with-vast-reserves-in-its-flagship-ergo-and-sibanye-stillwater-west-rand-project-196086.html
<![CDATA[Media files - DRD Gold Ltd makes headway on WRTRP acquisition, submits environmental impact assessment ]]> https://www.proactiveinvestors.com/companies/stocktube/9139/drd-gold-ltd-makes-headway-on-wrtrp-acquisition-submits-environmental-impact-assessment-9139.html Tue, 24 Apr 2018 12:54:00 -0400 https://www.proactiveinvestors.com/companies/stocktube/9139/drd-gold-ltd-makes-headway-on-wrtrp-acquisition-submits-environmental-impact-assessment-9139.html <![CDATA[News - DRDGOLD Limited shareholders give green light to “step-change” WRTRP acquisition ]]> https://www.proactiveinvestors.com/companies/news/194065/drdgold-limited-shareholders-give-green-light-to-step-change-wrtrp-acquisition-194065.html DRDGOLD Limited (NYSE:DRD) shareholders have given their backing to a “step-change” deal, which will see the South African miner acquire the West Rand Tailings Retreatment Project from Sibanye-Stillwater.

New York-listed DRD first announced the deal, which is valued at 1.3bn Rand (US$110mln), towards the end of 2017.

READ: Link to full news release

As part of the acquisition, DRD will issue 265mln shares to Sibanye-Stillwater, equivalent to a 38% stake.

Sibanye-Stillwater also has the option to increase its holding in DRDGold to up to 50.1% within 24 months, while a mandatory offer by Sibanye-Stillwater to DRDGOLD’s other shareholders is waived.

“This transaction is a step-change for DRDGOLD. We have doubled our reserves and secured infrastructure to access these very quickly,” said chief executive Niël Pretorius.

“After many years of consolidation this is a major advance towards growing our company.”

The WRTRP acquisition will almost double the company’s gold reserves from 2.99mln ounces (Moz) to 5.75Moz.

Shares were down 0.36% to US$2.74 in mid-afternoon trading on Thursday.

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Thu, 29 Mar 2018 14:42:00 -0400 https://www.proactiveinvestors.com/companies/news/194065/drdgold-limited-shareholders-give-green-light-to-step-change-wrtrp-acquisition-194065.html
<![CDATA[Media files - DRDGOLD's reserves to nearly double following Sibanye-Stillwater acquisition ]]> https://www.proactiveinvestors.com/companies/stocktube/8845/drdgold-s-reserves-to-nearly-double-following-sibanye-stillwater-acquisition-8845.html Mon, 05 Mar 2018 15:59:00 -0500 https://www.proactiveinvestors.com/companies/stocktube/8845/drdgold-s-reserves-to-nearly-double-following-sibanye-stillwater-acquisition-8845.html