Proactiveinvestors USA & Canada DRDGOLD Limited https://www.proactiveinvestors.com Proactiveinvestors USA & Canada DRDGOLD Limited RSS feed en Mon, 24 Jun 2019 06:01:36 -0400 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Junior gold stocks are outperforming precious metal indices as gold presses towards US$1,400 ]]> https://www.proactiveinvestors.com/companies/news/222520/junior-gold-stocks-are-outperforming-precious-metal-indices-as-gold-presses-towards-us1400-222520.html The gold price hit a five-year high Friday morning after a week of gains, trading at US$1,398 after the US Federal Reserve on Wednesday seemed to indicate an interest-rate cut is on the horizon.

According to an analysis undertaken by Bloomberg, markets are now pricing in a 76% chance of a 25-basis-point cut as early as July, with the probability of a 50 bp cut at 24%.

A rate cut usually happens during periods of economic weakness or labor-market softness, neither of which are the case in North America in the first half of 2019.

So what’s driving up the price of gold?

It seems that growing fears of a trade war and Middle East tensions are urging investors back into the yellow metal in droves. One look at the key gold ETFs that track the performance of gold companies show that is likely the case.

The major gold ETF, the VanEck Vectors Gold Miners ETF (NYSE:GDX), is at its highest point this year at US$24. Its cohort, the VanEck Vectors Junior Gold Miners ETF (NYSE:GDXJ), is up 8% month-to-date, and the one-month chart indicates that there is room to grow:

(source: QuoteMedia Inc)

Whatever the case for the precious metal right now, there is real value in junior gold stocks in 2019. Here is a list of juniors whose share price charts are tracking with the GDXJ:

DRDGOLD Limited (NYSE:DRD) opened Friday up 5.9% at US$2.86 in New York. The South African-focused producer is a highly unusual miner as it 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. Shares of DRD have risen 49% over the month of June on no new news.

Telson Mining Corporation (CVE:TSN) opened Friday at C$0.37 in Toronto. The Canadian miner has two Mexican gold, silver and base metal projects, including its wholly owned Campo Morado Mine. It also has the Tahuehueto project in development, estimated to produce gold, silver and base metals beginning in 2019. Its shares have gained 21.2% in the past month.

Great Bear Resources Ltd (CVE:GBR) opened Friday at C$3.88. The precious metals company is seeing serious potential at its Dixie Lake project in Red Lake, Ontario, where it recently made a new discovery at the Bear-Rimini zone shows multiple shallow gold zones. Shares have been on a tear over the month, gaining 35.6%.

Pure Gold Mining Inc (CVE:PGM) opened Friday up 1.8% to C$0.58. The junior gold company's Madsen project has high-grade gold in Red Lake, Ontario and a feasibility study showing a low-cost path to production. Highlights of the study outline a 12-year, 800 ton per day underground operation, with probable mineral reserves of 3.5 million tons at 9 grams per ton containing 1 million ounces of gold. Its shares have tracked 9.4% higher during the month-to-date period.

Gold Resource Corporation (NYSEAMERICAN:GORO) opened Friday at US$3.20, and its shares have gained nearly 11% since May. The resource group runs two mining units in Mexico and Nevada. It operates the Arista underground mine at the El Aguila project, where initial output started in 2011, and advancing the Mirador underground mine, which it says has the potential to increase future annual silver production by around 500,000 silver ounces and 1,000 gold ounces. In Nevada, the company has high hopes for the Isabella Pearl project, where an open pit operation is being targeted to begin this month.

Fiore Gold Ltd (CVE:F) shares opened 3.8% higher on Friday morning at C$0.42. The company is a new Americas-focused gold producer and explorer with the producing Pan Mine in Nevada as well as a suite of exploration projects in Nevada, Washington State and Chile. Its shares have gained an astonishing 69.2% over the last 30 days.

Wesdome Gold Mines Ltd (TSE:WDO) was up 3.2% at Friday's open at C$5.53. The biggest company by market capitalization on this list, the Toronto-based gold miner is primarily focused on its gold operations in Ontario and Quebec. Shares of Wesdome have risen 21.8% over the month.

RNC Minerals (TSE:RNX) gained 3.2% at Friday's open at C$0.64. The Toronto-based company made international headlines last September when it revealed one of the largest gold discoveries in recent memory at its Beta Hunt mine in Western Australia, pulling out two nuggets containing 4,000 ounces of gold as part of a discovery that totaled 9,250 oz. It followed that with an additional gold discovery in May. Unsurprisingly, shares have increased 46% since May.

--Updates shares and commodity price--

Contact Angela at angela@proactiveinvestors.com

Follow her on Twitter @AHarmantas

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Thu, 20 Jun 2019 09:58:00 -0400 https://www.proactiveinvestors.com/companies/news/222520/junior-gold-stocks-are-outperforming-precious-metal-indices-as-gold-presses-towards-us1400-222520.html
<![CDATA[News - Can junior miners spin gold out of geopolitical risk? ]]> https://www.proactiveinvestors.com/companies/news/222164/can-junior-miners-spin-gold-out-of-geopolitical-risk-222164.html Gold passed the US$1,350 mark in early Friday trading, continuing a steady run that saw the yellow metal price rising over 6% since the beginning of May.

Long seen as a safe haven investment against a weak economy or political tensions, gold’s run shouldn’t come as a surprise given recent geopolitical events.

Proactive writer Alastair Ford outlined two main factors that have strengthened gold in recent weeks. The first is the US Federal Reserve’s likelihood of upping interest rates over the coming months, a move Ford describes as a “full-on U-turn.”

READ: Gold pushes past US$1,350 as Fed doves combine with Iran hawks to bring in the buyers

As Ford writes: “Cheap money is good for business, and so the equity markets like it. And it’s good for assets priced in dollars too, like commodities, since you get more dollars for your product.

“As long as the dollar remains the world’s reserve currency, the relative fluctuations a weaker dollar is always going to be good for those holding or mining gold.”

The second factor is decidedly more worrying, however, and that’s geopolitical risk. US President Donald Trump has been hardening his trade rhetoric with China over the past few months, likely giving gold a stronger platform, but this week’s jump in gold prices may have more to do with the surprise attack on Japanese oil tankers that took place this week.

The US has pointed a finger at Iran, placing early blame on its Middle Eastern foe. It’s not outside the realm of possibility that the Persian nation is behind the attacks, but it has denied responsibility.

Ford writes, “Whatever the truth of the matter, buyers are likely to come into gold as a result. … It’s a delicate balance that could easily be upset. Doves would argue that President Trump upset it when he withdrew from the nuclear deal after he came into office. But markets can’t trade past events.”

Gold miners rise

What is interesting for the gold bug is, against this backdrop, shares of gold companies and gold-backed ETFs are on the rise.

Major gold miner Kinross Gold Corporation (NYSE:KGC) (TSE:K) is trading nearly 3% higher in both New York and Toronto. The same goes for global miner AngloGold Ashanti Limited (NYSE:AU), up 2.8%. 

Although Barrick Gold Corporation (NYSE:GOLD) (TSE:ABX) is a marginal 1% higher on Friday, its share price has steadily increased over the past month.

It’s not just the majors who are getting a boost.

South African-focused junior DRDGOLD Limited (NYSE:DRD) has seen its shares increase 49% since the beginning of June on no new news, to sit at US$2.54 on Friday.

READ: Gold Resource Corp shares rise as Roth initiates coverage with a Buy rating

Another junior gaining ground is Gold Resource Corporation (NYSEAMERICAN:GORO), up 3.8% on Friday at US$3.25.

And Canadian junior Pure Gold Mining Inc (CVE:PGM) jumped 5.6% higher on Friday trading in Toronto at C$0.57.

Right now, investors are laser-focused on geopolitical events.

“For the time being the hawks are in the ascendant in the US and in Iran,” wrote Ford. “And every time there’s a flashpoint, expect a nifty little spike in gold.”

--Updates share price--

Contact Angela at angela@proactiveinvestors.com

Follow her on Twitter @AHarmantas

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Fri, 14 Jun 2019 09:56:00 -0400 https://www.proactiveinvestors.com/companies/news/222164/can-junior-miners-spin-gold-out-of-geopolitical-risk-222164.html
<![CDATA[Media files - DRDGOLD sees gold production climb in 1Q ]]> https://www.proactiveinvestors.com/companies/stocktube/13247/drdgold-sees-gold-production-climb-in-1q-13247.html Tue, 07 May 2019 16:51:00 -0400 https://www.proactiveinvestors.com/companies/stocktube/13247/drdgold-sees-gold-production-climb-in-1q-13247.html <![CDATA[News - DRDGOLD lifts gold production in 1Q boosted by Far West Gold Recoveries project ]]> https://www.proactiveinvestors.com/companies/news/219817/drdgold-lifts-gold-production-in-1q-boosted-by-far-west-gold-recoveries-project-219817.html DRDGOLD Ltd (NYSE:DRD) stock climbed Tuesday after the South African miner revealed that it lifted gold production in the most recent quarter, boosted by output from its Far West Gold Recoveries (FWGR) project.

For the quarter ended March 31 gold production increased by 15% to 1,279 kilograms, or 41,120 ounces, compared to 1,111 kilograms, or 35,732 ounces, in the preceding quarter. The ore milled expanded 11% to 6,373 metric tonnes compared to 5,755 metric tonnes in the prevbious quarter.

“Overall yield increased by 4% compared to the previous quarter due to higher grade material being processed at the Far West Gold Recoveries project, as well as improved yield at Ergo Mining Proprietary Limited,” the company said in a statement.

READ: DRDGOLD cites progress with Far West Rand Gold operation in South Africa with upgrade of its tailings storage facility

Shares in the Johannesburg-based miner rose 3.2% to $1.91 in afternoon trading.

Gold produced includes 149 kilograms from the Far West Gold Recoveries project, the Johannesburg-based miner said. 

The company sold 1,250 kilograms, or 40,189 onces of gold, in the reporting period, compared with 1,137 kilograms, or 36,556 ounces, in the prior comparable period.

In good news digsted by Wall Street, DRDGOLD revealed that external borrowings fell to R17 million at the end of March from R173.3 million on 31 December 2018.

"We attribute the reduction in debt mainly to the operating and financial performance of the existing Ergo Group operations, as well as the fact that the ramp up of the Far West Operations has been a success which helped reduce draw drowns to fund the R330 million capital expansion there and sped up the  repayment of debt," DRDGOLD CEO Niel Pretorius told Proactive Investors. 

West Rand acquisition

The company recently acquired gold and platinum miner Sibanye-Stillwater’s West Rand Tailings Retreatment Project (WRTRP) in South Africa. As a result, the new Far West Gold Recoveries crown jewel virtually doubles the South African miner’s gold reserves to 5.9 million ounces from 2.99 million ounces.

With the WRTP acquisition, DRDGOLD is building a large plant to process a million tons a month and a tailings storage facility that 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.

—(Updates with CEO comments, reductionin in debt, share activity)— 

Contact Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter: @UttaraProactive 

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Tue, 07 May 2019 15:10:00 -0400 https://www.proactiveinvestors.com/companies/news/219817/drdgold-lifts-gold-production-in-1q-boosted-by-far-west-gold-recoveries-project-219817.html
<![CDATA[News - DRDGOLD cites progress with Far West Rand Gold operation in South Africa with upgrade of its tailings storage facility ]]> https://www.proactiveinvestors.com/companies/news/217334/drdgold-cites-progress-with-far-west-rand-gold-operation-in-south-africa-with-upgrade-of-its-tailings-storage-facility-217334.html DRDGOLD Ltd (NYSE:DRD) cited progress with its Far West Rand Gold Recoveries operation, with work to upgrade the Driefontein 4 tailings storage facility completed.

The Johannesburg-based miner recently acquired gold and platinum miner Sibanye-Stillwater’s West Rand Tailings Retreatment Project (WRTRP). 

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

With the WRTP acquisition under its belt, DRDGOLD is building 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.

“DRDGOLD is on track to achieve planned throughput of 500,000 tpm from Phase 1 of its Far West Gold Recoveries operation in the first half of calendar 2019,” the company told investors.

ABOVE: Far West Rand gold operations in S. Africa

DRDGOLD said the upgraded tailings storage facility will receive tailings from the Driefontein 3 plant, which has been refurbished to re-treat material reclaimed from the Driefontein 5 dump.

“Development of Phase 1 began in August last year and first commissioning began just four months later, in December,” said the South African miner.

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. The West Rand crown jewel virtually doubles the miner’s gold reserves.

Contact Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter: @UttaraProactive 

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Wed, 27 Mar 2019 08:39:00 -0400 https://www.proactiveinvestors.com/companies/news/217334/drdgold-cites-progress-with-far-west-rand-gold-operation-in-south-africa-with-upgrade-of-its-tailings-storage-facility-217334.html
<![CDATA[Media files - DRDGOLD touts upside of Far West Gold Recoveries project ]]> https://www.proactiveinvestors.com/companies/stocktube/12235/drdgold-touts-upside-of-far-west-gold-recoveries-project-12235.html Thu, 14 Feb 2019 12:22:00 -0500 https://www.proactiveinvestors.com/companies/stocktube/12235/drdgold-touts-upside-of-far-west-gold-recoveries-project-12235.html <![CDATA[News - DRDGOLD cites progress with Far West Rand launch in South Africa ]]> https://www.proactiveinvestors.com/companies/news/214661/drdgold-cites-progress-with-far-west-rand-launch-in-south-africa-214661.html DRDGOLD Ltd. (NYSE:DRD) cited progress at the Far West Rand district in South Africa, saying its new project there got off to a good start.

Construction started in August, and the surface tailings company met its targeted start of commissioning, CEO Daniel Pretorius said on a conference call Wednesday.

“We're quite pleased with what we're seeing in terms of metallurgical recoveries, quality of ore body and volume throughput,” he said.

READ: DRDGOLD eyes contribution from Far West Gold Recoveries project in second half of 2019

He cited challenges with the Far East Rand district, saying the company felt the impact of power supply interruptions.

Pretorius added that its Ergo plant launched three projects including the 4L50 reclamation site, which Pretorius said “is doing well.”

Shares of the company declined US$0.02 to US$2.13 in Thursday’s New York trading.

Earlier this week, the company said it was looking forward to the contribution from its Far West Gold Recoveries project in the second half of 2019.

Contact Dennis Fitzgerald at dennis@proactiveinvestors.com

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Thu, 14 Feb 2019 10:15:00 -0500 https://www.proactiveinvestors.com/companies/news/214661/drdgold-cites-progress-with-far-west-rand-launch-in-south-africa-214661.html
<![CDATA[News - DRDGOLD eyes contribution from Far West Gold Recoveries project in second half of 2019 ]]> https://www.proactiveinvestors.com/companies/news/214567/drdgold-eyes-contribution-from-far-west-gold-recoveries-project-in-second-half-of-2019-214567.html DRDGOLD Ltd (NYSE:DRD) (JSE:DRD) told investors it is looking forward to the contribution of its Far West Gold Recoveries (FWGR) project in the second half, as it posted results for the six months to the end of December.

Construction on the project in South Africa started in August last year and early commissioning kicked off at the tail end of last year. The project is off to a "flying start," the company said in its earnings report Wednesday.

READ: DRDGOLD to start first phase of South African Far West Gold Recoveries project

Looking ahead, CEO Niël Pretorius said he expects phase 1 of FWGR to be fully commissioned during the first half of calendar 2019 and its contribution showing in the second half.

For 2019, the group guides for gold output of between 157,000 and 165,000 ounces at a cash operating cost of around R500 000 per kg.

Turning the page

The South Africa-based miner said 2018 had been a tough year for most South African gold miners, and although it managed to avoid labor issues, production had been blighted by power group Eskom and energy disruptions.

Whilst plant performance on the whole was consistent with expectations, around 49 kg of gold had been lost for this reason in the six months.

That led to overall gold production being down 3% at 2,280kg versus output of 2,341 kg in the same period of 2017.

The amount of gold sold clocked in at 2,255kg (2017: 2,291kg), while all-in-sustaining costs (ASIC) were at $1,208 per ounce compared with $1,050 per ounce the previous year.

The higher South African Rand gold price received helped to offset lower gold production and sales and total revenue was almost unchanged at R1 252.5 million.

Operating profit was R102.2 million, down 54%, due to lower production and higher costs.

Contact Giles at giles@proactiveinvestors.com

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Wed, 13 Feb 2019 10:03:00 -0500 https://www.proactiveinvestors.com/companies/news/214567/drdgold-eyes-contribution-from-far-west-gold-recoveries-project-in-second-half-of-2019-214567.html
<![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