DRDGold hopes to extend its surface mining operations beyond gold.

DRDGold, which is being transformed from being a leveraged deep-level specialist into a highly mechanised tailings processor, hopes to extend its surface mining operations beyond gold.

The group will in future look at other opportunities where it can deploy its superior surface mining technology to extract earnings from mining dumps in high-volume environments, CEO Niel Pretorius told journalists at a press conferenceTuesday/ this week.
The gold producer  reported a 53% increase in full-year operating profit to R622m from its Ergo asset on a 259% increase in headline earnings per share from continuing operations to 61c per share. Net cash flow from operations rose by 91% to R619.5m.The company declared a dividend of 10c per share for the year to end-June.

Reviewing the past year, Pretorius said the company had completed the first part of the sale of deep-level mine Blyvooruitzicht for R150-million in May to Village Main Reef for an interest in Village of just under 9%.

DRDGold’s main asset now comprises the Ergo processing plant and a network of pipelines designed to deliver high volumes of tailings from the Witwatersrand’s historical mining dumps.
During the year, the group had completed  the R350-million Ergo plant upgrade to a volume capacity of 1.8Mtpm while theR250-million Crown/Ergo pipeline would facilitate the full consolidation of the Ergo surface retreatment footprint before the end of the current financial year.

Ergo’s production for the year was 135 708 oz  - about 3% short of the  operation’s minimum target, but this was during a period of change when two plants were decommissioned,  two new reclaimation sites were phased in and two depleted sites – including the Top Star dump - were phased out.

Pretorius said the major priority for the new financial year, apart from completing the flotation circuit, was to maintain volume deliveries of tonnes to the plant.
“The business of reclamation – the way we have positioned ourselves with a central integrated plant that relies heavily on ultra-volume flow – is very dependent on volumes. For us going forward, to achieve volumes every month without interruption is going to be a very important focus area. We now have a dedicated team which has one job, and that is delivering volumes to the plant.”

The success of the flotation circuit would also influence a decision on the commissioning of a R150m uranium circuit, of which production was envisaged to carry between 8% and 10% of DRDGold’s gold production cash costs.
However, Pretorius said the company,  having spent more than R1bn in capex over the last few years, was not to embark immediately on an expansion drive, adding that the flotation circuit and likely uranium circuit would be the company’s last major capital expenditures for the time being.

The group will make a decision in February on whether to carry on working its Zimbabwe prospects, but this would depend on whether they were shallow-level producing assets or not.
Ergo was established in 2007 as a joint venture between DRDGOLD and Mintails Limited to recover and treat surface tailings in the Elsburg Tailings Complex. Now wholly owned by DRDGOLD, Ergo has a network of surface rights that provide access to surface tailings deposited across the western, central and eastern Witwatersrand.
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