First conceived in the early part of 2002 as the company emerged from protracted survival mode, DRD’s Project Boost started growing muscle at a senior management workshop in May of that year, recalls deputy CEO Ian Murray.

    By August a framework for capital raising had begun to take shape; and by the end of November, thanks to a highly successful convertible bond issue, there was US$66 million in the bank to fund various growth initiatives that had been identified.

    The contract for the biggest of these – a R100 million plant upgrade at the company’s North West Operations in South Africa was awarded in June 2003 and the work is scheduled for completion by year-end.

    “When we were at last able to come out of crisis mode and look to the future, we saw there were huge opportunities for organic growth in and around our existing operations and for the first time in a long while we could seriously consider growth through acquisitions, specifically in Australasia,” says Murray.

    Objectives and targets began to emerge.

    “We envisaged a multi-faceted approach – lowering unit costs, increasing reserves, decreasing risk and ensuring consistent production going forward. We set ourselves a target of not less than an 18% return on any invested capital and a 10% increase in production over a four-year time frame.”

    While South African production is expected to remain at around 750 000 ounces a year, the plan is to take annual production from existing and new Australasian operations, predominantly in the Rim of Fire region, to 400 000 ounces. The strengthening in the Rand in recent months simply underscores the need for Project Boost, Murray adds.

   “We’re under greater pressure now to find and produce more, cheaper ounces and while we will have to postpone some of the more marginal components of Project Boost until the Rand gold price improves, the bigger elements such as the North West Operations plant upgrade and the Blyvooruitzicht slimes dam project must proceed.”

    Argonaut, DRD’s ambitious deep-level gold mining project immediately south of Johannesburg is on a “go-slow” for the time being. Existing mineral resource data is being re-evaluated to get a better grasp of the location and volume of contained gold but Murray remains upbeat.

    “We have applied for an exploration licence and with 57% of the mineral rights already in our hands, there is plenty of potential to bring in the balance through partnerships that meet the spirit and intent of the Mining Charter.”

    And Argonaut will not drain the Project Boost coffers. Only R2.5 million of the Project Boost budget is earmarked for this; DRD has said from the outset that a new listing is the likeliest means of funding the 13-year development of this multi-billion Rand project.