In the media

DRD Gold confident of Blyvoor sale

30 April 2012

Pushing ahead with project to boost gold recoveries from tailings, has started a feasibility study into a R150m project to also extract uranium

DRDGOLD is confident the sale of its Blyvoor mine to Village Main Reef is on track, and it is pushing ahead with a project to boost gold recoveries at its surface operations.

DRDGOLD, which has switched its focus to re-treating mine dumps, has started a full feasibility study into a R150m project to extract uranium from the tailings it processes, CEO Niël Pretorius said last week.

Work has started on a R250m project that entails the building of a flotation circuit at Brakpan as well as a fine-grind circuit which are designed to bump up gold production at its Ergo operations by between 16% and 20%.

DRDGOLD ended the March quarter with nearly R380m in cash and cash equivalents on its books, and the company’s management "believe we could also implement this project without any dilution to shareholders".

DRDGOLD has built and commissioned a 50km pipeline linking tailings and processing facilities near Roodepoort to its Ergo plant and new deposition facilities near Springs.

The share holdings of investors were not diluted by this project, which included upgrading Ergo to treat 1,8-million tons of material a month.

The Ergo operations reported a 3% increase in gold production in the March quarter from the previous quarter, and Mr Pretorius said this was a result of the completed pipeline and improvements to the treatment circuit.

Ergo produced 34947oz of gold in the March quarter, with a 7% increase in material processed, coming in at 5,6-million tons. The yield, however, was 5% lower at 0,19 grams a ton after the depletion of a high-grade dump.

The cash operating costs rose 1% to R267044/kg, and Ergo reported an operating profit of R162m.

DRDGOLD and Village are awaiting the finalisation of two conditions to conclude the sale of Blyvoor.

A submission on the transaction was submitted to the Competition Commission on March 29 this year.

"We can confirm that the filing does not contain anything controversial or out of the ordinary," Mr Pretorius said.

The second condition is the transfer of a block of land neighbouring Blyvoor from AngloGold Ashanti. It was likely the company will have completed this condition by the due date of May 30.