In the media
DRDGOLD looks beyond gold
29 August 2012
DRDGOLD wants to extend its surface mining footprint beyond gold, saying very few players can match its technology to extract earnings from mining dumps in high-volume environments.
Publishing financials for the year to end-June on Tuesday, the company for the last time reported numbers for a deep-level asset, marking the group’s transformation from being a leveraged deep-level specialist to becoming a highly mechanised tailings processor.
The sale of deep-level Blyvooruitzicht for R150m to Village Main Reef in a shares- based transaction was completed end-May.
Apart from a few prospects, 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 period under review, Ergo delivered 135,708 oz of gold at a cost of $1,096 per kg. Blyvoor’s separate contribution was 96,645oz at a cost of $1,404/oz.
The company is now working towards the completion of a R250m flotation/fine grind circuit to extract more gold from surface materials. The circuit is earmarked to be commissioned in the March-quarter of 2013.
CEO Niël Pretorius told analysts and journalists on Tuesday 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,” Pretorius said. “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.”
Pretorius said the success of the flotation circuit would also trigger a decision on the commissioning of a R150m uranium circuit, of which the production is envisaged to carry between 8% and 10% of DRDGOLD’s gold production cash costs.
Pretorius said the group would in future look at other opportunities where it can deploy its surface mining technology. “I don’t think gold is the only product out there that can be recovered,” he said. “We will be looking to extend our reach with our technology.
“We’re not really a miner anymore; we’re just refuse people finding stuff that’s been thrown away.”
However, Pretorius said the company is not to embark immediately on an expansion drive, saying the flotation circuit and likely uranium circuit would be the company’s last major capital expenditures for the time being.
“We’ve spent more than R1bn in capex over the last few years,” Pretorius said. “There comes a time when any company has to put away the cheque-book and open up the deposit book a little bit.
“We’re not going to be chasing meaninglessly after some bigger footprint. It’s time to make a bit of money on what we currently have.”
Pretorius said the group has no plan to venture into any deep-level play. The group will make a decision in February on whether to carry on working its Zimbabwe prospects; Pretorius said that unless those show the promise of being shallow-level producing assets, the group would call a halt on those.