In the media
DRDGOLD looks forward to being ‘gold factory’
14 February 2012
JOHANNESBURG (miningweekly.com) – The owner of the world’s biggest “gold factory”, the JSE-listed DRDGOLD – which has made its final move from risky deep-level mining to the thriving business of recycling dumps on surface – is introducing new technology that will wring more gold and uranium from its mountain of waste tailings.
The integration of the Johannesburg-based Crown and East Rand-based Ergo retreatment operations has given DRDGOLD sufficient material to become a recycling business that has an immediate ten-year life-of-mine plan.
It also has the pipeline network and fine-tuned infrastructure to process the large volumes of gold-bearing dump material that still lie in and around Johannesburg, which could extend its operational horizon for decades more.
At the end of it all, an environmental clean-up will have taken place and many hectares of urban property will become available for potential release onto the market.
“We’re turning what is an environmental nuisance into a valuable resource that can offer consistent and steady returns for shareholders,” Pretorius adds.
With JSE-listed Village Main Reef having concluded a binding agreement to buy DRDGOLD’s deep-level Blyvooruitzicht (Blyvoor) gold mine for R1 and shares worth R192-million, there is no longer a need for DRDGOLD’s cash-generating surface business to subsidise risky deep-level underground mining.
Instead it can go about recovering 5.5-million ounces of gold worth R10-billion from an eleven-million-ounce resource and await the installation of the new fine-grind circuit recovering up to 20% more gold in 18 months time.
Risk is down, in the form of what is a veritable “gold factory”, says DRDGOLD CEO Niël Pretorius, and there is zero debt, CFO Craig Barnes reports.
Net inflow of cash from the last quarter alone is sufficient to cover the R250-million capital needed for the new proven technology that will capture gold from pyrite particles that have been slipping through the cracks.
With Ergo’s current metallurgical circuit encapsulated in higher-fraction pyrites, gold has been coming in at one end and leaving at the other.
Now, those pyrites will be pulled off into a concentrator and sent to the fine-grind circuit, similar to those used in platinum mines, for milling into ultra-fine fractions that can be dissolved into the normal cyanide solution.
Up to 20% more gold can be recovered in this way.
“That’s growth that does not require additional volume,” Pretorius comments to Mining Weekly Online (see also accompanying video).
In addition, the flotation process increases the uranium content in the concentrate to more than 200 parts per million and because of the fine grind, resin-and-pulp technology can be used for uranium extraction at considerably lower capital expenditure.
“There may be a nice uranium surprise for us in the not too distant future,” says Pretorius.
Desktop studies suggest a recovery of 11 t of uranium a month, which could soften gold’s unit costs by between 5% and 8% at the current $50/lb uranium price.
Even with Blyvoor in the fold in the three months to December 31, DRDGOLD’s cash operating unit costs fell 2%, net profit rose 99% to R165.1-million and net cash inflow from operations rose 107% to R243.9-million.