DRDGOLD Limited

DRDGOLD Limited is a South African gold producer specializing in the retreatment and recovery of tailings, focusing on sustainability and environmental stewardship. With a rich history in gold mining, DRDGOLD operates two flagship projects: Ergo and Far West Gold Recoveries (FWGR). These projects focus on extracting residual gold from previously mined sites, a practice that aligns with the company’s commitment to environmental rehabilitation and maximizing resource utilization.

Ergo, DRDGOLD's oldest and largest operation, reprocesses surface tailings on the central and eastern Witwatersrand. Meanwhile, the FWGR project, located in the West Rand, is advancing Phase II of its expansion, set to increase gold output significantly. As of FY2024, DRDGOLD achieved a revenue of R6.24 billion, underscoring its position as a major player in gold recovery and tailings retreatment. The company is listed on the Johannesburg Stock Exchange (JSE: DRD) and the New York Stock Exchange (NYSE: DRD), making it accessible to a global investor base keen on sustainable and innovative gold production.

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DRDGOLD represents a unique investment opportunity in the gold mining industry, distinguished by its focus on tailings retreatment rather than traditional mining. This approach lowers capital costs and mitigates environmental impact, enabling DRDGOLD to operate with reduced risks associated with new mining operations. With an established infrastructure base, DRDGOLD maintains one of the lowest-cost structures for gold recovery in South Africa, despite the operational challenges posed by rising costs and currency fluctuations.

As part of its Vision 2028 strategy, DRDGOLD is expanding its capacity at both Ergo and FWGR, with a particular emphasis on renewable energy integration to reduce costs and enhance operational sustainability. The company’s new solar project, scheduled for completion in FY2025, will offset nearly half of Ergo's energy consumption, reducing operating costs and carbon emissions. Positioned to benefit from increasing global interest in environmentally responsible mining, DRDGOLD is poised to deliver long-term value to its shareholders, leveraging strong gold prices, sustainable growth strategies, and a robust focus on environmental, social, and governance (ESG) principles.

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DRDGOLD Limited is led by an experienced management team dedicated to advancing sustainable mining and maximizing shareholder value. At the helm is Chief Executive Officer Niël Pretorius, who has two decades of experience in the mining industry. He was appointed CEO on 1 January 2009.With over two decades of experience in the mining industry, Pretorius is committed to driving innovation and environmental stewardship within the company.

Chief Financial Officer Riaan Davel joined DRDGOLD in January 2015, before which he gained 17 years’ experience in the professional services industry, the majority obtained in the mining industry in Africa. As part of his experience, Riaan provided assurance and advisory services, including support and training on the International Financial Reporting Standards (IFRS) to clients and teams across the African continent.

The team is further strengthened by a board of directors with diverse expertise in mining, finance, environmental management, and governance. Together, this team guides DRDGOLD’s strategic direction, focusing on operational excellence, innovation, and sustainable practices to meet the company’s long-term objectives while fostering positive relationships with communities and stakeholders.

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DRDGOLD’s growth strategy centers on sustainable gold production through the retreatment of historical mine tailings, with a focus on expansion, innovation, and environmental stewardship. With its Vision 2028 roadmap, the company is undertaking significant upgrades to its Ergo and FWGR operations. The expansion of the FWGR project’s Phase II will boost gold production capacity, supporting DRDGOLD’s commitment to increasing output while maintaining cost efficiency.

A key pillar of DRDGOLD’s growth strategy is its commitment to renewable energy and carbon footprint reduction. The completion of a 40MW solar facility and a 160MWh battery energy storage system at Ergo will power nearly half of the facility’s operations by FY2025, reducing energy costs and enhancing sustainability. This move aligns with DRDGOLD’s ESG framework, aimed at reducing environmental impact and supporting South Africa’s renewable energy goals.

In addition to its operational enhancements, DRDGOLD continues to invest in research and development to improve gold recovery rates and expand tailings retreatment opportunities. The company is also open to strategic partnerships to explore additional tailings resources and potentially enter new markets. Through this multifaceted approach, DRDGOLD is positioning itself as a forward-thinking leader in sustainable mining, poised to create lasting value for shareholders and contribute positively to the environment and surrounding communities.

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As of FY2024, DRDGOLD Limited is financially strong, underpinned by steady revenue growth and a disciplined approach to capital management. The company generated R6.24 billion in revenue, a 14% year-over-year increase, with operating profit reaching R2.08 billion. Despite industry-wide cost pressures, DRDGOLD has maintained profitability by prioritizing operational efficiency and leveraging existing infrastructure at its Ergo and FWGR sites.

Capital expenditure rose significantly to R2.98 billion, reflecting the company’s commitment to expanding its capacity and supporting sustainable initiatives, such as the solar power project at Ergo. This investment in renewable energy and capacity upgrades aligns with DRDGOLD’s strategy of reducing operating costs over time, especially as energy prices rise. The company's strong balance sheet, with R521.5 million in cash and a current ratio of 1.6, provides the financial flexibility needed to pursue growth initiatives while continuing its dividend policy, marking the 17th consecutive year of shareholder dividends.

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DRDGOLD Limited stands at the forefront of sustainable gold production in South Africa, driven by a unique business model that focuses on the retreatment of historical tailings. With established operations at Ergo and FWGR, the company consistently demonstrates its ability to generate strong cash flows and maintain profitability, even amid market fluctuations. DRDGOLD’s Vision 2028 roadmap underscores its commitment to growth and innovation, supported by substantial investments in renewable energy and operational expansion.

As global demand for responsible mining practices increases, DRDGOLD is well-positioned to lead by example, aligning its operations with stringent environmental, social, and governance (ESG) standards. Through its experienced leadership team, robust financial position, and forward-thinking approach to risk management, DRDGOLD offers an attractive opportunity for investors seeking exposure to gold with a focus on sustainability. With its long-standing dividend policy and proactive engagement with communities and stakeholders, DRDGOLD is set to deliver enduring value while contributing positively to South Africa’s mining landscape.

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