DRDGOLD Enters Next Growth Cycle With CFO Succession and R8 Billion Capital Plan

• Riaan Davel is transitioning from CFO to a consulting role, with Henriette Hooijer taking over as CFO effective February 1, 2026, after working together for 20 years (9 at DRDGOLD)
• DRDGOLD operates a unique surface tailings retreatment model focused on "mega volumes, nano recovery" (200 parts per billion), producing gold while remediating environmental legacy from 130+ years of mining
• Market cap has grown to approximately US$2 billion, enabling significant capital investment of ~10 billion rand over recent years, with 8 billion rand planned for the next three years
• Company is exploring opportunities in Africa and potentially South America, considering partnerships with established players and possibly diversifying into other metals like copper while maintaining gold as primary focus
• Despite favourable gold prices (2.2 million rand/kg vs. 600,000 rand/kg when Far West was planned), management maintains cost discipline rooted in experience from tougher market conditions

DRDGOLD Limited, a 130-year-old continuously listed South African gold mining company, is undergoing a significant leadership transition that reflects both its operational maturity and ambitious growth plans. In a recent discussion, outgoing CFO Riaan Davel and incoming CFO Henriette Hooijer outlined the company's unique position in the gold mining sector, where environmental restoration is not an add-on but the core business model. With gold prices at near record levels and a proven track record of capital efficiency, DRDGOLD stands at an inflection point as it contemplates expansion beyond its South African base while maintaining the disciplined approach that has defined its success.

A Unique Business Model Centered on Environmental Restoration

DRDGOLD operates a distinctive business model focused on large-scale surface tailings retreatment in South Africa's Witwatersrand basin. As Davel explains, the company's purpose is "rolling back the environmental legacy of mining, improving quality of life," with a model based on "mega volumes, nano recovery." The company processes enormous quantities of historical mine tailings, recovering approximately 200 parts per billion of gold while simultaneously remediating environmental damage from over a century of mining activity.

This approach differs fundamentally from traditional mining operations. Rather than extracting high-grade ore from underground deposits, DRDGOLD processes what other companies have left behind. "We own waste essentially," Davel notes. "So how do we make the most of that?" The company operates within a 150-kilometer radius that contains 140 years of concentrated gold mining history, providing a unique opportunity to demonstrate that mining rehabilitation can be economically viable when planned from day one.

The environmental focus is not merely cosmetic. Davel emphasizes that "for us, that's how we plan" rather than treating ESG as an afterthought. The company's integrated thinking extends to operational details, such as implementing double pipeline systems, one for slurry, one for water return to minimize portable water usage in water-scarce regions. While these investments require upfront capital, they reduce ongoing costs and environmental impact simultaneously.

Smooth Leadership Succession Built on Shared History

The transition from Davel to Hooijer represents a carefully planned succession that leverages decades of shared experience. The two have worked together for approximately 20 years, including nine years specifically at DRDGOLD. Hooijer's first exposure to the company came even earlier, her first audit assignment in 2005 involved one of DRDGOLD's subsidiaries. "Mining is in my blood," Hooijer explains, noting that her father worked for manganese mines for 21 years in South Africa's Northern Cape.

Hooijer's progression within DRDGOLD has provided comprehensive exposure to the business. She started in group reporting as compliance officer, then moved to operational roles when the company launched Far West Gold Recoveries around 2018. Her involvement in "mega projects" from initial regulatory approval through construction phases positions her well to oversee the company's Vision 2028 strategy.

The formal transition occurs February 1, 2026, with Davel remaining under a 12-month consulting contract to support the CFO office and ensure continuity. This extended handover period, announced to the market in June, allows Hooijer to step into a role where "big shoes" await, as she acknowledges, while maintaining access to Davel's institutional knowledge.

Operational Evolution and Growth Trajectory

DRDGOLD's transformation over the past decade illustrates how disciplined execution of a differentiated strategy can create substantial shareholder value. The company's market capitalization has grown to approximately US$2 billion, a scale that was "not even in our minds" a decade ago, according to Davel. This growth has fundamentally changed what the company can accomplish.

Ten years ago, a 10 million rand project was significant; today, such amounts represent "relatively small additions." The company recently commited to spend almost 10 billion rand on capital projects, including 2 billion rand in the prior year, with plans for roughly 8 billion rand over the next three years. This capital is building infrastructure designed to last 20-40 years or longer, particularly at the Far West operation.

The Far West project exemplifies the company's approach. Planned when gold prices were 600,000 rand per kilogram, current prices around 2.2 million rand per kilogram have dramatically improved margins. Davel emphasizes that favourable market conditions shouldn't diminish cost discipline: 

"Don't forget where you came from... if you don't get that right, at some point, if the cycle turns, then you're in trouble."

Interview with Riaan Davel, Outgoing CFO, and Henriette Hooijer, CFO Designate of DRDGOLD

Operational Challenges and Strategic Focus

DRDGOLD operates two main platforms with distinct characteristics. Far West represents the newer, higher-grade operation, while Ergo, described as "our big old lady," operates as a more marginal business with lower yields and different cost dynamics. Ergo has faced recent challenges, including struggles with material availability in 2024 due to licensing delays that impacted tonnage volumes.

For a business model dependent on mega volumes, tonnage fluctuations significantly affect the cost profile. Hooijer explains that Ergo's focus is "changing that cost profile" by transitioning away from more expensive environmental cleanup sites toward slime sites, which will ultimately represent all remaining material. This shift will create "an entirely new cost structure" for Ergo going forward.

The operational complexity is substantial. Running a 24-hour operation that delivers required tons to two different plants continuously demands sophisticated logistics. With recovery rates of only 200 parts per billion, system stability is critical. 

"Our margin is small. Yes, with the gold price higher, it increases, but still it's a very small margin of error."

Expansion Strategy for Diversification

While DRDGOLD has built its reputation within South Africa, the company is now actively exploring expansion opportunities. Hooijer noted, 

“[Management is] looking at expanding into Africa, maybe South America, and maybe looking towards other minerals as well."

The company views its surface retreatment model as replicable for other metals, potentially including copper, though gold remains the preferred target given the company's expertise.

The approach to geographic expansion differs by jurisdiction. In South Africa, where the company has deep knowledge and established operations, DRDGOLD would prefer full ownership of assets. However, for neighbouring countries or other jurisdictions, Hooijer explains that 

"it is always easier to partner with big players [particularly] in jurisdictions that you don't know."

Partnership models would allow DRDGOLD to leverage established operators' local knowledge while contributing its specialized retreatment expertise.

This strategic flexibility extends to deal structures. In new jurisdictions, DRDGOLD could potentially help major mining companies address tailings liabilities and remove environmental obligations from balance sheets. The company's track record of economically viable environmental restoration positions it as a potential solution provider for industry-wide challenges.

Capital Discipline Amid Abundant Opportunities

Despite significantly increased financial resources and near record gold prices, DRDGOLD's leadership emphasises maintaining the cost discipline developed during more challenging periods. Davel reflects on the company's history of "weekly, monthly working capital meetings to make sure our creditors get paid" during tight margin environments, noting that this experience built organizational resilience.

The company's capital allocation philosophy revolves around what Davel describes as keeping "all your stakeholders equally unhappy." Rather than maximizing short-term profits by mining only the highest-grade material available, DRDGOLD blends material to optimize long-term resource extraction. "Yes, the shareholder may lose a bit of profit," Davel acknowledges, but the approach has enabled 18 consecutive years of dividend payments while financing capital projects internally and building operations designed for 20+ year lifespans.

Looking ahead, Hooijer's priorities center on project execution, cost management, and incremental growth within existing operations. Rather than seeking "one big silver bullet," she emphasizes that success comes from "lots of little things" and maintaining the entrepreneurial culture that has characterized DRDGOLD despite its growth.

ESG Integration as Competitive Advantage

DRDGOLD's approach to environmental, social, and governance factors predates the recent ESG investment trend, providing authenticity that some companies struggle to achieve. The company's business model inherently addresses environmental remediation, but management views this as fundamental rather than supplementary.

Davel expresses interest in the evolving sustainability reporting landscape, comparing it to "where accounting standards were in the late 90s" when every country had its own standards. He anticipates significant growth in sustainability assurance as frameworks like S1 and S2 gain adoption, an area he may pursue during his consulting period.

However, the company recognizes that its integrated approach, while successful, emerged partly from necessity. With resources that are essentially waste material, DRDGOLD had to develop a model that generates adequate returns while ensuring long-term operational viability. This forced discipline created what Hooijer describes as a company culture that remains "a family business" in feel, where "we back each other, we keep each other responsible."

The Investment Thesis for DRDGOLD

• Unique, Replicable Business Model: Surface tailings retreatment generates gold production while remediating environmental legacy, creating dual value proposition that differentiates from traditional miners and provides potential licensing/partnership opportunities globally
• Proven Capital Efficiency: Despite operating with "nano recovery" (200 parts per billion), company has generated 18 consecutive years of dividends, internally financed major capital projects, and grown market cap to ~$2 billion through disciplined execution
• Significant Operational Leverage to Gold Prices: Current gold prices (~2.2 million rand/kg) provide substantial margin expansion versus planning assumptions (600,000 rand/kg), while management maintains cost discipline from experience in tougher market conditions
• Long-Duration Infrastructure Investments: ~8 billion rand capital program over next three years building 20-40+ year operational infrastructure at Far West (800 million ton capacity) and repositioning Ergo for improved cost structure
• Multiple Growth Vectors: Immediate focus on Vision 2028 execution within South Africa, with medium-term expansion opportunities in Africa and South America through partnerships or acquisitions, potentially expanding to other metals (copper) while maintaining gold focus
• Authentic ESG Integration: Environmental restoration embedded in business model from day one rather than compliance exercise, providing competitive advantage as sustainability standards evolve and major miners seek tailings solutions
• Experienced, Stable Leadership: Seamless CFO transition with 20-year working relationship and nine years at DRDGOLD together ensures strategic continuity while bringing operational project experience to financial leadership
• Underappreciated Scarcity Value: Company operates in unique 150km radius containing 140 years of concentrated gold mining history, with proven ability to economically process historical waste that others cannot

Macro Thematic Analysis

The global mining industry faces mounting pressure to address historical environmental liabilities as regulatory frameworks tighten and ESG scrutiny intensifies. Simultaneously, gold has entered a sustained bull market driven by geopolitical uncertainty, monetary policy dynamics, and central bank accumulation. DRDGOLD operates at the intersection of these powerful secular trends, offering a solution that transforms century-old mining waste into economic gold production while permanently remediating environmental damage. As Davel articulates the opportunity: 

"Mining does not have to be the bad guys in the world. We know the world needs mining... but if you think about rehabilitation or closure from day one, you can plan it, and we've shown that model." 

With major mining companies holding significant tailings liabilities and limited expertise in economic retreatment, DRDGOLD's proven model becomes increasingly valuable as both regulatory requirements and stakeholder expectations rise globally.

TL;DR

DRDGOLD's seamless CFO transition from Riaan Davel to Henriette Hooijer (effective February 1, 2026) positions the company for continued execution of its unique surface tailings retreatment model, which generates gold production while remediating environmental legacy. With market cap grown to ~US$2 billion, 8 billion rand capital program planned over three years, and gold prices providing substantial operational leverage, the company is exploring expansion into Africa and South America while maintaining the cost discipline that enabled 18 consecutive dividend years. Management's authentic ESG integration and proven capital efficiency create differentiated value proposition as global mining industry faces mounting pressure to address historical environmental liabilities.

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