Self-Funded Gold Recovery From Tailings Targets 200K Annual Ounces

• DRDGOLD reprocesses historical mine tailings in South Africa to produce gold, offering a waste-neutral, low-risk mining model with environmental remediation as a core outcome.
• The company is investing in large-scale infrastructure upgrades, including a 60 MW solar plant and new tailings storage facilities, to extend the life of its Ergo and Far West Gold Recoveries (FWGR) operations through 2040.
• DRDGOLD remains self-funded, reporting record performance in recent quarters due to strong gold prices, allowing reinvestment without tapping credit facilities and maintaining an 18-year dividend streak.
• By FY2028, DRDGOLD targets a combined throughput of 3 million tonnes/month and production of 200,000 ounces/year, with full exposure to gold prices due to a no-hedging policy.
• The company prioritizes environmental rehabilitation and talent development, especially among young professionals and women, supporting its long-term strategic continuity.

DRDGOLD Limited (NYSE:DRD), a South African gold producer, has carved out a unique niche by recovering gold from old mine tailings rather than engaging in traditional underground mining. This waste-reprocessing model is not only environmentally rehabilitative but also financially compelling under current gold price dynamics. In a recent conversation, CEO Niël Pretorius detailed how the company is positioning itself for long-term sustainable output and value creation amid high gold prices and growing interest in ESG-focused mining strategies.

Market Conditions & Strategic Timing

In the backdrop of a volatile but favorable gold market, Pretorius noted:

“The gold price has been behaving really well for us... it's still a very good gold price environment.” 

Despite recent short-term volatility linked to geopolitical developments, he emphasized the long-term shift in gold price dynamics. Outlining the rationale behind DRDGOLD’s current capital investment cycle, Pretorius noted:

“You’ve got to take advantage of these prices when they happen.” 

Infrastructure Investment & Life-of-Mine Extension

At the core of DRDGOLD’s strategy is reinvestment into existing assets to extend their productive life beyond original projections. The Ergo operation, originally slated to close several years ago, is being rejuvenated through a significant capital program. This includes:

• A completed 60 MW solar power facility
• A 180 MW battery energy storage system
• A new tailings storage facility to replace the aging infrastructure

“Power was a big issue. We decided to invest in a solar power plant... coupled to a 180 MW battery energy storage system.” 

These upgrades aim to sustain Ergo’s operations well into the 2040s. Similarly, the Far West Gold Recoveries (FWGR) unit, acquired from Sibanye-Stillwater, is undergoing a doubling in processing capacity - from 500,000 tonnes/month to 1.2 million tonnes/month - and construction of a regional tailings storage facility (RTSF) capable of supporting decades of operations.

Re-investment Without Debt

A standout feature of DRDGOLD’s current growth strategy is that it remains self-funded. Thanks to record revenues—driven by high gold prices—DRDGOLD has not needed to dip into external financing to support its capex program.

“We thought we were going to have to dip into the facilities… and we didn’t. We declared a dividend and still had some cash left.” 

Even with weather-related disruptions in early 2025, strong gold prices have allowed DRDGOLD to reinvest in growth without sacrificing shareholder returns. Pretorius reaffirmed the company’s long-term dividend commitment: 

“We’ve been a dividend-paying company for 18 years. It’s become more of a value than a policy.”

Interview with Chief Executive Officer, Niël Pretorius

ESG Integration & Waste-Neutral Mining

One of DRDGOLD’s key differentiators is its waste-neutral, environmentally restorative business model. Rather than generating new waste, the company processes legacy tailings and deposits them into modern, managed facilities.

“The business is waste-neutral. We take old waste, reprocess it, and put it onto a tailings storage facility that is managed to a different set of environmental standards.”

In contrast to deep-level mining, which often carries heavy rehabilitation liabilities at closure, DRDGOLD’s model allows for ongoing remediation. Each tailings facility is mined in full and rehabilitated concurrently, reducing final closure costs and improving environmental outcomes.

Operational Optimization & Resource Control

Pretorius emphasized DRDGOLD’s strategic advantage: full ownership and control of its resource base, all of which is above ground and pre-mined. This enables precise planning and optimized blending of tailings to maximize long-term output.

“We’ve got 6 million ounces of gold, but it’s in waste. You either mine it, optimize it, or get away from it.”

This optimization includes blending higher and lower-grade tailings for more consistent long-term performance rather than focusing on short-term high yields. The strategy aims to position DRDGOLD as a reliable mid-tier producer offering stable, if not outsized, returns.

Efficiency & Engineering-Led Growth

While the grades of tailings are known and relatively fixed, improvements in processing efficiency and plant throughput are key to DRDGOLD’s expansion. The company’s engineering efforts focus on enhancing flow-sheet performance and maintaining output consistency despite variable weather or site access. Pretorius noted: 

“Optimizing your ore body means you mine a blend that gives you the best possible chance of mining as much of that resource as you can.”

The company is targeting total throughput capacity of 3 million tonnes/month by FY2028, with output expected to reach approximately 200,000 ounces annually. DRDGOLD's model functions almost like a gold-processing factory—steady, predictable, and scalable.

People & Purpose: Long-Term Organizational Continuity

Pretorius reflected on the company’s culture and staff development as critical to its long-term sustainability. Nearly half the workforce is now women, and a new generation of younger professionals is rising through the ranks.

“There are so many smart, dynamic young people coming through... they take ownership of the business.”

The management team has also remained notably stable, allowing continuity of vision and values. This sense of purpose and alignment, from boardroom to operations, underpins DRDGOLD’s strategy: 

“We want to optimize this ore body... and the place must be in a certain condition once we’re done.”

The Investment Thesis for DRDGOLD

• Proven Resilience: An 18-year dividend-paying history highlights operational and financial resilience through multiple gold cycles.
• Self-Funding Growth: The company funds its capital expansion internally, limiting dilution and debt risk.
• Waste-Neutral Model: DRDGOLD’s reprocessing of tailings aligns with ESG mandates, offering environmental remediation and long-term sustainability.
• Attractive Gold Price Exposure: With no hedging, DRDGOLD provides full leverage to the gold price, benefiting directly from price increases.
• Visible Growth Path: The expansion of Ergo and FWGR to 3Mt/month by FY2028 supports a targeted output of 200,000 oz/year.
• Low Geological Risk: All resources are above-ground tailings with known grades, removing major exploration and geotechnical risk.
• Stable Governance and Culture: Long-serving management and a strong internal culture of responsibility support predictable execution.

Macro Thematic Analysis

The gold price has experienced strong tailwinds over the past 18 months due to a mix of geopolitical tensions, inflationary concerns, and increasing distrust in fiat currencies. Pretorius remarked: 

“There’s genuinely a lot more fiat currency units in the world relative to the amount of gold that’s out there… compared to what the situation was 10 years ago.”

This context supports continued interest in physical and mined gold, especially from institutions seeking diversification. While the gold market remains cyclical and sentiment-sensitive, companies like DRDGOLD - leveraged to price without hedging - offer exposure to this thematic.

DRDGOLD's model reduces many of the operational risks typical of mining and allows for capital-light expansion. In an environment where environmental concerns, financial discipline, and exposure to real assets are valued, DRDGOLD’s proposition sits well within macroeconomic narratives favoring gold.