Sustainable Precious Metals Production: A New Era of Value Creation

• Both CEOs discuss their companies' focus on tailings reprocessing, with DRDGOLD operating in Johannesburg and GoGold Resources in Mexico, demonstrating successful business models in environmental cleanup and precious metals recovery
• The companies emphasize sustainable development and ESG principles, not just as compliance requirements but as core business strategies that enhance profitability
• Both firms highlight the importance of community engagement and social license to operate, with GoGold noting community support for permits and DRDGOLD discussing urban rehabilitation
• The CEOs address the current favorable precious metals price environment ($2,700 gold, $30-32 silver) while maintaining disciplined approaches to growth
• Discussion of changing industry attitudes toward environmental and social responsibility, with both executives noting the shift from pure profit focus to stakeholder-inclusive approaches

Introduction

The precious metals sector is witnessing a fundamental transformation, with companies increasingly adopting sustainable practices while maintaining profitable operations. At a time when gold prices are testing $2,700 per ounce and silver trades around $30-32, two companies stand out for their innovative approaches to sustainable mining: DRDGOLD, a South African gold producer focused on tailings reprocessing, and GoGold Resources, a Mexican precious metals producer combining tailings operations with traditional mining development. Their success demonstrates how environmental stewardship and profitability can work in tandem, offering investors exposure to both precious metals and sustainable mining practices.

Panel Discussion with GoGold Resources President & CEO, Brad Langille, and DRDGOLD's CEO, Niël Pretorius

The Evolution of Sustainable Mining

The mining industry has undergone significant changes in its approach to sustainability and community relations. Neil Pretorius, CEO of DRDGOLD, reflects on this transformation:

"I've been involved in this industry 25 years and I remember in the early days - there was the sort of attitude of we're doing the world a favor because we're producing all the metals for economic growth."

This outdated perspective has given way to a more nuanced understanding of mining's role in society.

The change isn't merely superficial. As Pretorius notes, "I think the thing that strikes me about modern day Executives is that there's a humility which you didn't really see a few decades ago." This transformation reflects broader changes in how mining companies operate and create value, with a focus on sustainable development and stakeholder engagement.

Environmental Innovation Driving Profits

DRDGOLD's operations in Johannesburg demonstrate how environmental rehabilitation can generate substantial returns. The company processes tailings at a massive scale, producing between 155,000 and 170,000 ounces of gold annually. "This year we targeting just over 5 tons of gold," states Pretorius, highlighting the significant scale of their operations.

The company's commitment to sustainability extends beyond mere rhetoric. Pretorius emphasizes their circular economy approach:

"We do not produce any new waste, we use mostly recycled water for treatment... this year we completed a 60 megawatt solar plant so about half of our electricity is from the Sun, which will be shrinking our carbon footprint by about 50%."

GoGold Resources has similarly found success in tailings reprocessing at their Parral project in Mexico. CEO Brad Langille explains their innovative approach:

"We've made an agglomerated heap leach work on old tailings, with a very low operating cost."

The project generates consistent cash flow while cleaning up historical mining waste, with tailings deposited over approximately 300 years.

Community Relations & Social License

Both companies emphasize the importance of community engagement as fundamental to their business model. GoGold's approach in Mexico has resulted in strong local support, with Langille noting:

"We have the community petitioning to get us a permit quicker."

This demonstrates how effective stakeholder engagement can accelerate project development and reduce operational risks.

The company's Parral project provides significant economic benefits to the local community. "We pay them about US$75,000 a month and that actually represents probably 5 to 10% of the municipal budget," Langille explains, highlighting the material impact on local government finances.

DRDGOLD's urban operations in Johannesburg showcase the potential for mining companies to contribute to urban renewal. Pretorius explains:

"Johannesburg incidentally is the largest city in the world that's not on a river... it has the largest single deposit of gold in the world when it was discovered."

The company's operations are helping to transform these historical mining areas: "By clearing it, um was also contributing to suppose opening up land in the first place that could be used for residential and Industrial Development."

Financial Performance & Market Opportunity

The current precious metals price environment provides strong tailwinds for both companies. However, both CEOs emphasize disciplined approaches to growth. DRDGOLD is focusing on infrastructure investment and life-of-mine extensions rather than acquisitions at cycle highs. Pretorius explains:

"The capital investment in today's numbers is roughly - if you ask me 3 weeks ago it would have been 75% of our market cap -and today's numbers where the gold price rally is, it's probably closer to 55% of our market cap."

GoGold maintains a dual focus on tailings operations and traditional mining development through their Los Ricos project. Langille notes the company's track record:

"Over the last 28 years, we have been working a lot with private families in Mexico who had kind of 'off the radar' assets and we've been able to get the capital and develop those assets... this would be number five that we built here."

Regulatory Environment & Risk Management

The regulatory landscape continues to evolve, particularly in Mexico with the new administration under President Sheinbaum. GoGold's Langille expresses optimism:

"We're actually excited the way things are going in Mexico... this new Administration will be very much more in line with that thinking."

He notes that the company's approach to development already aligns with stricter environmental and social standards: "Nobody had to tell us that there's areas where you can build a big open pit and there's areas where it's going to be too sensitive."

Operational Excellence & Scale

DRDGOLD's success relies on operational efficiency at scale. Pretorius explains the technical challenges:

"We're an ultra volume mine and we do Nano extraction because we're only recovering about 200 parts per billion... you got to put massive quantities of material through these reduction works in order for it to work financially."

This approach has proven successful, with the company paying dividends consistently for 17 years.

Future Growth Prospects

Both companies are positioned for growth while maintaining disciplined approaches to development. GoGold is advancing its Los Ricos South project toward production while maintaining cash flow from Parral. Langille notes:

"Next year in 2025 we're shovel ready, once we have a permit in hand, to build our next mine Los Rico South mine in our Los Ricos District."

DRDGOLD is investing in infrastructure to extend mine life by 14-23 years across its operations. Pretorius explains their strategic thinking:

"Now is a good time to make sure that whatever infrastructure you need in order to mine successfully and sustainably, at the time when it does turn, that infrastructure is in place."

Technology & Innovation

Both companies leverage technology for environmental management. DRDGOLD's approach includes "a lot of digital monitoring... Technology involved in making sure that you keep this thing in balance." This technological sophistication is essential for maintaining operational efficiency while meeting environmental standards.

Environmental Legacy & Future Opportunities

Both companies see significant opportunities in addressing historical mining impacts. Pretorius explains: "There loads of mining shipwrecks scattered across the landscape here and in many other parts of the world." This represents both a challenge and an opportunity for companies with expertise in environmental remediation.

The Investment Thesis for GoGold Resources & DRDGold

GoGold Resources

• Strong cash flow from Parral tailings operation
• Advanced-stage Los Ricos South project approaching construction
• Exposure to both gold and silver (40:60 ratio)
• Strong community relations and environmental credentials
• Experienced management team with track record in Mexico

DRDGold

• Pure-play tailings reprocessing operation
• Consistent dividend payment for 17 years
• Significant infrastructure investment extending mine life
• Strong ESG credentials with urban rehabilitation focus
• Operational excellence in high-volume, low-grade processing

The precious metals sector is evolving toward more sustainable practices while maintaining profitability. Companies like DRDGOLD and GoGold Resources demonstrate that environmental stewardship can generate consistent returns through innovative approaches to tailings reprocessing and stakeholder engagement. With strong precious metals prices and growing institutional focus on ESG credentials, these companies offer exposure to both traditional precious metals investment themes and sustainable mining practices.