Self-generation of solar power catalysed DRDGOLD’s strong new growth thrust

This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. There's a wonderful gold-price tailwind behind all gold companies at the moment but it's the self-generation of solar electricity that served as the catalyst of change for Ergo. Following the company's declaration of a doubled final 2025 cash dividend on 69% higher cash operating profit and earnings, revenue touching R8-billion and strong free cash flow, Mining Weekly spoke to DRDGOLD CEO Niël Pretorius in a Zoom interview. (Also watch attached Creamer Media video.) "The self-generation of solar electricity was the catalyst and what the gold price is doing for us at the moment is helping us to make the changes that are necessary to extend Ergo's LoM - and they are very much focused around alternative deposition storage capacity. "The gold price cycle has prompted a new direction in the thinking of DRDGOLD, in the sense that the initial capital invested was premised on a mining programme of 12 years and it was going to start running out of steam roughly four years ago, when decommissioning would have started. "But instead, the decoupling and rebasing of gold relative to other economic drivers and indicators pointed to closing perhaps being premature because there were still a lot of resources left. "It's just that those resources were deemed non-viable, and DRDGOLD had to take a very long and hard look at the cost construct of Ergo. "One of the things that really got in the way was the uncertainty with regards to the supply and the cost of electricity and if the company could find a solution for that, then many of the other things we'd be able to do by way of engineering solutions. "So, we decided on the 60 MW solar farm, which was duly built, and that was coupled to the battery energy storage system, which is a 180 MW storage system, which means that we could basically run Ergo and related infrastructure for 12 hours a day on renewable energy. "It's like a halving of Ergo carbon footprint, and it brought down the risk categorisation. It changed the risk profile of Ergo because electricity moved from number two to a lot lower down in the risk hierarchy of Ergo. "Brakpan tailings dam, which has been around since 1984, has to all intents and purposes served out its term as a useful facility. "It's now not quite in a decommissioning phase, although we've reduced deposition onto that dam from 2.1-million tons per month back in 2022 down to 1.65-million tons per month, and it will progressively be reduced even further. The focus point for Ergo is to create new deposition space and to resume deposition on Daggafontein, which is another available deposition facility, that at 500 000 t a month can be used for another 20 years. "The gold price is helping us to do that. We could spend all of this capital, at Ergo about R4-billion over the next few years, without having to dip into our facility, and the same applies to Far West Gold. "We've been talking about Far West Gold Phase 1 and Far West Gold Phase 2 since the early days of acquiring Far West Gold and we're now executing on Phase 2. "We're doubling the size of the plant from a design capacity of 600 000 t a month to 1.2-million tons a month and under way is the construction of the Regional tailing storage facility, the RTSF, which is an 800 ha facility that's going to be fully lined. That's been going since June of last year, and that's going along really well. "There have been some rain interruptions and so forth, but that facility is going to facilitate a change in throughput profile and change in production profile for Far West Gold going forward, also adding about 20 years of life, so that target we spoke about at DRDGOLD's 130th anniversary celebration earlier this year, and hopefully we'll be here to celebrate our 150th anniversary. "The gold price is helpi...