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DRDGOLD mulls uranium add-on, moots AMD water use

[MiningWeekly] -- JSE-listed DRDGOLD is mulling a uranium add-on to its gold recovery plant at Ergo and is talking to the government about using treated acid mine drainage water in its gold reclamation process on the East Rand.

JOHANNESBURG (miningweekly.com) – JSE-listed DRDGOLD is mulling a uranium add-on to its gold recovery plant at Ergo and is talking to the government about using treated acid mine drainage (AMD) water in its gold reclamation process on the East Rand.

DRDGOLD CEO Niël Pretorius tells Mining Weekly Online in a video interview (see attached) that the board has also given the company its approval to explore expansion possibilities into other reclamation/recovery domains beyond gold.

He was speaking after DRDGOLD reported a 53% increase in operating profit in the year to June 30, off a 36% gold-price increase and spurted R207-million free cash flow.

DRDGOLD is scheduled to complete the building of its flotation and fine-grind circuit before June. If this is successful, it will invest a further R150-million in a uranium-recovery add-on, Pretorius tells Mining Weekly Online.

The R350-million Ergo plant upgrade to 1.8-million tons a month has been completed, with the Crown/Ergo pipeline facilitating full consolidation of the Ergo surface retreatment capacity, where 135 708 oz of gold was recovered in the 12 months to June 30.

“There are still hundreds of millions of tons of material in and around Johannesburg, so there is plenty to go,” he explains.

But what DRDGOLD want to do is to optimise the process of extracting the minerals contained in those tailings and there are seen to be compelling financial, commercial and sustainable-development arguments to be made for ensuring that all value is extracted from the material going into the plant.

“If we achieve the flotation recoveries that we set out to achieve, then the uranium will be the first add-on,” Pretorius says.

ACID MINE DRAINAGE USE

While DRDGOLD’s initial plan was for AMD water use in its reclamation processes, it is reaching agreement in principle with the Department of Water Affairs for the use of treated AMD, much of which originates from ownerless mines.

“We’re in discussion with the Department of Water Affairs and I think we’re in principle agreement on how we could structure an arrangement where they can in fact intercept what they consider to be their water,” Pretorius says.

He sees a synergy and believes DRDGOLD could make use of the partly treated AMD water that emerges.

“We would then be able to access that water and not tap into potable water resource,” he adds.

DRDGOLD SPURTS FREE CASH

JSE-listed surface gold company DRDGOLD spurted R207-million in free cash from its continuing operations in the year to June 30, from a negative R11-million in the previous financial year.

DRDGOLD CFO Craig Barnes described the cash-after-capital-spend spurt as a key measure of the company’s success.

Against a gold price rise of 36%, operating profit ratcheted up another 17 percentage points above that to R622.2-million for the year, compared with R407-million in the previous financial year.

The operating margins were 35% and earnings before interest, taxes, depreciation and amortisation rose by 63% to R346.9-million for the year.

The gearing of the company to the gold price is reflected in the 259%-higher headline earnings a share going through the roof.