[Moneyweb] -- DRDGOLD's new flotation and fine grind circuit that is currently under construction alongside its Ergo operations is starting to take shape and is planned for commissioning in quarter three next year.
DRDGOLD's new flotation and fine grind circuit that is currently under construction alongside its Ergo operations is starting to take shape and is planned for commissioning in quarter three next year.
On a site visit today the company that specialises in re-using and recycling things showed Mineweb how it is making use of an existing, dormant plant housing next to its Ergo operations to build rows of flotation cells that will skim off the good stuff from the mine dump and tailings slurry for fine-grinding and then treatment in a carbon-in-pulp process.
Subjecting the skimmed off slurry material to the fine grind process using tiny ceramic beads is expected to facilitate easier liberation of the gold in the downstream process and increase overall production by a substantial 16% to 20%.
The lower grade residue from this process will continue to be processed through the existing carbon-in-leach facilities at the Ergo operations.
This latest move comes not long after the company bedded down a 50 kilometre, 600 000 ton per month pipeline that transports mine dump slurry across from its Crown mines and City Deep operations to the main processing facility at Ergo.
DRDGOLD produced 135 708 ounces of gold in its last financial year to end June which resulted from the retreatment of almost 22 million tons of surface tailings at an average grade of 0.20g/t.
CEO, Niël Pretorius, is targeting production of between 140 000 and 150 000 ounces a year.
The sheer size and volume of this business only becomes evident on visiting the operations and gives credence to Pretorius's description of the business as a "gold factory".
With the sale of its only underground mine, Blyvoor, a few months ago, the focus has turned firmly onto optimising recoveries and ensuring that the bulk volumes keep on flowing through its pipelines.
The Ergo operations, approximately 50km east of Johannesburg, also revealed a company that has taken lessons learnt from the Texas oil sands operations and implemented a network of pipelines across the south of Johannesburg along with pumps and monitoring systems to ensure that the low grade, volume sensitive business chugs away 24/7/365.
Redundancy has been built into the system with additional pumps but power failures are one of the main threats to the business as generators would not be able to handle the load explained Henry Gouws, the managing director of the Ergo operations.
A second cyanide carbon-in-leach circuit was refurbished at the Ergo operations to process the additional tonnage that was brought in via the new pipeline and capacity is now 1.8 million tons per month with eyes set on increasing this further to 2.4mtpm.
So why isn't there a string of companies recycling the numerous dumps and tailings dams around Johannesburg? DRDGOLD believes that its competitive advantage and barrier to entry for competitors is its ability to lay all the pipelines and supporting infrastructure to get the material to processing plants.
Henry Gouws, managing director of the Ergo operations said that DRDGOLD owns over 1500 licences and servitudes. It is this said Gouws that will allow the company to expand its pipelines further to the east of the Ergo operations where it is interested in exploring the retreatment of the Marievale and Grootvlei dumps.
The other significant barrier is the limitation on where to deposit residual tailings after re-treatment.
Here, DRDGOLD is busy modifying its Brakpan tailings facility which can be seen from the Ergo operations. This massive dam is currently around 80 metres high and the plan is to add another 40 metres on top of that taking total capacity to 250 million tons.
Next door to the Brakpan dam there is potential to re-commission the Withok tailings facility and further away the currently dormant Daggafontein facility said Gouws.
One of the challenges that the company is facing is keeping dust levels down from the top of its dumps and dams and is busy implementing a system of net windbreaks across the tops of its dumps to try and reduce the impact on surrounding communities.
The gold recycler's last full year results showed a marked improvement to a profit margin of 25% and an attributable profit of just over R300m or 80 cents per share from a loss in the previous period. Headline earnings per share more than trebled to 61 cents per share.
Return on equity has improved to 23% and a dividend yield of 1.65% which, although not high, is competitive amongst gold producers.
The company's share price has climbed 33% over the last year, outstripping the increase in the rand gold price over the same period and is trading just shy of R6 per share with a market capitalisation of R2.3bn (US$270m).
With the company producing at around R300 000/kg the current climb in the rand gold price to over R400 000/kg in the middle of last year and lately to levels just shy of R500 000/kg has reflected in its results.
The business has its origins in Anglo American's commissioning of the Ergo plant in 1978 and Rand Mines establishment of the Crown mines retreatment plant in 1982.
The Crown mines project had an initial life of only eight years at that time - DRDGOLD decommissioned the facility earlier this year after 30 years.