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DRDGOLD reflects on a year of transition as the Company continues the journey to responsibly roll back mining’s environmental legacy

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Published: Monday, 30 October 2023 17:46

Johannesburg, South Africa. 30 October 2023. DRDGOLD Limited (JSE: DRD, A2X, NYSE: DRD) Chairman, Tim Cumming, and CEO, Niël Pretorius, in the Company’s Annual Integrated Report (AIR) 2023 released today, reflect on a FY2023 transitional year in which the Company produced good results in the face of various challenges.

Several high-volume reclamation sites reached the end of their life, to be replaced by four new sites at Ergo and one at FWGR. A delay in the commissioning of new sites due to regulatory complexity relating to Water Use Licenses resulted in significantly lower volume throughput than targeted. The Company, nonetheless, managed to deliver decent results with higher grades from late phase clean-up and the mechanical mining of legacy sites, assisted by a favourable gold price.

They explained that production for the year was good, with just under 170 000 ounces of gold produced. Revenue increased by 7% and the Company while headline earnings were up 14%. The financial year ended with R2.47 billion in cash savings, allowing for the total dividend for FY2023 to increase to 85 cents from 60 cents.

“The key to the successful exploitation of our Company’s resource, which consists of several mine dumps spread across the East, Central and Far West Rand, lies both in the sequencing of retreating reclamation sites as well as in the mix that is fed through to the plants. We choose not to ‘high-grade’ our dumps i.e., mining out the highest-grade dumps first - but rather to blend material from multiple sites to ensure that the optimal head-grade is processed,” they are quoted as saying.

DRDGOLD is addressing the very substantial challenge of unreliable electricity supply by constructing a 60MW photovoltaic power plant at Ergo in two phases of 20MW and 40MW respectively and linking it to the national grid to allow for the “wheeling” of power to its other production sites.

“This facility will considerably reduce operational risk, reduce the cost of power and almost halve our carbon footprint whilst also delivering a significant investment return for the Company. As a company whose entire strategy is built around sustainable development and integrated value add, this is a textbook example of an investment in technology that contributes to a range of sustainable development capital-stocks,” they commented.

The DRDGOLD AIR 2023 highlights the Company’s performance in FY2023 against five criteria – financial, operational and growth, environmental, social, and health and safety:

• An operating profit of R1 819 million, and free cash inflow of R469.1 million
• 16 uninterrupted years of paying a dividend
• Gold production of 5 282kg from 23 million tonnes at an average yield of 0.229g/t
• R41.9 million spent on environmental management with 30ha of land cleared by the National Nuclear Regulator for redevelopment
• R55.2 million invested in social and economic development
• Zero fatalities and a lost time injury frequency rate and reportable injury frequency rate of 1.49 and 1.08 respectively
• Phase 1 of the solar project at Ergo nearing completion with phase 2 approved
• Reclamation of FWGR’s Driefontein #3 dam commissioned

On its short-term strategic outlook (FY2024), business continuity, resilience and efficiency remain foremost as the Company focuses on generating cash and controlling costs in a high-inflation environment.

Note to editors:

DRDGOLD’s full report suite for FY2023 comprising the AIR, Annual Financial Statements, Notice of Annual General Meeting, and ESG fact sheet can be accessed on the Company’s website under Reports and results. The annual report on Form 20-F will also be filed and can be accessed on the SEC website and DRDGOLD’s website later today, 30 October 2023.

Forward-looking Statements

Many factors could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in the gold price, a prolonged strengthening of the Rand against the Dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licences or other governmental approvals, changes in DRDGOLD’s competitive position, changes in business strategy, any major disruption in production at key facilities or adverse changes in foreign exchange rates and various other factors.

These risks include, without limitation, those described in the section entitled “Risk Factors” included in our Form 20-F for the fiscal year ended 30 June 2023, which we filed with the United States Securities and Exchange Commission (SEC) on 30 October 2023. You should not place undue reliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this report or the occurrence of unanticipated events. Any forward-looking statement included in this report has not been reviewed or reported on by DRDGOLD’s auditors.

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