Johannesburg - JSE-listed DRDGold has grown its market capitalisation and recorded a total dividend yield of 7.3 percent in the 2016 financial year, the company’s chief executive, Niel Pretorius, said in its annual report.
DRDGold has posted record profits in tandem with the gold sector largely as a result of the 21 percent increase in the South African gold price in the year to June and the combination of a stable gold price and a weaker rand.
The company has strengthened 153 percent on the JSE in the year to date to trade at R6.61 a share and has grown its market capitalisation to almost R3 billion.
Acceptable return
Pretorius said the company’s primary stakeholder remained its shareholder base, adding it was their capital that was applied to set up infrastructure, hire staff and grow the business.
“The principal reason it is entrusted to us, is to generate an acceptable return.
“Against this backdrop, the growth in market capitalisation and a total dividend yield of 7.3 percent - in our ninth consecutive year of uninterrupted dividend yield, and this the first year in which we paid a third quarter dividend - is a satisfying outcome for us,” Pretorius said.
DRDGold, which mines old gold dumps in Johannesburg, aims to reach its goal to halve the number of dust emission “exceedances” and each year at least 24 hectares of vegetation is added to the already 538ha of vegetated land.
DRDGold’s chairman, Geoff Campbell, said in the annual report that in the year to June 2016, the company had achieved much of what it had set out to do.
“The plant throughput was on budget in spite of interruptions due to extreme weather and power-supply disruptions, and we moved almost 25 million tons of tailings over vast distances during the year,” Campbell said.
“However, we are not where we want to be in terms of operational efficiency and we face the technical challenge of managing complicated systems so that they perform at optimal efficiency every time, all the time,” he added.
Campbell said the company was applying its collective intellectual know-how to eke out the most minuscule fractions of gold to meet future headwinds.
He said DRDGold expected to see additional challenges in the year ahead as mining operations at its Crown operations came to a close and the operation underwent environmental rehabilitation.
“This work is an essential aspect of our activities and the way we substantially improve the lives of people in the communities where we operate,” he said.
“Through our work on environmental rehabilitation, we have built up world-class expertise in this area.”
Innovation
Campbell said the extraordinarily low and declining grade of the materials “we process is both a challenge and an opportunity”.
Through continuous improvement and innovation, DRDGold aims to increase the amount of gold recovered from the material coming through the plant.
The company is continuing the work to move the plans for the extended Brakpan/Withok Tailings Deposition Facility towards feasibility and will need more space to deposit the tailings from the additional material it plans to mine and treat in years to come.
DRDGold shares plunged 2.12 percent on the JSE yesterday to close at R6.46.
BUSINESS REPORT