niël pretorius, chief executive officer
TRANSCRIPT
Niël Pretorius, Chief Executive Officer
The Astrologer's Fund Inc
Triple Gold Summer Conference
14 July 2021
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 sustained strengthening of the Rand against the Dollar,
regulatory developments adverse to DRDGOLD or difficulties in maintaining necessary licenses 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
annual report for the fiscal year ended 30 June 2020, which we filed with the United States Securities and Exchange Commission on 29 October 2020 on Form 20-F. 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 to the occurrence of unanticipated events. Any forward-looking statements included in this presentation have not been reviewed and reported on by DRDGOLD’s auditors.
DISCLAIMER
2
12 THINGS YOU NEED TO KNOW ABOUT US
1. South Africa-based world
leader in large-scale gold
tailings retreatment
• 5.73Moz reserve
• 10.39Moz resource
• 1 000km2 + operating footprint
3
2. Two Witwatersrand operations
• Ergo
• 3.13Moz reserve
• 7.79Moz resource
• Far West Gold Recoveries
•2.60Moz reserve and resource
3. Low operating risk
• relative to deep-level
underground mining
• ‘mining where the sun shines’
• summer rainfall the biggest risk
ITO operational disruption
5. R&D programme
• getting more out of less
4. Highly mechanised
• digitisation – 24/7/365 operational surveillance
• small, skilled and experienced workforce
• years-long track record of labour stability
6. Sound regulator relationships
• broad based black economic
empowerment
• Mineral and Petroleum Resources
Development Act-compliant
12 THINGS YOU NEED TO KNOW ABOUT US
4
8. Compelling ESG proposition
• reversing gold mining’s
environmental legacy
• liberating land for redevelopment
• empowering host communities
9. No 1 among top 100 JSE-listed
companies in 2020
• highest shareholder returns over
the past five years
10. Dividends
• 14 years’ uninterrupted payments
12. Growth prospects
• gold and beyond, leveraging
Sibanye-Stillwater relationship
• working arrangement with power utility Eskom
• reducing grid dependence option
• reducing potable water dependence
7. Power, water supply stability
11. Market capitalisation
• R15 537m (US$1 014m) at
31 December 2020
GROUP HIGHLIGHTS: SIX MONTHS ENDED 31 DECEMBER 2020as compared to six months ended 31 December 2019
5
AVERAGE RAND
GOLD PRICE
RECEIVED
42% increase
R988 998 per kg
REVENUE
41% increase
R2 977.4m
PRODUCTION
2% decrease
2 984kg
HEADLINE
EARNINGS
R949.2m
OPERATING
PROFIT
100% increase
R1 441.8m
INTERIM
DIVIDEND
declared(25 cents per share for
H12020)
40cents per share
ALL-IN
SUSTAINING
COSTS
17% increase
R597 605per kg
(US$1 144 per ounce)
OPERATING UPDATE FOR THE QUARTER ENDED 31 MARCH 2021
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0EXTERNAL BORROWINGS
R549 817CASH OPERATING COST
PER KG SOLD
R645 488ALL-IN SUSTAINING COST
PER KG
R371.7mEBITDA
(35% decrease)
3%increase 1 382kg
PRODUCTION
R2 165.7mCASH AND CASH
EQUIVALENTS
6%increase
R857 895/kgAVERAGE GOLD PRICE
RECEIVED
9%decrease
6%decrease
0.2%decrease
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Environmental value-add highlights 2020 2019 2018
Environmental spend Rm 54.4 45.8 51.6
Hectares of TSFs vegetated Ha 66 56 35
Energy consumption Mwh 350 914 392 007 383 151
Potable water consumption Mℓ 2 659 2 732 3 377
Total carbon emissions CO2e 372 025 416 324 372 678
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
EV/EBITDA
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Source: finbox as at 7 July 2021
ZAR 1 495.00
USD 10.38
08 July 2021
SHARE PRICE RETURN ON CAPITALDRDGOLD = 29%
Metals and mining industry average = 11%(source: nasdaq.com)
Note: * ratios works on fwd EBITDA
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Dividend Yield (%)
0
20
40
60
80
100
120
140
160
Price to Earnings (x)
0%
2%
4%
6%
8%
10%
12%
14%
FCF Yield (%)
-
200
400
600
800
1 000
1 200
1 400
1 600
AISC ($/oz)
VALUATION METRICS* – DRDGOLD vs PEERS
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Source: Wallmine (quoting NSYE, TSX and OTC as at 7 July 2021; wallmine.com) Source : Wallmine (quoting NSYE, TSX and OTC as at 7 July2021; wallmine.com)
Source: Bloomberg; bloomberg.comSource: Wallmine (quoting NSYE, TSX and OTC as at 7 July 2021; wallmine.com)
(*Latest available figures)
SNOWFLAKE ANALYSIS
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Source: Simply Wall Street; www.simplywall.st
• A company's score out of 5 for each criterion determines size,
shape and colour of Snowflake
• The greater the number of successful checks, the larger, rounder
and greener the snowflake will be
SG
11
E
\ENVIRONMENTAL SOCIAL GOVERNANCE
12
E
Independent
Tailings Review Board
in place since 2018
TAILINGS MANAGEMENT
Review of Historical Interferometric Synthetic
Aperture Radar (InSAR) imagery for mapping
ground deformation over large areas
Internal Tailings Performance Management System (TPMS) implemented
for dedicated data collection, storage and processing. Ensures integrity of
data for day-to-day management and oversight
Quarterly drone
surveillance
Our performance for the six months
ended 31 December 2020
8% 0.3% R51.9m 52.5ha 26.6haincrease in
externally sourced
potable water
dust emissions
exceedances
spent on
rehabilitation
tailings deposition
facilities vegetated
lodged with NNR
and awaiting
approval
13
spent on socio-economic development, including through Broad-Based Livelihoods Programme
and Merafong / Soweto / Ekurhuleni (MSE) initiative delivering COVID-19 relief to communities
(R14.1 million spent in H12020)
R19.6m
SOur performance for the six months
ended 31 December 2020
14
GOur performance for the six months
ended 31 December 2020
International Integrated
Reporting Council
Responsible Mining
Principles
LOOKING AHEAD
15
FY2020 GUIDANCE ERGOFAR WEST GOLD
RECOVERIES
• More than halfway to
achieving the upper range
of gold production target
of between 165 000oz and
185 000oz
• @ cash operating cost of
~R535 000/kg
Plans to increase deposition
capacity continue
Work on Phase 2 feasibility
study continues
Copper elution facility now
online, set to improve quality of
gold in bullion
Trends Financial Reviews COVID Response FWGR Copper Elution Project
16
ADDITIONAL INFORMATION
https://www.drdgold.com/investors-and-media/presentations/2021
GROUP OPERATING TRENDS
17
13 983
12 297
14 333
11 000
11 500
12 000
12 500
13 000
13 500
14 000
14 500
HY1 FY2020 HY2 FY2020 HY1 FY2021
Volume (000t)
0.217
0.194
0.208
0.180
0.190
0.200
0.210
0.220
HY1 FY2020 HY2 FY2020 HY1 FY2021
Yield (g/t)
3 037
2 387
2 984
1 000
1 500
2 000
2 500
3 000
3 500
HY1 FY2020 HY2 FY2020 HY1 FY2021
Production (kg)
ERGO OPERATING TRENDS
18
10 906
9 322
11 257
0
2 000
4 000
6 000
8 000
10 000
12 000
HY1 FY2020 HY2 FY2020 HY1 FY2021
Volume (000t)
0.209
0.184
0.202
0.170
0.180
0.190
0.200
0.210
0.220
HY1 FY2020 HY2 FY2020 HY1 FY2021
Yield (g/t)
2 274
1 715
2 269
900
1 100
1 300
1 500
1 700
1 900
2 100
2 300
HY1 FY2020 HY2 FY2020 HY1 FY2021
Production (kg)
FWGR OPERATING TRENDS
19
3 077 2 975 3 076
0
500
1 000
1 500
2 000
2 500
3 000
3 500
HY1 FY2020 HY2 FY2020 HY1 FY2021
Volume (000t)
0.248
0.226
0.232
0.215
0.220
0.225
0.230
0.235
0.240
0.245
0.250
HY1 FY2020 HY2 FY2020 HY1 FY2021
Yield (g/t)
763
672715
0
200
400
600
800
HY1 FY2020 HY2 FY2020 HY1 FY2021
Production (kg)
34.1
40.6
48.4
0
10
20
30
40
50
60
HY1 FY2020 HY2 FY2020 HY1 FY2021
Operating margin (%)
GROUP FINANCIAL TRENDS
20
26.7
32.7
39.7
0
10
20
30
40
HY1 FY2020 HY2 FY2020 HY1 FY2021
All-in sustaining costs margin (%)
406.6
519.8
759.6
-100
0
100
200
300
400
500
600
700
800
HY1 FY2020 HY2 FY2020 HY1 FY2021
Free cash flow (Rm)
48.4
34.0
111.0
-20
0
20
40
60
80
100
120
HY1 FY2020 HY2 FY2020 HY1 FY2021
HEPS (cents per share)
ERGO FINANCIAL RESULTS
21
1 589.61 474.7
2 268.7
0
500
1 000
1 500
2 000
2 500
HY1 FY2020 HY2 FY2020 HY1 FY2021
Revenue (Rm)
-1 200.1
-1 073.9
-1 316.9-1 350
-1 300
-1 250
-1 200
-1 150
-1 100
-1 050
-1 000
HY1 FY2020 HY2 FY2020 HY1 FY2021
Cash operating costs (Rm)
364.5427.6
933.8
0
200
400
600
800
1 000
HY1 FY2020 HY2 FY2020 HY1 FY2021
Operating profit (Rm)
FWGR FINANCIAL RESULTS
22
521.8598.9
708.7
0
100
200
300
400
500
600
700
800
HY1 FY2020 HY2 FY2020 HY1 FY2021
Revenue (Rm)
-177.2 -174.8
-201.9-220
-170
-120
-70
-20
30HY1 FY2020 HY2 FY2020 HY1 FY2021
Cash operating costs (Rm)
355.1
414.9
508.0
-20
80
180
280
380
480
580
HY1 FY2020 HY2 FY2020 HY1 FY2021
Operating profit (Rm)
FINANCIAL REVIEW: STATEMENT OF PROFIT OR LOSSfor the six months ended 31 December 2020
Six months to
31 Dec 2020
Six months to
31 Dec 2019
Rm Rm
Revenue 2 977.4 2 111.4
Cost of sales (1 701.7) (1 544.2)
Gross profit from operating activities 1 275.7 567.2
Other income 0.2 0.2
Administration expenses and other costs (19.8) (85.1)
Results from operating activities 1 256.1 482.3
Finance income 102.8 34.4
Finance expenses (30.1) (32.2)
Profit before tax 1 328.8 484.5
Income tax (379.4) (151.6)
Profit for the period 949.4 332.9
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As at
31 Dec 2020
As at
31 Dec 2019
Rm Rm
Property, plant and equipment 2 697.1 2 738.0
Non-current investments and other assets 910.3 646.0
Deferred tax assets 8.3 9.3
Cash and cash equivalents 2 169.4 543.4
Other current assets 501.9 428.9
Total assets 6 287.0 4 365.6
Equity 4 726.9 2 884.9
Provision for environmental rehabilitation 567.9 695.7
Deferred tax liability 355.7 270.1
Other non-current liabilities 43.8 52.3
Current liabilities 592.7 462.6
Total equity and liabilities 6 287.0 4 365.6
Current ratio 4.5 2.1
FINANCIAL REVIEW: STATEMENT OF FINANCIAL POSITIONas at 31 December 2020
24
FINANCIAL REVIEW: STATEMENT OF CASH FLOWSfor the six months ended 31 December 2020
Six months to
31 Dec 2020
Six months to
31 Dec 2019
Rm Rm
Net cash inflow from operating activities 982.3 452.9
Cash generated by operations 1 085.0 500.4
Interest and dividends received 85.7 13.1
Interest paid (3.8) (3.0)
Income tax paid (184.6) (57.6)
Net cash outflow from investing activities (222.7) (46.3)
Acquisition of property, plant and equipment (202.1) (37.3)
Proceeds on disposal of property, plant and equipment 0.2 0.2
Environmental rehabilitation payments (20.8) (9.2)
Net cash outflow from financing activities (305.3) (142.7)
Initial fees incurred on borrowings (1.0) -
Dividends paid on ordinary share capital (299.1) (136.8)
Repayment of lease liabilities (5.2) (5.9)
Increase in cash and cash equivalents 454.3 263.9
Opening cash and cash equivalents 1 715.1 279.5
Closing cash and cash equivalents 2 169.4 543.4
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RESPONSE TO COVID-19
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15 March 26 March 16 April 1 June 18 August 21 September 28 December 28 June
2020 2020 2020 2020 2020 2020 2020 2021
South Africa
declares
State of Disaster
operations continue
South Africa eases lockdown
regulations
• underground mining resumes at
50% of capacity
• health and safety precautions
remain in place
• strong balance sheet allows for
continued caution
South Africa moves to lockdown
level 1
• operations back at full production
• health and safety precautions
remain in place
• 2.1% of workforce tested positive
• 4 cases out of 54 still active
• no fatalities
South Africa declares 21-day
National Lockdown
• operations temporarily halted
• dispensation for surface mining
operations – regulators, unions
engaged on work resumption
• Ergo resumes with 34% of staff,
FWGR with 60% of staff
• screening, hygiene, social
distancing, personal protective
equipment measures prioritised
South Africa moves to
lockdown level 3
• underground mining resumes
at 100%
of capacity
• health and safety precautions
remain
in place
• strong balance sheet
allows for continued
caution
South Africa moves to lockdown
level 2
• health and safety precautions
remain in place
• 1.9% of workforce tested positive
• 3 cases out of 52 still active
• no fatalities
South Africa returns to
adjusted lockdown level
4 as 3rd wave rises
• operations remain at full
production
South Africa returns to adjusted
level 3 lockdown
• operations proceed with continued
caution. Total 237 COVID-19 tests
conducted to 31 December 2020
DRDGOLD application to DOH
as vaccination site pending
approval
• Phase 2 vaccination campaign
underway nationally
COVID-19 AND COMMUNITY SUPPORT
BEYOND OUR GATES
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Staff contribute R1.6 million to nationwide
COVID-19 Solidarity FundThe MSE Initiative
Support for 6 264 families
in need
Awards of Appreciation from City of
Johannesburg and social partners for
MSE Relief efforts
Participants in the Broad
Based Livelihoods
Programme learn how to
preserve their excess
produce.
28
Improving quality of
reclaimed gold
• FWGR copper elution facility addresses
purity levels in gold bullion compromised
by copper content
• Achieving bullion purity above 60% would
shift refinery’s gold allocation up from
98% to 99.5%
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CONTACT
DETAILS
Niël Pretorius, CEO James Duncan, investor relations Registered office
Corporate Office Park
Cycad House, Building 17
Cnr 14th Ave / Hendrik
Potgieter Road
Weltevreden Park 1709
PO Box 390
Maraisburg 1700
South Africa
Shareholder data
(Incorporated in the Republic of South Africa)
Registration No.1895/000926/06
JSE share code: DRD
ISIN: ZAE 000058723
NYSE share code: DRD
Riaan Davel, CFO Email: [email protected]
Tel: +27 (0) 11 470 2600
Fax: +27 (0) 86 524 3061
Email: [email protected]
Website: www.drdgold.com