PART I [Key Information](index=9&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section presents DRDGOLD's selected financial data and outlines key business, industry, and ownership risks [Selected Financial Data](index=9&type=section&id=3A.%20SELECTED%20FINANCIAL%20DATA) DRDGOLD's fiscal 2019 revenue and profit increased significantly, driven by the FWGR acquisition, boosting assets and earnings per share Selected Consolidated Financial Data (Fiscal Years 2017-2019) | Financial Metric | 2019 (R million) | 2018 (R million) | 2017 (R million) | | :--- | :--- | :--- | :--- | | **Revenue** | 2,762.1 | 2,490.4 | 2,339.9 | | **Results from operating activities** | 125.2 | 52.0 | (24.6) | | **Profit for the year attributable to equity owners** | 78.5 | 6.5 | 13.7 | | **Total assets** | 4,059.9 | 2,360.5 | 2,287.4 | | **Equity (Net assets)** | 2,688.5 | 1,267.2 | 1,302.4 | | **Basic earnings per share (cents)** | 11.8 | 1.5 | 3.2 | [Risk Factors](index=11&type=section&id=3D.%20RISK%20FACTORS) The company faces significant risks from gold price volatility, FWGR integration, South African instability, and major shareholder influence - The profitability of operations is highly sensitive to fluctuations in the market price of gold and the **ZAR/USD exchange rate**, as production costs are in rands while gold is sold in dollars[32](index=32&type=chunk)[33](index=33&type=chunk) - The development of large projects, particularly the newly acquired Far West Gold Recoveries (FWGR), is subject to significant risks of **schedule delays and cost overruns**, which could render them less profitable or unviable[41](index=41&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk) - Operations in South Africa face substantial risks from **political and economic instability**, **high inflation**, and critical infrastructure challenges, including **power stoppages** from the state-owned utility Eskom and **water scarcity**[93](index=93&type=chunk)[94](index=94&type=chunk)[108](index=108&type=chunk)[117](index=117&type=chunk) - Sibanye-Stillwater holds approximately **38.05%** of outstanding shares and has an option to increase its stake to **50.1%**, giving it significant influence over the company's board and strategic decisions, which may create conflicts of interest with other shareholders[160](index=160&type=chunk) [Information on the Company](index=23&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details DRDGOLD's corporate history, business model, organizational structure, and physical assets, including the FWGR acquisition [History and Development of the Company](index=23&type=section&id=4A.%20HISTORY%20AND%20DEVELOPMENT%20OF%20THE%20COMPANY) DRDGOLD, a surface gold tailings retreatment specialist, significantly expanded assets and reserves through the July 2018 FWGR acquisition - On **July 31, 2018**, the company acquired the West Rand Tailings Retreatment Project (WRTRP) assets from Sibanye-Stillwater, renaming it Far West Gold Recoveries (FWGR)[167](index=167&type=chunk) - The acquisition of FWGR significantly increased the company's assets. As consideration, DRDGOLD issued new shares to Sibanye-Stillwater, giving them a **38.05%** stake and an option to increase ownership to **50.1%** within two years[167](index=167&type=chunk) - A legal review is underway to increase the deposition capacity of the Brakpan/Withok TSF, which could potentially increase capacity by **800 million tons** and extend the life of the Ergo mine from 11 years to over 20 years[173](index=173&type=chunk) [Business Overview](index=24&type=section&id=4B.%20BUSINESS%20OVERVIEW) DRDGOLD specializes in surface gold tailings retreatment, with ore reserves significantly boosted by the FWGR acquisition - The company's business is **surface gold tailings retreatment**, which involves reprocessing waste material from historical underground mining activities to extract gold[178](index=178&type=chunk)[183](index=183&type=chunk) Ore Reserves Change (Fiscal 2018 vs. 2019) | Metric | June 30, 2018 (million ounces) | June 30, 2019 (million ounces) | Change (million ounces) | | :--- | :--- | :--- | :--- | | **Ore Reserves** | 3.28 | 5.77 | +2.49 | - The increase in Ore Reserves was mainly due to the acquisition of the FWGR project from Sibanye-Stillwater, which added **2.72 million ounces**, offset by depletion from mining activities[200](index=200&type=chunk) - The company must comply with the Broad-Based Socio-Economic Empowerment Charter of 2018 (Mining Charter 2018), which requires a **30% BEE interest** for new mining rights and sets targets for local procurement and management representation[216](index=216&type=chunk)[217](index=217&type=chunk) [Organizational Structure](index=32&type=section&id=4C.%20ORGANIZATIONAL%20STRUCTURE) This section illustrates the company's principal South African subsidiaries as of June 30, 2019 - The report includes a chart showing the principal subsidiaries as of **June 30, 2019**, all of which are incorporated in South Africa[242](index=242&type=chunk) [Property, Plant and Equipment](index=33&type=section&id=4D.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) This section details DRDGOLD's key properties and operations, Ergo and FWGR, including production and cost data - The Ergo operation consists of two gold-producing metallurgical plants (Ergo and Knights) with a combined installed capacity to treat approximately **25 million tons** per year[250](index=250&type=chunk) Ergo Production and Costs (Fiscal 2017-2019) | Metric | 2019 (ounces) | 2018 (ounces) | 2017 (ounces) | | :--- | :--- | :--- | :--- | | **Gold produced** | 144,453 | 150,433 | 137,114 | | **Revenue** | 2,577.5 (R million) | 2,490.4 (R million) | 2,339.9 (R million) | | **Cash operating costs** | 512,439 (Rands per kilogram) | 458,866 (Rands per kilogram) | 489,549 (Rands per kilogram) | - The newly acquired FWGR operation commenced commercial production for Phase 1 on **April 1, 2019**, after reconfiguring its DP2 plant[290](index=290&type=chunk) FWGR Production and Costs (Fiscal 2019) | Metric | 2019 (ounces) | | :--- | :--- | | **Gold produced** | 10,706 | | **Revenue** | 184.6 (R million) | | **Cash operating costs** | 313,443 (Rands per kilogram) | [Operating and Financial Review and Prospects](index=40&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes DRDGOLD's financial performance, liquidity, and outlook, highlighting profit growth driven by FWGR and gold prices [Operating Results](index=40&type=section&id=5A.%20OPERATING%20RESULTS) Fiscal 2019 profit surged due to increased gold production and prices, despite rising costs, with ore reserves significantly up - Profit for fiscal 2019 increased significantly due to a **3%** rise in gold production, an **8%** increase in the average rand gold price, and a non-recurring credit of **R60.0 million** from a change in the environmental rehabilitation provision estimate[317](index=317&type=chunk) Key Financial and Operating Indicators (Fiscal 2018 vs. 2019) | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | **Revenue** | 2,762.1 (R million) | 2,490.4 (R million) | | **Gold production** | 155,159 (ounces) | 150,433 (ounces) | | **Average gold price received** | 577,483 (Rands per kilogram) | 534,368 (Rands per kilogram) | | **Cash operating costs** | 499,749 (Rands per kilogram) | 458,866 (Rands per kilogram) | | **All-in costs** | 600,941 (Rands per kilogram) | 524,651 (Rands per kilogram) | | **Ore Reserves** | 5.77 (million ounces) | 3.28 (million ounces) | - Capital expenditure increased significantly to **R347.4 million** in FY2019 from **R125.9 million** in FY2018, primarily due to **R324.4 million** spent on the development of Phase 1 of FWGR[341](index=341&type=chunk) Reconciliation of Adjusted EBITDA (FY 2019) | Item | Amount (R million) | | :--- | :--- | | **Profit for the year** | 78.5 | | Income tax | 26.6 | | Finance expense | 78.4 | | Finance income | (58.3) | | Depreciation | 169.1 | | Share based payment | 21.4 | | Change in estimate of environmental rehabilitation | (60.0) | | Other adjustments | (1.6) | | **Adjusted EBITDA** | **254.1** | [Liquidity and Capital Resources](index=52&type=section&id=5B.%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Fiscal 2019 saw increased operating cash flow but higher investing outflow due to FWGR, with sufficient liquidity for 2020 Summary of Cash Flows (Fiscal 2018 vs. 2019) | Cash Flow Activity | 2019 (R million) | 2018 (R million) | | :--- | :--- | :--- | | **Net cash from operating activities** | 288.3 | 233.8 | | **Net cash from investing activities** | (303.0) | (140.4) | | **Net cash from financing activities** | (7.9) | (45.0) | | **Cash and cash equivalents at year end** | 279.5 | 302.1 | - The increase in cash used for investing activities was mainly due to **R347.4 million** in additions to property, plant and equipment, of which **R330.7 million** was for the FWGR project[395](index=395&type=chunk)[396](index=396&type=chunk) - The company has an available **R300 million** Revolving Credit Facility, of which **R125 million** is committed to a guarantee, leaving **R175 million** available[404](index=404&type=chunk) [Trend Information](index=53&type=section&id=5D.%20TREND%20INFORMATION) DRDGOLD targets 175,000-190,000 ounces gold production for FY2020, with strong Q1 FY2020 results driven by FWGR - The company targets gold production of **175,000 to 190,000 ounces** for fiscal year 2020, with cash operating costs of approximately **R490,000 per kilogram**[406](index=406&type=chunk) Operating Results (Quarter ended Sep 30, 2019 vs. Jun 30, 2019) | Metric | Q1 FY2020 (Sep 30, 2019) (ounces) | Q4 FY2019 (Jun 30, 2019) (ounces) | % Change | | :--- | :--- | :--- | :--- | | **Gold produced** | 48,001 | 45,590 | 5% | | **Average gold price received** | 696,368 (Rands per kilogram) | 603,755 (Rands per kilogram) | 15% | | **Cash operating costs** | 459,868 (Rands per kilogram) | 475,657 (Rands per kilogram) | -3% | - Adjusted EBITDA **more than doubled** in the first quarter of fiscal 2020 compared to the previous quarter, driven by a **15%** increase in the gold price received and a **6%** increase in gold sold[413](index=413&type=chunk) [Tabular Disclosure Of Contractual Obligations](index=54&type=section&id=5F.%20Tabular%20Disclosure%20Of%20Contractual%20Obligations) The company's contractual obligations total R1,137.6 million, primarily environmental rehabilitation and trade payables Contractual and Cash Obligations (as of June 30, 2019) | Obligation Type | Total (R million) | Less than 1 year (R million) | 1-3 years (R million) | 3-5 years (R million) | More than 5 years (R million) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Provision for environmental rehabilitation** | 682.6 | 56.7 | 120.8 | 106.3 | 398.8 | | **Finance leases** | 11.0 | 11.0 | - | - | - | | **Trade and other payables** | 419.2 | 419.2 | - | - | - | | **Purchase obligations** | 18.6 | 18.6 | - | - | - | | **Total** | **1,137.6** | **508.0** | **124.5** | **106.3** | **398.8** | [Directors, Senior Management and Employees](index=54&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details DRDGOLD's leadership, compensation, board practices, employee information, and incentive schemes [Directors and Senior Management](index=54&type=section&id=6A.%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) As of June 30, 2019, the board comprised eight directors, with recent appointments following the FWGR transaction - The board of directors consisted of **eight members** as of June 30, 2019[416](index=416&type=chunk) - Recent board appointments include **Jean Johannes Nel** (November 2018) in connection with the WRTRP asset acquisition and **Kuby Prudence Lebina** (May 2019)[419](index=419&type=chunk)[420](index=420&type=chunk) [Compensation](index=56&type=section&id=6B.%20COMPENSATION) Fiscal 2019 director and officer remuneration totaled R24.8 million, with executive incentives tied to KPIs Director and Prescribed Officer Remuneration (FY 2019) | Individual | Total Remuneration Recognised (thousand Rands) | | :--- | :--- | | **Executive Directors** | | | D J Pretorius (CEO) | 6,481 | | A J Davel (CFO) | 3,669 | | **Total Executive** | **10,150** | | **Total Non-executive** | **4,583** | | **Total Prescribed Officers** | **5,957** | - Executive directors have service agreements that include short-term incentive bonuses of up to **100%** of their annual remuneration package, contingent on achieving key performance indicators[444](index=444&type=chunk)[447](index=447&type=chunk)[448](index=448&type=chunk) [Board Practices](index=58&type=section&id=6C.%20BOARD%20PRACTICES) The board comprises two executive and six independent non-executive directors, with three key standing committees - The board consists of **two Executive Directors** and **six Non-Executive Directors**, all of whom are independent under NYSE and South African standards[452](index=452&type=chunk) - The board has **three standing committees** to oversee key governance areas: Remuneration and Nominations Committee, Audit and Risk Committee, and Social and Ethics Committee[466](index=466&type=chunk) [Employees](index=62&type=section&id=6D.%20EMPLOYEES) As of June 30, 2019, DRDGOLD had 2,617 employees, with wage agreements in place and one fatality reported - Total workforce as of June 30, 2019, was **2,617**, consisting of 1,026 direct employees and 1,591 contractors[484](index=484&type=chunk) - In September 2019, the Ergo operation signed a two-year wage agreement with unions for an average annual increase of **5.9%**[486](index=486&type=chunk) Safety Statistics (Per million man hours, FY 2019) | Metric | Consolidated 2019 (Per million man hours) | Consolidated 2018 (Per million man hours) | | :--- | :--- | :--- | | **Lost time injury frequency rate (LTIFR)** | 2.37 | 2.92 | | **Reportable incidence frequency rate (RIFR)** | 1.78 | 1.55 | | **Fatalities** | 1 | 0 | [Share Ownership](index=62&type=section&id=6E.%20SHARE%20OWNERSHIP) The company details its long-term incentive schemes, including a proposed new equity-settled plan for shareholder approval - The current DRDGOLD Phantom Share Scheme is a cash-settled plan with **16,157,058 phantom shares** outstanding as of June 30, 2019[494](index=494&type=chunk)[495](index=495&type=chunk) - A **new equity-settled Long-Term Incentive Scheme** is proposed to replace the current phantom share scheme, pending shareholder approval[497](index=497&type=chunk)[498](index=498&type=chunk) - The proposed new scheme will issue **Performance Shares** and **Retention Shares** that vest over three years, subject to performance conditions including Total Shareholder Return (TSR) relative to peers and the company's WACC[499](index=499&type=chunk)[501](index=501&type=chunk) [Major Shareholders and Related Party Transactions](index=66&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details DRDGOLD's ownership structure, with Sibanye-Stillwater as the largest shareholder at 38.05% [Major Shareholders](index=66&type=section&id=7A.%20MAJOR%20SHAREHOLDERS) Sibanye-Stillwater is the largest shareholder at 38.05%, with an option to increase its stake to 50.1% - Following the acquisition of FWGR assets, Sibanye-Stillwater became the largest shareholder, holding **265 million ordinary shares**, which constitutes **38.05%** of the company[512](index=512&type=chunk) - Sibanye-Stillwater was granted an option to subscribe for additional shares to achieve a **50.1%** shareholding, exercisable within two years from July 31, 2018[512](index=512&type=chunk) Major Shareholders (as of September 30, 2019) | Holder | Percent of outstanding ordinary shares | | :--- | :--- | | **Sibanye-Stillwater** | 38.05% | | **Ruffer, LLP** | 7.13% | | **Renaissance Technologies, LLC** | 1.80% | [The Offer and Listing](index=68&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) DRDGOLD's shares trade on the JSE and NYSE (ADSs), with each ADS representing ten ordinary shares - The company's ordinary shares trade on the **JSE (symbol: DRD)** and its ADSs trade on the **NYSE (symbol: DRD)**[529](index=529&type=chunk) - Each American Depositary Share (ADS) represents **ten ordinary shares**[529](index=529&type=chunk) [Additional Information](index=68&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers corporate governance, material contracts, exchange controls, and tax implications for shareholders [Memorandum of Incorporation](index=68&type=section&id=10B.%20MEMORANDUM%20OF%20INCORPORATION) The MOI outlines governance, director powers, re-election, shareholder meeting quorums, and amendment procedures - Directors have the authority to **borrow funds** for the company's purposes as they see fit[535](index=535&type=chunk) - **One-third** of the directors are subject to re-election by rotation at each annual general meeting[545](index=545&type=chunk) - The quorum for a general meeting is three members present in person or by proxy, holding at least **25%** of the total voting rights[548](index=548&type=chunk) [Material Contracts](index=72&type=section&id=10C.%20MATERIAL%20CONTRACTS) Key material contracts include the FWGR acquisition agreements with Sibanye-Stillwater and a ZAR300 million RCF with ABSA Bank - Agreements with Sibanye-Stillwater govern the acquisition of FWGR assets, in exchange for which DRDGOLD issued shares and granted Sibanye-Stillwater an option to acquire up to a **50.1%** stake in the company[563](index=563&type=chunk) - On August 1, 2018, the company entered into a **ZAR300 million Revolving Credit Facility** (RCF) with ABSA Bank to finance the FWGR Phase 1 development and working capital[564](index=564&type=chunk) - The RCF has financial covenants requiring an interest cover ratio of not less than **4 times** and a net debt to adjusted EBITDA ratio not exceeding **2 times**, calculated on a rolling 12-month basis[565](index=565&type=chunk) [Exchange Controls](index=74&type=section&id=10D.%20EXCHANGE%20CONTROLS) South African exchange controls restrict capital export but allow free remittance of share sale proceeds and dividends for non-residents - South African exchange control regulations **restrict the export of capital** and require SARB approval for South African companies to hold foreign currency or make significant foreign investments[570](index=570&type=chunk)[572](index=572&type=chunk) - For non-resident shareholders, proceeds from the sale of ordinary shares on the JSE are **freely remittable** outside the Common Monetary Area[578](index=578&type=chunk) - Dividends declared to non-resident shareholders are **freely remittable**, paid in rands and converted to dollars for ADS holders by the depositary[579](index=579&type=chunk)[580](index=580&type=chunk) [Taxation](index=76&type=section&id=10E.%20TAXATION) This section outlines South African and U.S. tax implications for shareholders, including dividend withholding tax and PFIC risk - South Africa imposes a **20%** dividend withholding tax. However, the U.S.-South Africa tax treaty can reduce this rate to **5%** for corporate holders with at least a 10% stake, and to **15%** for other U.S. residents[585](index=585&type=chunk) - The South African gold mining tax rate is calculated using the formula **Y = 34 – 170/X**, where X is the ratio of taxable income to mining income[587](index=587&type=chunk) - For U.S. holders, there is a risk that the company could be classified as a **Passive Foreign Investment Company (PFIC)**, which would result in adverse U.S. tax consequences[602](index=602&type=chunk)[607](index=607&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risks from gold price, foreign currency, interest rates, and credit, with gold price being most significant - The company's primary market risk is the fluctuation of the **rand gold price**, which significantly impacts operating results and share price[616](index=616&type=chunk) - While generally unhedged, the company entered into a **zero-cost collar for 50,000 ounces** of gold in fiscal 2019 to mitigate liquidity risk from borrowings for the FWGR project[615](index=615&type=chunk)[617](index=617&type=chunk) - Foreign currency risk is significant as gold is sold in **USD**, while production costs are primarily in **ZAR**[621](index=621&type=chunk) [Description of Securities Other Than Equity Securities](index=81&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section describes the company's ADSs, trading on NYSE, with each ADS representing ten ordinary shares ADS Depositary Service Fees | Service | Fee (USD) | | :--- | :--- | | **Issuance of ADSs** | $5.00 (or less) per 100 ADSs | | **Cancellation of ADSs** | $5.00 (or less) per 100 ADSs | | **Distribution of cash dividends** | 2 cents (or less) per ADS | - The Bank of New York Mellon, as Depositary, has agreed to an annual reimbursement of **$75,000** to DRDGOLD for investor relations activities[625](index=625&type=chunk) PART II [Controls and Procedures](index=82&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management and auditors concluded that disclosure controls and internal control over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2019[626](index=626&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of June 30, 2019[631](index=631&type=chunk) - The independent registered public accounting firm, KPMG Inc., audited and confirmed the **effectiveness** of the internal control over financial reporting as of June 30, 2019[632](index=632&type=chunk) [Governance and Management](index=83&type=section&id=ITEM%2016.%20GOVERNANCE%20AND%20MANAGEMENT) This section covers governance, audit committee expertise, accountant fees, and the company's share repurchase program - The board has identified Mr. J.A. Holtzhausen as the **audit committee financial expert**[635](index=635&type=chunk) Principal Accountant Fees (KPMG Inc.) | Fee Type | 2019 (R million) | 2018 (R million) | | :--- | :--- | :--- | | **Audit fees** | 8.3 | 5.7 | | **All other fees** | 1.0 | 1.7 | | **Total** | **9.3** | **7.4** | - A share repurchase program was established in May 2019, authorizing the company to buy back up to **5 million ordinary shares** before February 29, 2020[641](index=641&type=chunk)[642](index=642&type=chunk) PART III [Financial Statements](index=85&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the audited consolidated financial statements, including auditor's report and key financial notes - The independent auditor, KPMG Inc., issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 30, 2019[649](index=649&type=chunk) Consolidated Statement of Profit or Loss (FY 2017-2019) | Item (R million) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Revenue** | 2,762.1 | 2,490.4 | 2,339.9 | | **Cost of sales** | (2,553.9) | (2,347.7) | (2,307.9) | | **Results from operating activities** | 125.2 | 52.0 | (24.5) | | **Profit before tax** | 105.1 | 32.4 | (36.7) | | **Income tax** | (26.6) | (25.9) | 50.4 | | **Profit for the year** | **78.5** | **6.5** | **13.7** | Consolidated Statement of Financial Position (as of June 30) | Item (R million) | 2019 | 2018 | | :--- | :--- | :--- | | **Total Assets** | 4,060.0 | 2,360.4 | | Non-current assets | 3,403.9 | 1,734.1 | | Current assets | 656.1 | 626.3 | | **Total Equity and Liabilities** | 4,060.0 | 2,360.4 | | **Total Equity** | 2,688.6 | 1,267.3 | | **Total Liabilities** | 1,371.4 | 1,093.1 | Consolidated Statement of Cash Flows (FY 2017-2019) | Item (R million) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Net cash inflow from operating activities** | 288.3 | 233.8 | 51.6 | | **Net cash outflow from investing activities** | (303.0) | (140.4) | (96.7) | | **Net cash outflow from financing activities** | (7.9) | (45.0) | (53.0) | | **Net (decrease)/increase in cash** | (22.6) | 48.4 | (98.1) | [Exhibits](index=133&type=section&id=ITEM%2019.%20EXHIBITS) This section lists all exhibits filed with the Annual Report on Form 20-F, including corporate and material contracts - The exhibits include **key corporate documents**, **material contracts**, and **required certifications**[886](index=886&type=chunk)

Financial Data and Key Metrics Changes - Revenue for the year increased by 11% to ZAR 2.7 billion, with a significant contribution from Ergo operations [4][23] - Headline earnings showed positive results, reflecting both long-term outcomes and operational performance [6][22] - Operating profit decreased by 20% year-on-year but increased by 50% in the last six months [15] - Cash operating costs rose by 7% year-on-year, with a 4% increase in the last six months [14] Business Line Data and Key Metrics Changes - Ergo operations produced just under 5 tons of gold, with a yield of over 0.20 grams per ton [5][8] - Far West operations produced 140 kilos in the previous six months, focusing on reprocessing slime, with production stabilizing at 0.228 grams per ton [10][18] - The all-in sustaining cost margin increased from 5.5% to 9.1% year-on-year, aided by a decrease in rehabilitation obligations [20] Market Data and Key Metrics Changes - The gold price increased significantly, impacting revenue positively, with an average price of ZAR 150,000 to ZAR 160,000 per kilo [5][19] - The operating margin decreased slightly from 14.3% to 13.5% year-on-year, but increased to almost 18% in the last six months due to higher gold prices [19] Company Strategy and Development Direction - The company aims to leverage its relationship with Sibanye-Stillwater to explore new opportunities and enhance operational efficiency [61][64] - A focus on sustainable development is emphasized, with initiatives aimed at community engagement and environmental rehabilitation [40][44] - The company is exploring alternative energy solutions to mitigate risks associated with Eskom, including power storage and solar energy [72][73] Management's Comments on Operating Environment and Future Outlook - Management highlighted Eskom as a significant systemic risk for the industry and the economy, emphasizing the need for solutions [67][74] - The company is optimistic about future production levels returning to previous highs, addressing internal challenges that affected throughput [69][70] - There is a commitment to improving operational efficiency and reducing reliance on Eskom through innovative energy management strategies [72][73] Other Important Information - The company declared a dividend of ZAR 0.20 per share, marking the 12th consecutive year of dividend payments [39] - Free cash flow generated in the second half of the financial year was nearly ZAR 250 million, reflecting strong operational performance [21] Q&A Session Summary Question: What is the outlook for Ergo volume given the challenges faced? - Management acknowledged a drop in Ergo volume but indicated that it is not a new normal and that efforts are being made to restore it to previous levels [66][69] Question: What is the long-term solution for Eskom? - Management stated that Eskom remains a critical risk and that while complete replacement is not feasible, strategies are being developed to mitigate its impact through energy management and storage solutions [67][72]

DRDGOLD Ltd (NYSE:DRD) Q2 2019 Earnings Conference Call February 13, 2019 3:30 AM ET Company Participants Daniel Pretorius - CEO & Executive Director James Duncan - IR Adriaan Jacobus Davel - CFO & Executive Director Conference Call Participants Daniel Pretorius Good morning, everybody, and thank you very much for braving the elements, both natural and man-made, to get here this morning. You're all very special to us, and it's very good to have you here. Riaan and I will take you through this presentation a ...