DRDGOLD: Commercial review and commercial update for the year ended June 30, 2022

DRDGOLD LIMITED

(Incorporated in the Republic of South Africa)

(Registration number: 1895/000926/06)

ISIN: ZAE000058723

JSE share code: DRD

NYSE ticker symbol: DRD

(“DRDGOLD“or the”Company“or the”Band“)

TRADING STATEMENT AND TRADING UPDATE FOR THE YEAR ENDED JUNE 30, 2022

DRDGOLD is in the process of finalizing its results for the year ended June 30, 2022 (“Current reporting periodDRDGOLD’s production forecast for the current base period was between 160,000 and 180,000 ounces of gold at a cash operating cost of R600,000/kg, with a planned capital investment of R600 million. For the current reporting period, DRDGOLD produced 183,902 ounces of gold at a cash operating cost of R600,875/kg, with a capital investment of R584.1 million.

Under paragraph 3.4(b) of the JSE’s Limited Listing Requirements, companies are required to issue a trading report as soon as they are satisfied with a reasonable degree of certainty that the financial results for the reporting period will differ by at least 20% from the financial results of the preceding corresponding period.

Consequently, the shareholders are informed that the Company has a reasonable certainty that it will declare:

  • earnings per share (“PES“) between 114.4 cents and 148.0 cents compared to 168.4 cents for the year ended June 30, 2021 (“Previous corresponding period“), i.e. a decrease of between 32% and 12%; and
  • overall earnings per share (“HEPS“) between 113.6 cents and 147.2 cents compared to 168.4 cents for the Previous Corresponding Period, i.e. a decrease of between 33% and 13%.

The expected decreases in EPS and HEPS for the current reference period compared to the previous corresponding period are mainly due to the movements of, among othersthe following elements:

1. Recipes

For reclamation operations owned and operated by DRDGOLD, being Ergo Mining Proprietary Limited (“ergonomics“) and Far West Gold Recoveries Proprietary Limited (“FWGR“), revenue decreased by R150.5 million, or 3%, to R5,118.5 million (2021: R5,269.0 million).

Ergo’s revenue decreased by R238.1 million, or 6%, to R3,704.9 million (2021: R3,943.0 million), mainly due to lower 3% in the price of gold in rand received and a 3% drop in gold sold. The decrease in gold sold results from a 4% decrease in volume throughput offset by a 1% increase in yield.

FWGR’s revenue increased by R87.6 million, or 7%, to R1,413.6 million (2021: R1,326.0 million), primarily due to a 9% increase in gold sold. The increase in gold sold is the result of an 8% increase in yield, despite a 1% drop in throughput.

2. Cash operating expenses

The impact of lower revenue on earnings and overall profit was also impacted by an increase in cash operating expenses of R391.1 million, or 13%, to R3,463.8 million (2021 : R3,072.7 million). Cost increases in both operations were primarily driven by above-inflation cost increases for key consumables, diesel, steel and cyanide.

At Ergo, cash operating costs increased by R343.3 million, or 13%, to reach R3,009.8 million (2021: R2,666.5 million).

At FWGR, cash operating costs increased by R47.8 million, or 12%, to reach R454.0 million (2021: R406.2 million).

3. Liquidity

As of June 30, 2022, DRDGOLD’s cash and cash equivalents amounted to R2,525.6 million (2021: R2,180.0 million), with a revolving credit facility with ABSA Bank Limited of R200 million rands, available if required. During the current reporting period, DRDGOLD generated free cash flow (cash inflows from operating activities less cash outflows from investing activities) of R871.6 million and paid dividends in cash of R513.3 million. The Group remains free of any bank debt as of June 30, 2022 (2021: Rnil).

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