Episode Details

Interview with Niël Pretorius, CEO, DRDGOLD Limited

Our previous interview: https://www.cruxinvestor.com/posts/drdgold-limited-nysedrd-leadership-transition-as-r8-billion-growth-plan-accelerates-8543

Recording date: 28th September 2026

DRDGOLD Limited (JSE:DRD, NYSE:DRD) offers investors a gold producer whose recent results show how powerfully a higher gold price can flow through a low-grade, high-volume business. In the year to 30 June 2026, production was essentially unchanged at 4,839kg, roughly 155,600 ounces. Throughput slipped 2% to 25.1 million tonnes. However, the average Rand gold price received rose 40%, and that drove revenue up 42% to R11.16 billion. Operating profit rose 83% to R6.45 billion, and headline earnings climbed 89% to R4.25 billion.

Cash generation was strong. Free cash flow rose 85% to R2.27 billion, and cash on hand more than doubled to R2.77 billion. The company declared a final dividend of 120 South African cents per share, extending its record to 19 consecutive years of dividends. CEO Niël Pretorius said the dividend was the company's largest yet and was paid without drawing on its funding facilities.

The strategic focus is Vision 2028, a R10 billion programme across five projects. At FWGR, throughput is set to rise from 500,000 to 1.2 million tonnes per month. The expanded DP2 plant's smelthouse and elution circuit were commissioned in July 2026, with the rest of the plant due by the end of Q1 FY2027. The Libanon reclamation site, targeted for April, will supply the extra feed. The 800-hectare RTSF was 67% complete at 30 June. It is designed for 2.4 million tonnes per month, twice the initial requirement.

At Ergo, the constraint is storage rather than plant capacity. The Daggafontein TSF began receiving tailings in July 2026 and adds 120 million tonnes of capacity. The larger Withok TSF still requires environmental and water use approvals, targeted by December 2026, with construction due to finish during 2029. Withok is important because Ergo's current deposition capacity diminishes significantly by 2030.

Management's growth targets are clear. FY2027 guidance is for 160,000 to 170,000 ounces at AISC of R1,230,000/kg, with R3 billion of planned capital investment. The longer-term aim is to approach 200,000 ounces per annum.

The most distinctive element is management's approach to margin. Pretorius explained that DRDGOLD now rates reclamation sites by margin at different gold price levels, not just unit cost. That allows the company to mine higher-cost material while prices support it.

Risks are material. Rising costs are one, with FY2027 AISC guidance about 14% higher than the FY2026 outcome. The business is also highly sensitive to recovery grade. Regulatory approvals for the RTSF and Withok remain outstanding, and the company is exposed to both the gold price and the Rand. Pretorius himself stressed that margins will eventually shrink. Further growth beyond FWGR's initial expansion will require acquiring tailings that DRDGOLD does not yet own, at a time when seller expectations are high.

Learn more: https://www.cruxinvestor.com/companies/drdgold-limited

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