JOHANNESBURG (miningweekly.com) – JSE-listed DRDGold's Blyvooruitzicht gold mine was on track to emerge from judicial management by March, DRDGold CEO Niël Pretorius said on Thursday.

Pretorius told Mining Weekly Online in a video interview that the judicial management was serving its purpose of staving off hostile creditor action.

"There is more and more comfort among our suppliers that there is light at the end of the tunnel," Pretorius said.

The gold produced from underground at Blyvoor was trending upwards and had managed to reach the higher-grade areas.

"We've managed to get through 4 g/t and grade's still improving," he said.

When DRDGold placed Blyvoor under judicial management last year, the company said that it was necessary to protect the business during a temporary period of labour, seismic and hostile creditor setback in order to allow the mine to advance back into the higher-grade areas.

"We're still very much on track to have Blyvoor lifted from judicial management by March provided nothing untoward occurs," Pretorius said.

"There's more and more comfort among our suppliers that there is light at the end of tunnel and we are seeing a recovery back to the higher grades.

"Blyvoor needed a time-out to get back to the high-grade areas and to wait for the gold price also to recover and both of those are happening as we speak. So, yes, I think there's a very good prospect of Blyvoor coming out of judicial management within the time frames that we had set for us," Pretorius told Mining Weekly Online.

DRDGold CFO Craig Barnes told the results presentation that DRDGold has R162,8-million in cash and no long-term debt.

After Blyvoor went into judicial management in November, it also obtained an R80-million drawdown facility in a deal in which gold aspirant Aurora Empowerment Systems acquired 60% of Blyvoor.

The drawdown facility provided 
immediate relief and augmented Blyvoor's turnaround 
of a 116% increase in gold production and a 47% reduction in rand-per-kilogram cash costs in November and December.

Pretorius put the total value of DRDGold's recent round of corporate activity at R500-million, made up of Aurora's R376-million purchase of 60% of Blyvoor and R20-million for plant from DRDGold's East Rand Proprietary Mine. Aurora had paid R5-million in cash for the plant, which had since cleared, and DRDGold had an option to take a ten-year option over Aurora's Grootvlei and Marievale tailings dams totalling 114-million tons of material or to take the balance in cash.

"We'll take up the option of Marievale and Grootvlei dams if they turn out to be viable reclamation options for us, to feed into the Ergo circuit," he said.

The remaining corporate activity involved DRDGold buying for R82-million Mintails' remaining 50% interest in Ergo Mining in a transaction still subject to regulatory compliance.

So far, Aurora, headed by Zondwa Mandela, has paid R10-million deposit, which is being held in trust, pending the signing of definitive agreements, as well as a further R10-million in funding.

Pretorius said that DRDGold had had no need to draw down on Aurora's "rescue funding" in December and January, but that use would likely be made of this funding at the time of Blyvoor's move out of judicial management.