Dual-listed DRDGold will markedly increase its investment in research and development (R&D) to maximise its current metallurgical processes and improve the overall recovery of gold, CEO Niël Pretorius said last week.

The surface gold tailings retreatment specialist planned to outsource the bulk of R&D activities to external laboratories to perform analyses on the most appropriate measures to boost recovery at its subsidiary Ergo’s Brakpan plant.

“We may have to think out of the box, as technology has changed so dramatically and on such a large scale over the past few years, that we don’t even know what can be done, be it with nanotechnology or laser-optic technology. The scope is wide open,” he said via webcast from London.

But the improved recovery strategy would need to be aligned with the ultravolume environment in which the midtier gold producer found itself.

“Going forward, we are going to be spending a lot more money on this,” he said.

Funding would be leveraged from anticipated improved margins in the current year, as the company planned to offload its Zimbabwe assets, as well as reduce its current capital spend of R340-million by some 50% in 2014 as its Ergo flotation and fine-grind development concluded.

DRDGold had “packaged and positioned” its Zimbabwe-based assets for sale after it had identified underground prospects, but not surface prospects, as it had hoped, and was currently assessing various expressions of interest.

Further, DRDGold had advanced into the commissioning phase of the new flotation and fine-grind circuit at its Brakpan plant, and was “cautiously optimistic” about the project’s ability to deliver into targeted operating and financial performance, having committed over R55-million to the project over the next six months.

All four mills had been installed, with water commissioning having started in February, the final pipework and electrical installation due to be completed in April and full production on track for the first quarter of next year.

“We believe this technology will significantly improve efficiencies at Ergo by integrating previously inert gold into the production cycle, and are keeping a very keen eye on delivering the technical design specifications,” commented Pretorius.

Meanwhile, the company planned to improve its value flow to shareholders, targeting longer-term fund-analyst-type shareholders to address existing register shortcomings, which it hoped would culminate in a shareholder mandate.

The company’s institutional shareholder base was currently languishing at some 50%.

DRDGold last week reported a 16% increase in gold revenue to R531-million for the quarter ended March 31, 2013, which drove a 17% jump in headline earnings per share to 14c for the period.

The improved revenue was on the back of a 3% year-on-year increase in gold production to 35 976 oz, as well as a higher average gold price of R474 482/kg received for the quarter.

After accounting for net operating costs of R360.3-million, operating profit was 5% higher at R170.7-million, notwithstanding a 3% increase in cash operating unit costs to $1 111/oz owing to increased volumes and yearly price increases.

Good production results were further bolstered by steady volume delivery to the plants, which saw a 3% year-on-year increase in throughput to about 5.77-million tons for the March quarter.