Name of the Project
West Rand tailings retreatment project (WRTRP).

Location
Gauteng, South Africa.

Client
The project is currently the subject of a R13-billion deal with Sibanye-Stilwater and DRDGold. In November 2017, DRDGold and Sibanye-Stillwater announced the proposed transaction, in terms of which DRDGold would acquire portions of Sibanye-Stillwater’s WRTRP in exchange for about 38% of DRDGold’s ordinary share capital.

Project Description
If the transaction between Sibanye-Stilwater and DRDGold is finalised, the WRTRP will be rolled out in a phased approach.

The first phase, including early-stage production and design and planning over a 24-month period, will involve upgrading the Driefontein 2 and 3 plants to process tailings from the Driefontein 5 dump at a rate of between 40 000 t/m and 60 000 t/m, depositing the residue on the Driefontein 4 tailings dam.

Phase 2 envisages the construction of a high-volume central processing plant capable of processing at least one-million tonnes a month and the development of a new regional tailings storage facility.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
DRDGold estimates the net present value (NPV) of the entire WRTRP at R2.1-billion.

The estimated NPV of the alternative option is R2.7-billion, assuming a capital outlay of R397-million in addition to the initial Phase 1 capital outlay.

Value
Phase 1 will require a “modest” upfront capital investment of R288-million.

The cost of Phase 2 will depend on its size, lining requirements and the technology used, which could be between R400-million and R800-million.

The alternative option would require a capital outlay of about R397-million.

Duration
Phase 1 is targeted for commissioning within 12 months of implementation of the acquisition

Latest Developments
At the end of March,  DRDGold’s shareholders voted in favour of all resolutions relating to the company’s proposed acquisition of certain assets at diversified miner Sibanye-Stillwater’s WRTRP.

Sibanye in November 2017 agreed to vend selected WRTRP facilities into DRDGold in exchange for a 38% stake in DRDGold.

DRDGold will issue about 265-million new shares to Sibanye in return for the assets. Sibanye also has the option to subscribe for more shares in DRDGold to increase its holding to 50.1% within 24 months.

“This transaction is a step-change for DRDGold. We have doubled our reserves and secured infrastructure to access these quickly. After many years of consolidation, this is a major advance towards growing our company,” DRDGold CEO Niël Pretorius has said.

The transaction included passing a waiver of the obligation of Sibanye to make a mandatory offer to the remaining shareholders of DRDGold in terms of the provisions of Regulation 86 of the Companies Regulations Act. An application will be made to the Takeover Regulation Panel to obtain a ruling with regard to the waiver.

The implementation of the transaction remains subject to and conditional on, the requisite environmental authorisations and approvals to operate the selected WRTRP assets. It is expected that fulfilment of all outstanding conditions precedent to the transaction will occur during the second quarter of this year.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
R&A Strategic Communications, James Duncan, on behalf of DRDGold, tel +27 11 880 3924, fax +27 11 880 or email james@rasc.co.za.