DRDGold retains cash to pursue high-growth projects
DRDGold CFO Riaan Davel announces intentions to expand their Far West Gold Recoveries project.
On Wednesday, 12 February, DRDGold declared interim headline share earnings of 48 cents and a 25 cents per share interim dividend.
The company announced in a statement that it had retained the cash generated by its operations in order to expand the business and to pursue high-growth projects, which will require specific amounts of capital expenditure.
DRDGold received around R1.1 billion from its 50.1 percent stake in Sibanye-Stillwater. The company also had R543 million of its own cash as of end-December, of which around R210 million would be paid out as an interim dividend.
DRDGold CFO Riaan Davel said the company would still have around R1.4 billion cash following the payment of the dividend.
He said that the 50 percent being held back from the R406.6 million generated in free cash flow is needed to help fund the second phase of expanding its Far West Gold Recoveries (FWGR) project, which DRDGold acquired from Sibanye-Stillwater.
Riaan said the decision was made after the first phase of the project proved very profitable. The company spent R330.7 million on new capital infrastructure and the refurbishment of the project during phase 1 which, as a result, produced 333kg of gold during the 2019 financial year and which helped DRDGold realise a 6 percent increase in total gold production of 4,977kg during this period.