JOHANNESBURG (miningweekly.com) – The high gold price has increased liquidity and cash generated by DRDGOLD in the three months to the end of September, the first quarter of the 2026 financial year of this Johannesburg- and New York-listed surface gold mining company.

Benefiting from uplifted liquidity and cash position will be DRDGOLD’s extended capital expenditure (capex) programme for the 2026 financial year.

A first-quarter operating update on Thursday, October 16, reported a marginal 2% revenue increase to R2 254.9-million amid a sustained high gold price of R1 943 398/kg and a 16 kg increase in gold sold to 1 158 kg.

Despite a 3% decrease in throughput to 6 481 000 t, gold production rose by 2% to 1 191 kg, mainly the result of a 0.008 g/t improvement in yield to 0.184 g/t, DRDGROLD stated in a media release to Mining Weekly. 

Cash operating costs per kilogram of gold sold were also stable, increasing marginally by 3% to R955 086.

The rise was mainly driven by annual labour increases and higher reagent costs – mainly lime and cyanide – at DRDGOLD’s Ergo operation, east of Johannesburg on the East Rand, and mainly driven by annual labour increases at Far West Gold Recoveries, west of Johannesburg on the Far West Rand.

Electricity costs increased because of two months of winter tariffs, which Eskom charges between June and August each year, being included in the first quarter. One of DRDGOLD's major cost-saving measures has been the establishment of the large solar farm to supply cheaper renewable energy to Ergo.

Far West Gold Recoveries incurred additional machine hire costs relating to the clean-up of the Driefontein 5 reclamation site.

Cash operating costs per tonne increased by 8% to R179 owing to the same cost drivers and the decrease in throughput.

All-in sustaining costs (AISC) per kilogram were 5% higher at R1 066 287, despite a 58% decrease in sustaining capex to R51.5-million. 

In the final quarter of the 2025 financial year, AISC included a credit adjustment related to the change in rehabilitation estimate that is assessed annually. All-in costs per kilogram were 6% higher at R1 745 213 owing to a 9% rise in growth capex to R781.1-million, mainly relating to the Far West Gold Recoveries Phase II project, which includes the construction of the regional tailings storage facility (TSF) and DP2 Plant expansion.

Adjusted earnings before income tax, depreciation and amortisation were 1% higher at R1 092.1-million mainly owing to more gold sold and the higher gold price received. 

Cash and cash equivalents decreased by R257.1-million to R1 049.1-million from R1 306.2-million after paying the final cash dividend of R345.7-million for the 2025 financial year and capex (including prepayments towards capital items) of R751.8-million incurred during the quarter.

DRDGOLD remained debt free as at September 30.

As reported by Mining Weekly last month, DRDGOLD has outlined its plans to invest around R7.8-billion in its Big Five capital growth projects, two on the well-established East Rand and three on the fast-developing Far West Rand.

The R7.8-billion capital investment is a medium-term forecast for the key projects within the Vision 2028 strategy, extending life-of-mine by at least 20 years for both East Rand and West Rand operations.

Vision 2028 is working towards increasing throughput to three-million tons a month, boosting gold production to more than 200 000 oz/y, reducing the company’s environmental footprint and maximising social impact.

The plan now for Ergo on the East Rand is to expand the operation’s lifespan to beyond 2040 to process a resource base previously thought non-viable. Increasing deposition capacity, however, would be vital until this could be achieved, by resuming deposition on to the Daggafontein TSF by the first quarter of the 2027 financial year.

The throughput rate at Far West Gold Recoveries Phase 1 has, from inception, been determined by the capacity of its TSF, Driefontein 4 dam.

Phase 2 construction is now well under way, with the expansion of the current DP2 plant to double its current throughput capacity to 1.2-million tons, enabled by constructing the large new regional TSF.

The regional TSF, with a 30-year life, is designed for 800-million tons at an eventual deposition rate of 2.4-million tons a month for the life-of-mine. It will still be in construction when its lower section begins to be used from the southern side.

Commencement of deposition on to Daggafontein TSF is envisaged in the first quarter of DRDGOLD’s 2027 financial year.

Withok, which is directly south of the Brakpan tailings dam that is scheduled for closure, is designed to hold 310-million tons of material with a deposition rate of 1.3-million tons a month.

The 600 000-t capacity of Far West’s DP2 plant will be doubled to 1.2-million tons, which will be pumped to the regional TSF, close to the town of Fochville. Shown during the presentation was the proposed carbon-in-leach circuit. The 1.2-million tons of tailings will come from the Driefontein 3 and Lebanon tailings dams. The envisaged completion date for this is the first quarter of DRDGOLD’s 2027 financial year.