DRDGold’s margin focus pays off
Analysis of DRDGold’s results as earnings surge, and a look at Merchant West’s R5bn asset-backed note programme.
DRDGold, a Johannesburg-based mining company, has paid consistent dividends for 19 consecutive years while transforming the city's landscape and addressing the environmental impact of apartheid-era mining. CEO Niël Pretorius sees opportunities for the company to expand its model to mine dumps in other African and South American countries.
This would involve repurposing existing infrastructure and capital, rather than sinking new shafts and investing heavily. Pretorius explained that tailings from closed mines can be seen as "dead capital," with potential to generate wealth if repurposed. DRDGold aims to provide a service-provider/equity partnership for large mining companies with existing infrastructure and tailings, assuming a portion of the risk and generating a self-funded outcome.
The company's success in this venture could help sustain its dividend payments for the foreseeable future.
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