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UNITED STATES SECURITIES AND EXCHANGE COMMISSION |
WASHINGTON, D.C. 20549
FORM 20-F
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2024 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 0-28800
DRDGOLD LIMITED
(Exact name of Registrant as specified in its charter and translation of Registrant's name into English)
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REPUBLIC OF SOUTH AFRICA
(Jurisdiction of incorporation or organization)
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Constantia Office Park Cnr 14th Avenue and Hendrik Potgieter Road, Cycad House, Building 17, Ground Floor, Weltevreden Park, 1709, South Africa
(Address of principal executive offices)
Riaan Davel, Chief Financial Officer, Tel. no.+27 11 470 2600, Email riaan.davel@drdgold.com
Mpho Mashatola, Group Financial Manager Tel. no. +27 11 470 2600, Email mpho.mashatola@drdgold.com
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
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Securities registered or to be registered pursuant to Section 12(b) of the Act
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| Title of each class: |
Trading symbol |
Name of each exchange on which registered: |
American Depositary Shares, each representing ten ordinary shares |
DRD |
New York Stock Exchange |
Ordinary shares |
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New York Stock Exchange* |
* Not for trading, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act None
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. 864,588,711 ordinary shares of no par value outstanding as of June 30, 2024.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☑
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☑
Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing. U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☑ Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
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| TABLE OF CONTENTS |
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| PART I |
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| TABLE OF CONTENTS |
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| PART II |
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| PART III |
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Preparation of Financial Information
We are a South African company and currently all our operations are located in South Africa. Accordingly, our books of account are maintained in South African Rand. Our financial statements included in our corporate filings are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
Our consolidated financial statements included in this Annual Report are prepared in accordance with IFRS as issued by the IASB. All financial information in this Annual Report, except as otherwise noted is prepared in accordance with IFRS as issued by the IASB.
We present our financial information in rand, which is our presentation and reporting currency. All references to “dollars” or “$” herein are to United States Dollars and references to “rand” or “R” are to South African rands. Solely for your convenience, this Annual Report contains translations of certain rand amounts into dollars at specified rates. These rand amounts do not represent actual dollar amounts, nor could they necessarily have been converted into dollars at the rates indicated. Unless otherwise indicated, rand amounts have been translated into dollars at the rate of R18.19 per $1.00, the year end exchange rate on June 30, 2024.
In this Annual Report, we present certain non-IFRS financial measures including "Adjusted EBITDA", "cash operating costs", “cash operating costs per kilogram”, "all-in sustaining costs", “all-in sustaining costs per kilogram”, "all-in costs", “all-in costs per kilogram”, "growth capital expenditure" and "sustaining capital expenditure". The non-IFRS measures "cash operating costs", “cash operating costs per kilogram”, "all-in sustaining costs", “all-in sustaining costs per kilogram”, "all-in costs" and “all-in costs per kilogram” have been determined using industry guidelines promulgated by the World Gold Council, and are used to determine costs associated with producing gold, cash generating capacities of the mines and to monitor the performance of our mining operations. An investor should not consider these items in isolation or as alternatives to, operating costs, cash generated from operating activities, profit/(loss) for the year or any other measure of financial performance presented in accordance with IFRS or as an indicator of our performance. While the World Gold Council has provided definitions for the calculation of these measures, the calculation of cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram may vary significantly among gold mining companies, and these definitions by themselves do not necessarily provide a basis for comparison with other gold mining companies. See Glossary of Terms and Explanations and Item 5A. Operating Results – “Cash operating costs, all-in sustaining costs and all-in costs” and “Reconciliation of cash operating costs per kilogram, all-in sustaining costs per kilogram, all-in costs per kilogram”.
DRDGOLD Limited
When used in this Annual Report, the term the “Company” refers to DRDGOLD Limited and the terms “we,” “our,” “us” or “the Group” refer to the Company and its subsidiaries as appropriate in the context.
Special Note Regarding Forward-Looking Statements
This Annual Report contains certain “forward-looking” statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, regarding expected future events, circumstances, trends and expected future financial performance and information relating to us that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. Some of these forward-looking statements include phrases such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “should,” or “will continue,” or similar expressions or the negatives thereof or other variations on these expressions, or similar terminology, or discussions of strategy, plans or intentions, including statements in connection with, or relating to, among other things:
•our reserve calculations and underlying assumptions;
•the trend information discussed in Item 5D.- Trend Information, including target gold production and cash operating costs;
•life of mine and potential increase in life of mine;
•statements made in or with respect to the Technical Report Summaries (“TRS” or “TRSs”) including statements with respect to Mineral Reserves and Resources and assumptions, gold prices, projected revenue and cash flows and capital expenditures and other forward looking statements in the TRSs;
•estimated future throughput capacity and production;
•expected trends in our gold production as well as the demand for and the price of gold;
•our anticipated labor, electricity, water, crude oil and steel costs;
•our expectation that existing cash will be sufficient to fund our operations in the next 12 months including our anticipated commitments;
•estimated production costs, cash operating costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce;
•expectations on future gold price, supply and pricing trends, including long term trends, expected impact of the global environment on gold prices;
•expected gold production and cash operating costs expected in fiscal year 2025;
•statements with respect to agreements with unions;
•our prospects in litigation and disputes;
•statements with respect to the legal review for recommissioning the Withok Tailings Storage Facility (“Withok TSF”) to increase Ergo's deposition capacity and the construction of the Regional Tailings Storage Facility (“RTSF”), and expected potential increase in capacity and life of mine;
•statements with respect to the Solar Power Project (“Solar Plant”) being developed by Ergo, and the Flotation Fine Grind program ("FFG");
•expected deposition capacity from improvements in our dams and new tailings facility construction; and
•expected effective gold mining tax rate.
Such statements reflect our current views with respect to future events and are subject to risks, uncertainties and assumptions. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others:
•limited deposition capacity;
•adverse changes or uncertainties in general economic conditions in South Africa;
•the future of power security from South Africa's power utility and intensity of load shedding
•regulatory developments adverse to us or difficulties in maintaining necessary licenses or other governmental approvals;
•future performance relating to the Far West Gold Recoveries ("FWGR") Phase 2 assets and the reclamation sites on the east of Ergo’s plant;
•damage to tailings storage facilities and excessive maintenance and rehabilitation costs;
•a disruption in information technology systems, including incidents related to cyber security;
•changes in the demand for and the price of gold;
•changes in, or that affect, our business strategy;
•that assumptions underlying our Mineral Reserves and Mineral Resources as set forth in this report and our TRSs prove to be incorrect;
•challenges in replenishing mineral reserves;
•our ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions;
•the success of our business strategy, development activities and other initiatives;
•changes in technical and economic assumptions underlying our Mineral Reserve estimates;
•any major disruption in production at our key facilities;
•adverse changes in foreign exchange rates;
•adverse environmental or environmental regulatory changes;
•adverse changes in ore grades and recoveries, and to the quality or quantity of reserves;
•unforeseen technical production issues, industrial accidents and theft;
•anticipated or unanticipated capital expenditure on property, plant and equipment; and
•various other factors, including those set forth in Item 3D. Risk Factors.
For a discussion of such risks, see Item
3D. Risk Factors. The risk factors described above and in Item 3D. could affect our future results, causing these results to differ materially from those expressed in any forward-looking statements. These factors are not necessarily all of the important factors that could cause our results to differ materially from those expressed in any forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results.
Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events.
Special Note Regarding Websites
References in this document to information on websites (and/or social media sites) are included as an aid to their location and such information is not incorporated in, and does not form part of, this annual report. Any links to external, or third-party websites, are provided solely for convenience. We take no responsibility whatsoever for any third-party information contained in such third-party websites, and we specifically disclaim adoption or incorporation by reference of such information into this report and no websites are incorporated by reference into this report.
Imperial units of measure and metric equivalents
The table below sets forth units stated in this document, which are measured in Imperial and Metric.
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| Metric |
Imperial |
Imperial |
Metric |
| 1 metric tonne |
1.10229 short tons |
1 short ton |
0.9072 metric tonnes |
| 1 kilogram |
2.20458 pounds |
1 pound |
0.4536 kilograms |
| 1 gram |
0.03215 troy ounces |
1 troy ounce |
31.10353 grams |
| 1 kilometer |
0.62150 miles |
1 mile |
1.609 kilometers |
| 1 meter |
3.28084 feet |
1 foot |
0.3048 meters |
| 1 liter |
0.26420 gallons |
1 gallon |
3.785 liters |
| 1 hectare |
2.47097 acres |
1 acre |
0.4047 hectares |
| 1 centimeter |
0.39370 inches |
1 inch |
2.54 centimeters |
| 1 gram/tonne |
0.0292 ounces/ton |
1 ounce/ton |
34.28 grams/tonnes |
| 0 degree Celsius |
32 degrees Fahrenheit |
0 degrees Fahrenheit |
- 18 degrees Celsius |
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| Glossary of Terms and Explanations |
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| The table below sets forth a glossary of terms used in this Annual Report: |
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| Adjusted EBITDA |
Adjusted EBITDA means earnings before interest, tax, depreciation, amortisation, share-based payment (benefit)/expense, change in estimate of environmental rehabilitation recognised in profit or loss, gain/(loss) on disposal of property, plant and equipment, gain/(loss) on financial instruments, IFRS 16 lease payments, exploration expenses and transaction costs, and retrenchment costs. This is a non-IFRS financial measure and should not be considered a substitute measure of net income reported by us in accordance with IFRS. |
| Administration expenses and other costs excluding non-recurring items |
Administration expenses and other costs excluding loss on disposal of property, plant and equipment and transaction costs. |
| All-in sustaining costs |
All-in sustaining costs is a measure on which guidance is provided by the World Gold Council and includes cash operating costs of production, plus movement in gold in process on a sales basis, corporate administration expenses and other (costs)/income, the accretion of rehabilitation costs and sustaining capital expenditure. Costs other than those listed above are excluded. All-in sustaining costs per kilogram are calculated by dividing total all-in sustaining costs by kilograms of gold produced. This is a non‑IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS. |
| All-in costs |
All-in costs is a measure on which guidance is provided by the World Gold Council and includes all-in sustaining costs, retrenchment costs, care and maintenance costs, ongoing rehabilitation expenditure, growth capital expenditure and capital recoupments. Costs other than those listed above are excluded. All-in costs per kilogram are calculated by dividing total all-in costs by kilograms of gold produced. This is a non‑IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS. |
| Assaying |
The chemical testing process of rock samples to determine mineral content. |
Recommissioning of the Withok TSF |
The Withok Tailings Storage Facility design is the engineering design that ultimately brings the tailings storage facility to its finality in terms of extent, operation, rehabilitation and management. The implemented final design would result in alignments with the Global Industry Standard on Tailings Management (“GISTM”) and regulatory bodies, increase deposition capacity, improve operation/management and bring about the sustainable closure of the facility. |
| $/oz |
US dollar per ounce. |
| Called gold content |
The theoretical gold content of material processed. |
| Care and maintenance costs |
Costs to ensure that the Ore Reserves are open, serviceable and legally compliant after active mining activity at a shaft has ceased. |
| Cash operating costs |
Cash operating costs of production are operating costs less ongoing rehabilitation expenses, care and maintenance costs and net other operating costs/(income). This is a non‑IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS. |
| Cash operating costs per kilogram |
Cash operating costs are operating costs incurred directly in the production of gold and include labor costs, contractor and other related costs, inventory costs and electricity costs. Cash operating costs per kilogram are calculated by dividing cash operating costs by kilograms of gold produced. This is a non‑IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS. |
| Cut‑off grade |
The grade (i.e., the concentration of metal or mineral in rock) that distinguishes material deemed to have no economic value from material deemed to have economic value. |
| CIL Circuit |
Carbon-in-leach circuit. |
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Definitive Feasibility Study ("DFS") |
A definitive engineering estimate of all costs, revenues, equipment requirements and production at a -5% to +10% level of accuracy. The study is used to define the economic viability of a project and to support the search for project financing. |
| Depletion |
The decrease in the quantity of ore in a deposit or property resulting from extraction or production. |
| Deposition |
Deposition is the geological process by which material is added to a landform or land mass. Fluids such as wind and water, as well as sediment flowing via gravity, transport previously eroded sediment, which, at the loss of enough kinetic energy in the fluid, is deposited, building up layers of sediment. Deposition occurs when the forces responsible for sediment transportation are no longer sufficient to overcome the forces of particle weight and friction, creating a resistance to motion. |
| Dilution |
Waste or material below the cut-off grade that contaminates the ore during the course of mining operations and thereby reduces the average grade mined. |
| Doré |
Unrefined gold and silver bullion bars consisting of approximately 90% precious metals which will be further refined to almost pure metal. |
| Footwall |
The underlying side of a stope or ore body. |
| Grade |
The amount of gold contained within auriferous material generally expressed in ounces per ton or grams per tonne of ore. |
| Growth capital expenditure |
Capital additions that are not sustaining capital expenditure. This is a non‑IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS. |
| g/t |
Grams per tonne. |
| Indicated Mineral Resources |
That part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated Mineral Resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated Mineral Resource has a lower level of confidence than the level of confidence of a measured Mineral Resource, an indicated Mineral Resource may only be converted to a probable Mineral Reserve. |
| Inferred Mineral Resources |
That part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred Mineral Resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred Mineral Resource has the lowest level of geological confidence of all Mineral Resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred Mineral Resource may not be considered when assessing the economic viability of a mining project and may not be converted to a Mineral Reserve. |
| Measured Mineral Resources |
That part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured Mineral Resource is sufficient to allow a qualified person to apply modifying factors, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured Mineral Resource has a higher level of confidence than the level of confidence of either an indicated Mineral Resource or an inferred Mineral Resource, a measured Mineral Resource may be converted to a proven Mineral Reserve or to a probable Mineral Reserve. |
| Metallurgical plant |
A processing plant (mill) erected to treat ore and extract the contained gold. |
| Mineral Reserves |
An estimate of tonnage and grade or quality of indicated and measured Mineral Resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, the economically mineable part of a measured or indicated Mineral Resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. |
| Mineral Resources |
A concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Mineral Resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. |
| Mine call factor |
The gold content recovered expressed as a percentage of the called gold content. |
| Modifying factors |
The factors that a qualified person must apply to indicated and measured Mineral Resources and then evaluate in order to establish the economic viability of Mineral Reserves. A qualified person must apply and evaluate modifying factors to convert measured and indicated Mineral Resources to proven and probable Mineral Reserves. These factors include, but are not restricted to: Mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations, or agreements with local individuals or groups; and governmental factors. The number, type and specific characteristics of the modifying factors applied will necessarily be a function of and depend upon the mineral, mine, property, or project |
| Mt |
Million tonnes. |
| Ore |
A mixture of valuable and worthless materials from which the extraction of at least one mineral is technically and economically viable. |
| Other operating costs / (income) |
Expenses incurred, and income generated in the course of operating activities, which are not directly attributable to production activities. |
| Operating costs |
Operating costs are cost of sales less depreciation, change in estimate of rehabilitation provision, movement in gold in process and finished inventory – gold bullion, ongoing rehabilitation expenditure, care and maintenance, other operating income and retrenchment costs. |
| oz/t |
Ounces per ton. |
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Prefeasibility study ("PFS") |
A comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on the modifying factors and the evaluation of any other relevant factors which are sufficient for a competent person, acting reasonably, to determine if all or part of the Mineral Resource may be converted to a Mineral Reserve at the time of reporting. A prefeasibility study is at a lower confidence level than a feasibility study. |
| Proven Mineral Reserves |
The economically mineable part of a measured Mineral Resource and can only result from conversion of a measured Mineral Resource and can only result from conversion of a measured Mineral Resource. |
| Probable Mineral Reserves |
The economically mineable part of an indicated and in some cases, a measured Mineral Resource. |
| Qualified Person |
An individual who is a mineral industry professional with at least 5 years of relevant experience in the type of mineralization and type of deposit under consideration and in the specific type of activity that person is undertaking on behalf of the registrant, and an eligible member or licensee in a good standing of a recognized professional organization at the time the technical report is prepared. |
| Refining |
The final purification process of a metal or mineral. |
| Rehabilitation |
The process of restoring mined land to a condition approximating its original state. |
| Reserves |
That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. |
| Sediment |
The deposition of solid fragmental material that originated from weathering of rocks and was transported from a source to a site of deposition. |
| Slimes |
The tailings discharged from a processing plant after the valuable minerals have been recovered. |
| Sustaining capital expenditure |
Sustaining capital expenditure are those capital additions that are necessary to maintain current gold production. This is a non‑IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS. |
| T’000 |
Tonnes in thousands. |
| Tailings |
Finely ground rock from which valuable minerals have been extracted by milling, or any waste rock, slimes or residue derived from any mining operation or processing of any minerals. |
Tailings facility |
A dam created from waste material of processed ore after the economically recoverable gold has been extracted. |
| Tonnage/Tonne |
Quantities where the metric tonne is an appropriate unit of measure. Typically used to measure reserves of gold‑bearing material in‑situ or quantities of ore and waste material mined, transported or milled. |
| Tpm |
Tonne per month. |
| Yield |
The amount of recovered gold from production generally expressed in ounces or grams per ton or tonne of ore. |
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
3A. [Reserved]
3B. CAPITALIZATION AND INDEBTEDNESS
Not applicable.
3C. REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
3D. RISK FACTORS
In conducting our business, we face many risks that may interfere with our business objectives. Some of these risks relate to our operational processes, while others relate to our business environment. It is important to understand the nature of these risks and the impact they may have on our business, financial condition and operating results. Some of these risks are summarized below and have been organized into the following categories:
•Risks related to our business and operations;
•Risks related to the gold mining industry;
•Risks related to doing business in South Africa;
•Risks related to Environmental, Social and Governance (ESG) performance including climate change;
•Risks related to government regulation; and
•Risks related to ownership in our ordinary shares or American Depositary Shares (ADSs).
Risks related to our business and operations
Limited deposition capacity
Our operations are based on ultra-volume and almost nano-gold extraction. The volume of reclaimed material delivered has one of the most profound impacts on the gold output of our metallurgical plants. The large volumes of material that are processed at our operations are deposited on tailings facilities which have a finite capacity. The Brakpan/Withok TSF is a Category 3 dam, described as “Large” and carrying a Hazard Rating of “Significant”, which renders it subject to a strict safety monitoring and reporting regime and that imposes the obligation on the operator to periodically compile and submit independent Dam Safety Audit Reports. Whilst Ergo has not received any directive that restricts or inhibits its current and future deposition regime, the Brakpan/Withok TSF is a mature facility subject to a strict compliance regime, and it may attract more onerous conditions from the regulator. Additionally, Ergo plans to eventually move onto the adjacent Withok TSF, and has filed an application with Department of Water and Sanitation to have it recommissioned. Alternative facilities will be required to ensure adequate deposition capacity for the current life of mine and for the future. Key projects to increase such a deposition capacity include the development of the RTSF as part of Phase 2 FWGR project, as well as obtaining regulatory approvals for the recommissioning of the Withok TSF at Ergo to expand its deposition capacity. The timing to have the new facilities on line is critical as a delay may result in reduced deposition rates or a halt in deposition which will have an adverse financial impact on the business if interim alternative deposition facilities cannot be obtained.
Our large projects, most notably the development of FWGR Phase 2 to expand our operations to the western side of Johannesburg and the Solar Plant and recommissioning of Withok TSF to enable mining on the east of the Ergo plant, are subject to schedule delays and cost overruns, and we may face constraints in financing our existing projects or new business opportunities, which could render our projects unviable or less profitable than planned.
The development of our projects are capital intensive processes carried out over long durations and requires us to commit significant capital expenditure and allocate considerable management resources in utilizing our existing experience and know-how.
Projects like the development of Phase 2 of the FWGR assets acquired from Sibanye-Stillwater, the Solar Plant and the recommissioning of the Withok TSF are subject to the risk of delays, regulatory approvals and cost overruns which are inherent in any large construction project including, inter alia:
• unforeseen increases in the cost of equipment, labor and raw materials;
• delays or disruptions in the supply of equipment and raw materials
• unforeseen design and engineering problems;
• changes in construction plans that may require new or amended planning permissions;
• unforeseen construction problems;
• unforeseen delays commissioning sections of the project;
• inadequate phasing of activities;
• labor disputes and social challenges;
• security issues
• inadequate workforce planning or productivity of workforce;
• inadequate management practices;
• natural disasters and adverse weather conditions;
• failure or delay of third-party service providers; and
• changes to regulations, such as environmental regulations.
We also face the risk that expected benefits of our projects are not achieved.
The construction of the RTSF commenced towards the end of fiscal year 2024 and the early works for Driefontein Plant 2 ("DP2") expansion commenced during the first quarter of fiscal year 2025, both related to Phase 2. A delay in the construction of the RTSF may result in deposition capacity to be reduced as the Driefontein 4 TSF is expected to reach capacity at the end of fiscal year 2026 at the current deposition rate, where after the deposition rate would have to decrease materially. A delay in the DP2 expansion project may result in the under utilisation of the RTSF resulting in lower returns being generated.
Ergo is currently developing a Solar Power Project to reduce its reliance on Eskom and to reduce its future cost of electricity. The Solar Plant definitive feasibility study was completed during fiscal year 2022 and is currently under development. A significant capital investment was needed for the project and the purchase of imported solar panels and battery energy storage system subject to fluctuations in the USD and euros to the rand exchange rate. The solar panels are all installed and have been progressively started to generate and supply power towards the end of current fiscal year. It is estimated that the full benefit from the project, in reduced electricity costs and reduced carbon footprint, will materialise during the second quarter of fiscal year 2025.
Regulatory approvals for the recommissioning of the Withok TSF are yet to be obtained. The implementation of the design is expected to be crucial to sustain and increase the life of mine of Ergo as it will accommodate material toward the east of the Ergo plant.
In addition, if the assumptions we make in assessing the viability of our projects, including those relating to commodity prices, exchange rates, interest rates, inflation rates and discount rates, prove to be incorrect or need to be significantly revised, this may adversely affect the profitability or even the viability of our projects. The uncertainty and volatility in the gold market makes it more difficult to accurately evaluate the project economics and increases the risk that the assumptions underlying our assessment of the viability of the project may prove incorrect.
As the development of FWGR, the Solar Power Project and the recommissioning of the Withok TSF are particularly material to DRDGOLD, significant cost overruns or adverse changes in assumptions affecting the viability of these projects could have a material adverse effect on our business, cash flows, financial condition and prospects.
Our operating cash flow, available banking facilities and ability to raise funds from banks or the capital markets may be insufficient to meet our capital expenditure plans and requirements, depending on the timing and cost of development of our existing projects and any further projects we may pursue. As a result, new sources of capital may be needed to meet the funding requirements of these projects and to fund ongoing business activities. Our ability to raise and service significant new sources of capital will be a function of, inter alia, macroeconomic conditions, rising cost of debt, our credit rating, our gearing and other risk metrics, the condition of the financial markets, future gold prices, the prospects for our industry, our operational performance and operating cash flow and debt position. Inability to raise these funds may place a burden on the Group cash reserves.
In the event of operating or financial challenges, any dislocation in financial markets or new funding limitations, our ability to pursue new business opportunities, invest in existing and new projects, fund our ongoing business activities and pay dividends, could be constrained, any of which could have a material adverse effect on our business, operating results, cash flows and financial condition.
Damage to tailings storage facilities and excessive maintenance and rehabilitation costs could result in lower production and health, safety and environmental liabilities.
Our tailings storage facilities are exposed to numerous risks and events, the occurrence of which may result in the failure, breach or damage of such a facility. These may include sabotage, piping or seepage failures, failure by our employees to adhere to the codes of practice and natural disasters such as excessive rainfall and seismic events, any of which could force us to stop or limit operations. This is further impacted and expected to intensify with the effects of climate change. In addition, the facilities could overflow or a side wall could collapse jeopardizing the health and safety of our employees and communities living around these facilities and potentially resulting in extensive property and environmental damage.
In the event of damage to, or any failure of, our tailings facilities, we could face legal proceedings (including criminal proceedings and public civil actions) and investigations for significant amounts of damages. Such actions would also likely entail significant costs and potentially involve the need for large expenditures to help regions and people affected to recover. The occurrence of any of these risks could adversely affect our operations and this in turn could have a material adverse effect on our business, operating results and financial condition.
The potential elimination of conventional wet tailings could also lead to large additional expenditures on research and development of new technologies. Changes in law and regulation, to impose more stringent standards, may also lead to increased capital expenditure to update our facilities, be able to expand our facilities in the future or continue to meet existing or more stringent legal (including permit) requirements.
Due to the nature of our business, our operations face extensive health and safety risks and regulation of those risks.
Gold mining is exposed to numerous risks and events, the occurrence of which may result in the death of, or personal injury, to employees or others. These risks and events include seismic events, heat, ground or slope failures, rock bursts, sink holes, fires, falls of ground and blockages, flooding, discharges of gases and toxic substances as well as radioactivity, unplanned detonation of explosives, blasting and the transport, storage and handling of hazardous materials.
According to section 54 of the Mine, Health and Safety Act of 1996, if an inspector believes that any occurrence, practice or condition at a mine endangers or may endanger the health or safety of any person at the mine, the inspector may give any instruction necessary to protect the health or safety of persons at the mine. These instructions could include the suspension of operations at the whole or part of the mine. Health and safety incidents could lead to mine operations being halted and that will increase our unit production costs, which could have a material adverse effect on our business, operating results and financial condition.
As with environmental incidents, so too may the occurrence of health and safety risks result in increased regulator and stakeholder scrutiny, which may lead to increases in compliance costs, and could result in enforcement actions and litigation (by regulators, affected stakeholders and others) that could lead to the imposition of significant fines or liabilities or otherwise adversely impact our operations through revocation of permits and approvals, the imposition of new conditions, and reputational impacts. The occurrence of such risks could have a material adverse effect on our business, operating results and financial condition.
After five years of operating without a fatality, we very sadly lost a colleague at Ergo due to fatal injuries sustained on April 13, 2024 when a side-wall slip at the 5L27 dump impacted the loader he was operating. On behalf of the board of directors and management of DRDGOLD, we extend our deepest sympathies to the family and friends of our deceased colleague.
A disruption in our information technology systems, including incidents related to cyber security, could adversely affect our business operations.
We rely on the accuracy, availability and security of our information technology systems. Despite the measures that we have implemented, including those related to cyber security, our systems could be breached or damaged by computer viruses and systems attacks, natural or man-made incidents, disasters or unauthorised physical or electronic access.
Any system failure, accident or security breach could result in business disruption, theft of our intellectual property, trade secrets (including our proprietary technology), unauthorised access to, or disclosure of, personnel or supplier information, corruption of our data or of our systems, reputational damage or litigation. We may also be required to incur significant cost to protect against or repair the damage caused by these disruptions or security breaches in the future, including, for example, rebuilding internal systems, implementing additional threat protection measures, defending against litigation, responding to regulatory inquiries or actions, paying damages, or taking other remedial steps with respect to third parties. (Refer to Item 16K. ‘‘Cyber Security")
These threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures and we remain subject to additional known or unknown threats. In some instances, we may be unaware of an incident or its magnitude and effects. We may be susceptible to cyber-attacks, including phishing and ransomware attacks, in the evolving landscape of cybersecurity threats. Cyber security attacks have recently become more prevalent in the mining industry, which has increased the likelihood of DRDGOLD being targeted for cyber security attacks in the future. An extended failure of critical system components, caused by accidental, or malicious actions, including those resulting from a cyber security attack, could result in a significant environmental incident, commercial loss or interruption to operations as well as loss or misappropriation of confidential information, including personal data relating to DRDGOLD's current or former employees. Such information could also be made public in a manner that harms DRDGOLD’s reputation and financial results and, particularly in the case of personal data, could lead to regulators imposing significant fines on DRDGOLD.
In addition, from time to time, we implement updates to our information technology systems and software, which can disrupt or shutdown our information technology systems. Information technology system disruptions, if not appropriately addressed or mitigated, could have a material adverse effect on our operations.
Any interruption in gold production at any of our two mining operations generating cash flows, will have an adverse effect on the Company.
We have two mining operations generating cash flows, namely Ergo and FWGR. Ergo’s reclamation sites, processing plants, pump stations and the Brakpan/Withok TSF are linked through pipeline infrastructure. The Ergo plant is currently our major processing plant. FWGR’s reclamation sites, DP2 processing plant, pump stations and the Driefontein 4 Tailings Storage Facility are linked through pipeline infrastructure.
Our reclamation sites, plants, pipelines infrastructure and the tailings storage facilities are exposed to numerous risks, including operational down time due to planned or unplanned maintenance and possible load shedding or power dips, adverse weather, destruction of infrastructure, spillages, higher than expected operating costs, or lower than expected production as a result of decreases in extraction efficiencies due to imbalances in the metallurgical process as well as inconsistent volume throughput or other factors.
Our FWGR operations are reliant on the use and access to Sibanye-Stillwater Limited’s ("Sibanye-Stillwater") mining infrastructure, related services including the smelting and recovery of gold from gold loaded carbon produced at FWGR (FWGR has the option to transfer gold loaded carbon to Ergo's Knights plant as an alternative to Sibanye-Stillwater) as well as the use of various rights, permits and licenses held by Sibanye Gold Proprietary Limited (wholly owned subsidiary of Sibanye-Stillwater) pursuant to which FWGR operates, pending the transfer to FWGR of those that are transferable. Any disruption in the supply of, or our ability to use and access the Sibanye-Stillwater mining infrastructure, related services and rights, permits and licenses, could have an adverse impact on our operations.
Any of the risks above or other interruptions could adversely impact our operations which could have a material adverse effect on our business, operating results and financial condition.
Changes in the market price for gold and exchange rate fluctuations, both of which have fluctuated widely in the past, affect the profitability of our operations and the cash flows generated by those operations.
Our results are significantly impacted by the price of gold and the USD-rand exchange rate. Any sustained decline in the market price of gold from the current levels would adversely affect us, and any sustained decline in the price of gold below the cost of production could result in the closure of some or all of our operations which would result in significant costs and expenditure, such as, incurring retrenchment costs earlier than expected which could lead to a decline in profits, or losses, as well as impairment losses. In addition, as most of our production costs are in rands, while gold is sold in dollars and then converted to rands, our results of operation and financial condition have been and could be in the future materially affected by an appreciation in the value of the rand. Accordingly, any sustained decline in the dollar price of gold and/or the strengthening of the South African rand against the dollar would negatively and adversely affect our business, operating results and financial condition.
As US inflation started to recover there was uncertainty whether the US Federal Reserve would halt interest rate hikes and the collapsing of Silicon Valley Bank meant that gold remained a safe haven for investors which kept the gold price high in fiscal year 2023. During fiscal year 2024 the recovery of the US inflation continued. With inflation starting to decrease, the US Federal Reserve lowered interest rates by 50 basis points during September 2024 and further decreases are expected over fiscal year 2025. The uncertainty around the lowering of interest rates and the extent of the lowering, meant that the gold price remained high, this was further fueled by the conflict between Israel and Gaza. In addition, we are impacted by movements in the exchange rate of the rand against the dollar as described below.
Exchange rates are influenced by global economic trends. The closing exchange rate of the rand against the dollar at June 30, 2024 strengthened by 3% compared to June 30, 2023. The closing price of the rand against the dollar at June 30, 2023 weakened by 16% compared to June 30, 2022. At September 30, 2024, the rand traded at R17.26 = $1.00 (based on closing rates), representing a 5% strengthening of the rand against the dollar from June 30, 2024 as the rand remained strong as a result of quantitative easing and lowering the interest rates by the US Federal Reserve and Eskom Holdings SOC Limited (“Eskom”) providing stable electricity to the grid during the first quarter of fiscal year 2025 (load shedding has been suspended since March 2024, but can be reinstated at any given time). The rand/dollar exchange rate was volatile throughout the fiscal year 2024 mainly as a result of the uncertainty around the National and Provincial elections in South Africa and the subsequent formation of the Government of National Unity ("GNU"), emerging markets and South Africa's economic uncertainty, including uncertainties resulting from the global economic slowdown sentiment, uncertainty around the lowering of interest rates, geopolitical tensions between Israel and Gaza, perceived political and economic instability, structurally weak economic growth of the South African economy exacerbated by load shedding by power utility Eskom up to March 2024 as it battles with supply and maintenance of the power generation units.
A decrease in the dollar gold price and/or a strengthening of the rand against the dollar results in a decrease in our profitability. If the rand was to appreciate against the dollar or the gold price were to decrease for a continued time, our operations could experience a reduction in cash flow and profitability, and this would adversely affect our business, operating results and financial condition.
We typically do not enter into forward contracts to reduce our exposure to market fluctuations in the dollar gold price or the exchange rate movements of the rand. Gold is sold at a dollar gold price and spot exchange rate specified in a contract with the South African bullion banks to deliver the gold at a specified settlement date. If the dollar gold price should fall and/or the rand should strengthen against the dollar, this would adversely affect us, and we may experience losses, and if these changes result in revenue below our cost of production and remain at such levels for any sustained period, we may be forced to curtail or suspend some or all our operations.
A failure to acquire new Mineral Reserves could negatively affect our future cash flows, results of operations and financial condition.
New or ongoing exploration programs may be delayed or may not result in new mineral producing operations that will sustain or increase our Mineral Reserves. A failure to acquire new Mineral Reserves in sufficient quantities and quality to maintain or grow the current level and quality of our reserves will negatively affect our future cash flow, results of operations and financial condition. In addition, if we are unable to identify Mineral Reserves that have reasonable prospects for economic extraction while maintaining sufficient controls on production and other costs, this will have a material effect on the future viability of our operations.
If we are not successful in increasing reserves in future years, our reserves could decrease, and such reduction would adversely affect our business, operating results and financial condition.
We may be unable to make desirable acquisitions or to integrate successfully any businesses we acquire, including the development of Phase 2 of the FWGR assets acquired from Sibanye-Stillwater.
Our future success may depend in part on the acquisition of businesses or technologies intended to complement, enhance or expand our current business or products or that might otherwise offer us growth opportunities. Our ability to complete such transactions may be hindered by a number of factors, including identifying acquisition targets, obtaining necessary financing and potential difficulties in obtaining government approvals. Any acquisitions we make, could fail to achieve our financial or strategic objectives or disrupt our ongoing business which could adversely impact our results of operations.
Any acquisition that we do make would pose risks related to the integration of the new business or technology with our business and organization. We cannot be certain that we will be able to achieve the benefits we expect from a particular acquisition or investment. Acquisitions may also strain our managerial and operational resources, as the challenge of managing new operations may divert our management from day-to-day operations of our existing business. Furthermore, we may have difficulty integrating employees, business systems, and technology. The controls, processes and procedures of acquired businesses may also not adequately ensure compliance with laws and regulations and we may fail to identify compliance issues or liabilities. Our business, financial condition and results of operations may be materially and adversely affected if we fail to coordinate our resources effectively to manage both our existing operations and any businesses we acquire. Acquisitions can also result in unforeseen liabilities.
Moreover, our resources are limited and our decision to pursue a transaction has opportunity costs; accordingly, if we pursue a particular transaction, we may need to forgo the prospect of entering into other transactions that could help us achieve our financial or strategic objectives.
We may not be able to meet our cash requirements because of a number of factors, many of which are beyond our control.
Management’s estimates on future cash flows are subject to risks and uncertainties, such as the rand gold price, production volumes, recovered grades and costs. Management is estimating a significant capital investment in major projects in the next few years. If we are unable to meet our cash requirements out of cash flows generated from our operations, we would need to fund our cash requirements from financing sources and any such financing may not be permitted under the terms of our financing arrangements or may not be possible on attractive terms or at all due to rising interest rates, or may not be available on acceptable terms, or at all. If we do not generate sufficient cash flows or have access to adequate financing, our ability to respond to changing business and economic conditions, make future acquisitions, react to adverse operating results, meet our debt service obligations and fund required capital expenditures or meet our working capital requirements may be adversely affected.
Flooding at our discontinued underground operations may cause us to incur liabilities for environmental damage.
If the rate of rise of water is not controlled, water from our discontinued underground mining areas and active tailings storage facilities ("TSFs") could potentially rise and come into contact with naturally occurring underground water or decant into surrounding underground mining areas, active TSFs and could ultimately also rise to surface. Progressive flooding of these abandoned underground mining areas and surrounding underground mining areas could eventually cause the discharge of polluted water to the surface and to local water sources.
This may lead us to face claims and liabilities relating to environmental damage and liabilities for breaches, or alleged breaches, of applicable laws (see also Our operations are subject to extensive environmental regulations which could impose significant costs and liabilities). Any such claims may have a material adverse effect on our business, operating results and financial condition.
An increase in production costs could have an adverse effect on our results of operations.
An increase in our production costs will impact our results of operations. Production costs are affected by, inter alia:
• rising global and national inflation;
• labor stability, productivity and increases in labor costs;
• increases in reagents and nature of material reclaimed;
• increases in electricity and water prices;
• increases in crude oil and steel prices;
• increases in security measures to protect our employees and infrastructure;
• changes in regulation;
• unforeseen changes in ore grades and recoveries;
• unexpected changes in the quality or quantity of reserves;
• technical production issues;
• availability and cost of smelting and refining arrangements;
• environmental and industrial accidents;
• gold theft;
• shortages or availability of materials used in production;
• environmental factors; and
• pollution.
Our production costs consist mainly of materials including reagents and steel, labor, electricity, specialized service providers, machine hire, security, water, fuels, lubricants and other oil and petroleum-based products. Production costs have in the past, and could in the future, increase at rates in excess of our annual inflation rate and impact our results of operation and can result in the restructuring of these operations at substantial cost.
A three-year wage agreement was reached with organized labor at FWGR in November 2021. FWGR is in the process of reaching a new wage agreement and is aiming to conclude on this in the second quarter of fiscal year 2025. Ergo reached a three-year wage agreement with organized labor effective from 1 July 2022.
Increases in production costs, if material, will adversely impact our results of operations. In addition, any initiatives that we pursue to reduce costs, such as reducing our reliance on Eskom’s grid through self-generation of power, for example through the Solar Power Project at Ergo, reducing our labor force, a reduction of the corporate overhead, negotiating lower price increases for consumables and cost controls may not be successful or sufficient to offset the increases affecting our operations and could adversely affect our business, operating results and financial condition.
Our operations are subject to extensive environmental regulations which could impose significant costs and liabilities.
Our operations are subject to increasingly extensive laws and regulations governing the protection of the environment under various state, provincial and local laws, which regulate air and water quality, hazardous waste management and environmental rehabilitation and reclamation. Our mining and related activities have the potential to impact the environment, including land, habitat, streams and environment near the mining sites. More complex and stringent regulations may lead us to face increased regulatory and stakeholder scrutiny, which may increase capital expenditures. Failure to comply with environmental laws or delays in obtaining, or failures to obtain government permits and approvals, or the imposition of additional permit/approval conditions may adversely impact our operations and may open us to enforcement actions and potential litigation. In addition, the regulatory environment in which we operate could change in ways that could substantially increase costs of compliance, resulting in a material adverse effect on our profitability.
We have incurred, and expect to incur in the future, expenditures to comply with these environmental laws and regulations. We have estimated our aggregate group Provision for Environmental Rehabilitation at a net present value of R616.8 million which is included in our statement of financial position as at June 30, 2024 (Refer to Item 18. ‘‘Financial Statements - Note 11 – Provision for environmental rehabilitation”). However, the ultimate amount of rehabilitation costs may in the future exceed the current estimates due to factors beyond our control, such as changing legislation, higher than expected cost increases, or unidentified rehabilitation costs. The Group provides for future obligations to rehabilitate by using funds held in insurance products. If any of our operations are prematurely closed, the rehabilitation funds may be insufficient to meet all the rehabilitation obligations of those operations. The closure of mining operations, without sufficient financial provision for the funding of rehabilitation liabilities, or unacceptable damage to the environment, including pollution or environmental degradation, may expose us and our directors to prosecution, litigation and potentially significant liabilities.
In addition to compliance with local laws and regulations, our operations are also increasingly subject to stakeholder expectations concerning the application of international environmental (and health and safety and social) standards. These include the Responsible Gold Mining Principles, IFC Performance Standards, World Gold Council guidelines and World Bank guidelines. The application of these standards similarly increases the costs of compliance, while the failure to adhere to such standards can result in reputational damage and adversely affect our operations.
Regulators are increasingly focusing on enforcement of these applicable laws (including permitting requirements). Enforcement activities may cause our operations to cease or to be suspended and may require us to undertake corrective measures that require additional capital expenditure. We have also been, and may in the future be, subject to litigation and other costs as well as actions by authorities, affected stakeholders, non-governmental organisations and public bodies relating to environmental matters. These claims and actions can result in significant liabilities, penalties and fines which can adversely affect our business, operating results, and financial condition.
Uncertainties regarding supply chain
The global inflationary pressures as well as geopolitical volatility may negatively impact availability and cost of critical material and equipment. This may be further exacerbated by the increase in the frequency and severity of natural disasters such as severe weather, floods and earthquakes which may further increase this risk. The risk of dependency on key suppliers requires ongoing focus and proactive management. A sustained unavailability and increased cost of critical material such as reagents and critical equipment may require DRDGOLD to find acceptable substitute suppliers and may also require it to pay higher prices for such materials, potentially affect production and increase operating costs resulting in loss of revenue. New projects may also be adversely affected by delays in supplies, freight costs and higher than inflationary increases for capital equipment which may affect operations and production, and ultimately result in failure to deliver into the business plans.
Events may occur for which we are not insured which could affect our cash flows and profitability.
Because of the nature of our business, we may become subject to liability for pollution or other hazards against which we are unable to insure or are not insured, including those in respect of past mining activities. Our existing property, business interruption and other insurance contains certain exclusions and limitations on coverage. The insured value for property and loss of profits due to business interruption is R20.0 billion, with a total loss limit of R2.2 billion for Ergo and R900 million for FWGR for fiscal year 2025. Business interruption is only covered from the time the loss occurs with a maximum indemnity period of 12 months and is subject to time and amount deductibles that vary between categories. To cover legal liability to third parties for damage, injury, illness or death, a total of R1 billion insurance cover is in place for the 2025 fiscal year, subject to certain exclusions and limitations on coverage.
Insurance coverage may not cover the extent of claims brought against us, including claims for environmental, industrial or pollution related accidents or damages or interruption due to electricity supply failure / interruptions, for which coverage is not available. If we are required to meet the costs of claims, which exceed our insurance coverage, this could have a material adverse effect on our business, operating results and financial condition.
If we are unable to attract and retain key personnel our business may be harmed.
The success of our business will depend, in large part, upon the skills and efforts of a small group of management and technical personnel including the positions of Chief Executive Officer and Chief Financial Officer. The loss of any of our key personnel could delay the execution of our business plans, which may result in decreased production, increased costs and decreased profitability. For example, the Ergo Financial Director retired during fiscal year 2024, and while there was sufficient succession planning in place, there is no guarantee that future departures will not disrupt the business. In addition, we compete with mining and other companies on a global basis to attract and retain key human resources at all levels with appropriate technical skills and operating and managerial experience necessary to operate the business. Factors critical to retaining our present staff and attracting additional highly qualified personnel include our ability to provide these individuals with competitive compensation arrangements, and other benefits. If we are not successful in retaining or attracting highly qualified individuals in key management positions, our business may be harmed. We do not maintain “key man” life insurance policies on any members of our executive team. Any of the foregoing may have a material adverse effect on our business, operating results and financial condition.
We are subject to operational risks associated with our flotation and fine-grind (FFG) project.
Our flotation and fine-grind project, implemented in fiscal year 2014, is designed to improve extraction efficiencies.
Certain components of the FFG were temporarily halted in the first quarter of fiscal year 2020 to perform an evaluation and compare the additional revenues earned from additional gold extracted from the most recently integrated reclamation sites compared to the cost incurred to operate the FFG circuit. The remaining components of the FFG continue to operate. Testing on the newly integrated material has suggested that some of these halted components will only operate in subsequent years once the related reclamation sites have been brought online in accordance with the current life of mine plan for ERGO. These halted components are classified as idle assets until they are brought back into operation as described. The success of the FFG is directly dependent on the material type and material mix processed through it. Therefore, the halted components will remain idle pending the continuation and conclusion of various test work regarding the material type and material mix of future reclamation sites. Firm decisions have also not yet been made by the executive committee and the Board of Directors on the future of the FFG. We remain subject to operations risks relating to the FFG project.
Risks related to the gold mining industry
A change in the dollar price of gold, which in the past has fluctuated widely, is beyond our control.
Historically, the gold price has fluctuated widely and is affected by numerous industry factors over which we have no control including:
• a significant amount of above-ground gold in the world that is used for trading by investors;
• the physical supply of gold from world-wide production and scrap sales, and the purchase, sale or divestment by central banks of their gold holdings;
• the demand for gold for investment purposes, industrial and commercial use, and in the manufacturing of jewelry;
• speculative trading activities in gold;
• the overall level of forward sales by other gold producers;
• the overall level and cost of production of other gold producers;
• international or regional political and economic events or trends;
• the strength of the dollar (the currency in which gold prices generally are quoted) and of other currencies;
• financial market expectations regarding the rate of inflation;
• interest rates;
• gold hedging and de-hedging by gold producers; and
• actual or expected gold sales by central banks and the International Monetary Fund.
During fiscal year 2024 the gold price reached a high of U$2,450 per ounce and a low of U$1,810. We benefited from a sustained high gold price due to slower than expected global economic recovery and growth, economic uncertainty and geopolitical tensions.
Investors globally, as they have in so many previous times of crisis, turned to gold and the rand/dollar exchange rate was volatile throughout the fiscal year 2024 mainly as a result of the uncertainty around the National and Provincial elections in South Africa and the subsequent formation of the GNU, emerging markets and South Africa's economic uncertainty, including uncertainties resulting from the global economic slowdown sentiment, uncertainty around the lowering of interest rates, geopolitical tensions between Israel and Gaza, perceived political and economic instability, structurally weak economic growth of the South African economy exacerbated by load shedding by power utility Eskom up to March 2024 as it battles with supply and maintenance of the power generation units.
The factors mentioned above indicate the various factors that causes the volatility in the price of gold or the rand/dollar exchange rate in the future. Our profitability may be negatively impacted by a decline in the gold price as we incur losses when revenue from gold sales drops below the cost of production for an extended period.
The exploration of mineral properties is highly speculative in nature, involves substantial expenditures, and is frequently unproductive.
Exploration is highly speculative in nature and requires substantial expenditure for drilling, sampling and analysis of ore bodies to quantify the extent of the gold reserve. Many gold exploration programs, including some of ours, do not result in the discovery of mineralization and any mineralization discovered may not be of sufficient quantity or quality to be mined profitably. If we discover a viable deposit, it usually takes several years from the initial phases of exploration until production is possible. During this time, the economic feasibility of production may change.
Moreover, we rely on the evaluations of professional geologists, geophysicists, and engineers for estimates in determining whether to commence or continue mining. These estimates generally rely on scientific and economic assumptions, which in some instances may not be correct, and could result in the expenditure of substantial amounts of money on a deposit before it can be determined with any degree of accuracy whether the deposit contains economically recoverable mineralization. Uncertainties as to the metallurgical recovery of any gold discovered may not warrant mining based on available technology.
Our future growth and profitability will depend, in part, on our ability to identify and acquire additional mineral rights and gold reserves, and on the costs and results of our continued exploration and development programs. Our business focuses mainly on the extraction of gold from tailings, which is a volume driven exercise. Only significant deposits within proximity of services and infrastructure that contain adequate gold content to justify the significant capital investment associated with plant, reclamation and deposition infrastructure are suitable for exploitation in terms of our model. There is a limited supply of these deposits which may inhibit exploration and developments, especially in a declining gold price environment that may occur in future.
Because of these uncertainties, we may not successfully acquire additional mineral rights, or identify new Proven and Probable Mineral Reserves in sufficient quantities to justify commercial operations in any of our operations. The costs incurred on exploration activities that do not identify commercially exploitable reserves of gold are not likely to be recovered and therefore are likely to be impaired.
There is inherent uncertainty in Mineral Reserves and Mineral Resources estimates.
Our Mineral Reserve and Mineral Resources figures described in this document are the best estimates of our current management as of the dates stated and are reported in accordance with the requirements of the SEC’s Regulation S-K (Subpart 1300). These estimates may not reflect actual Mineral Reserves and Mineral Resources or future production.
Should we encounter mineralization or formations different from those predicted by past drilling, sampling and similar examinations, reserve estimates may have to be adjusted and mining plans may have to be altered in a way that might ultimately cause our reserve estimates to decline. Moreover, if the rand price of gold declines, or stabilizes at a price that is lower than recent levels, or those assumed in our mining plans, or if our labor, specialized services providers, water, steel, electricity and other production costs increase or recovery rates decrease, it may become uneconomical to recover Mineral Reserves and Mineral Resources, particularly those containing relatively lower grades of mineralization. Under these circumstances, we would be required to re-evaluate our Mineral Reserves and Mineral Resources. Short-term operating factors relating to the ability to reclaim our Mineral Reserves, at the required rate, such as an interruption or reduction in the supply of electricity, limited deposition capacity or a shortage of water may have the effect that we are unable to achieve critical mass, which may render the recovery of Mineral Reserve, or parts of the Mineral Reserve no longer feasible, which could negatively affect production rate and costs and decrease our profitability during any given period. Estimates of Mineral Reserves and Mineral Resources are based on drilling results and because unforeseen conditions may occur in these mine dumps that may not have been identified by the drilling results, the actual results may vary from the initial estimates. These factors have in the past and could in the future result in reductions in our Mineral Reserves and Mineral Resources estimates and as a result, our production, which could in turn adversely impact the total value of our mining asset base and our business, operating results and financial condition.
Gold mining is susceptible to numerous events that could have an adverse impact on a gold mining business.
The business of gold mining is exposed to numerous risks and events, the occurrence of which may result in the death of or personal injury to employees, the loss of mining and reclamation equipment, damage to or destruction of mineral properties or production facilities, monetary losses, delays in production, environmental damage, loss of the license to mine and potential legal claims. The risks and events associated with the business of gold mining include:
•environmental hazards and pollution, including dust generation, toxic chemicals, discharge of metals, pollutants, radioactive materials and other hazardous material into the air and water;
•flooding, landslides, sinkhole formation, ground subsidence, ground and surface water pollution and waterway contamination;
•a decrease in labor productivity due to labor disruptions, work stoppages, disease, slowdowns or labor strikes;
•unexpected decline of ore grade;
•metallurgical conditions or lower than expected gold recovery;
•failure of unproven or evolving technologies;
•mechanical failure or breakdowns and ageing infrastructure;
•energy and electrical power supply interruptions;
•availability of water;
•injuries to employees or fatalities due to falls from heights and accidents relating to mobile machinery or electrocution or other causes;
•activities of illegal or artisanal miners;
•material and equipment availability;
•legal and regulatory restrictions and changes to such restrictions;
•social or community disputes or interventions;
•accidents caused from the collapse of tailings facilities;
•pipeline failures and spillages;
•safety-related stoppages; and
•corruption, fraud and theft including gold bullion theft.
The occurrence of any of these hazards could delay production, result in losses, or increase production costs or decrease earnings and may result in significant legal claims and adversely impact our business results of operations and financial condition.
Risks related to doing business in South Africa
Political or economic instability in South Africa may reduce our production and profitability.
We are incorporated in South Africa and all our operations are currently in South Africa. Large parts of our operations are situated in urban areas where most of the communities that live near our facilities are in the grip of poverty and experience socio-economic stress. As a result, political and economic risks relating to South Africa which have been escalated over the last few years, could have a significant effect on our production and profitability. Large parts of the South African population are unemployed and do not have access to adequate education, health care, housing and other services, including water and electricity. Government policies aimed at alleviating and redressing the disadvantages suffered by most citizens under previous governments may increase our costs and reduce our profitability. Crime levels in recent years in South Africa have increased which expose the business to increase in frequency and severity of security issues that may disrupt business operations. These problems may impede fixed inward investment into South Africa and increase emigration of skilled workers and as a result, we may have difficulties retaining qualified employees.
The sustained high unemployment rate of 33.5%, for 2024, rising inequality and increased lawlessness has increased the risk of social unrest, such as protests and conflict, in our surrounding communities. Continuous lack of service delivery, political instability and slow reformative action being taken by all spheres of the South African government, specifically, in combating unemployment particularly in the youth of the country adds to a sense of frustration that may increase the potential of violent strikes that could cause damage to property, harm to people and disrupt operations. This frustration was a contributing factor that led to social unrest, people committing crimes, vandalisation and theft of property, and damaging infrastructure during fiscal year 2024 which was a contributing factor to delays in commissioning new reclamation sites. A prolonged economic downturn could result in an extended period of high unemployment, further exacerbating anti-mining sentiments in South Africa. Poor service delivery by local government has caused communities to shift expectations to the private sector to provide essential services and for increased support and assistance. Poverty and high levels of unemployment have lead to demands to participate in, and benefit from, the economic activities of our business. Failure to recognise these could result in miscommunication, misaligned expectations and loss of trust that in turn could threaten our social license to operate.
The GNU was formed post the outcome of the national elections which has been received positively by both local and international financial markets however, it is still new and its stability, sustainability and ability to fix the systematic economic, political and societal issues in South Africa (Crime, low education quality, unemployment particularly amongst youth, gender based violence, water and electricity shortage, decaying infrastructure etc.) and create sustainable term economic growth over a long period remains untested. If the GNU is not successful there would be adverse consequences.
Furthermore, the rise of Environmental, Social, and Governance ("ESG") factors, such as electricity usage, social unrest, social license to operate, climate change, water usage and environmental stewardship, in investment decisions may result in divestment in the mining sector.
Inflation can adversely affect us.
The inflation rate in South Africa is relatively high compared to developed, industrialized countries, although many countries around the world are currently facing inflation challenges. As of June 30, 2024, the annual Consumer Price Inflation Index (“CPI”), stood at 5.1% compared to 5.4% in June 2023 and 7.4% in June 2022. Annual CPI was 3.8% as at September 30, 2024. Inflation in South Africa generally results in an increase in our rand operational costs. Higher and sustained inflation in the future, with a consequent increase in operational costs could have a material adverse effect on our results of operations and our financial condition and could result in operations being discontinued or reduced or rationalized, which could reduce our profitability.
South African mining specific inflation was 8.6% for calendar year 2023 (calendar year 2022: 13.8% and calendar year 2021: 8.1%) which is higher than general CPI. This is confirmed as DRDGOLD's cash cost increased by 13.7% in fiscal year 2024 (fiscal year 2023: 6.5% and fiscal year 2022: 12.7%) noting that this is impacted by tonnages processed. Higher and sustained inflation in the future, with a consequent increase in operational costs could have a material adverse effect on our results of operations and our financial condition and could result in operations being discontinued or reduced or rationalized, which could reduce our profitability.
The treatment of occupational health diseases and the potential liabilities related to occupational health diseases may have an adverse effect on the results of our operations and our financial condition.
We may be subject to claims relating to occupational health diseases and we are currently subject to legal action described below.
In January 2013, DRDGOLD, East Rand Proprietary Mines Limited (“DRDGOLD Respondents”) and 23 other mining companies (“Other Respondents”) (collectively referred to as “Respondents”) were served with a court application issued in the High Court of South Africa for a class certification on behalf of former mineworkers and dependents of deceased mineworkers (“Applicants”). In the application the Applicants allege that the Respondents conducted underground mining operations in a negligent and complicit manner causing the former mineworkers to contract occupational lung diseases. The Applicants have as yet not quantified the amounts which they are demanding from the Respondents in damages.
On May 3, 2018, the Applicants and Anglo American South Africa Limited, AngloGold Ashanti Limited, Sibanye Gold Proprietary Limited trading as Sibanye-Stillwater, Harmony Gold Mining Company Limited, Gold Fields Limited, African Rainbow Minerals Limited and certain of their affiliates (“Settling Companies”) settled the class certification application in which the Applicants in each sought to certify class actions against gold mining houses cited therein on behalf of mineworkers who had worked for any of the particular respondents and who suffer from any occupational lung disease, including silicosis or tuberculosis.
The DRDGOLD Respondents, are not a party to the settlement between the Applicants and Settling Companies. The dispute, insofar as the class certification application and appeal thereof is concerned, still stands and has not terminated in light of the settlement agreement (refer to Item 18. “Financial Statements - Note 26 – Contingencies”).
An adverse judgment in the claim described above or any other claim could have an adverse impact on our financial condition and operating results and could result in increased regulatory and stakeholder scrutiny which could lead to increased compliance costs.
We have experienced an increase in organised crime activities which have started to target gold plants.
In October 2019, a number of companies, including our Knights and Ergo plants, were subject to armed attacks targeting the gold in the plants or high-grade gold bearing material. These incidents were very well organised and in all the incidents the thieves were armed. In some of the incidents employees of companies were also held hostage until the targeted material was obtained. In the 2019 incident, a security officer was fatally injured.
Any such incidents have and may still result in losses of gold or other damage which could have a material adverse impact on our business, financial results or condition.
Theft at our sites, particularly of copper and pipelines, may result in greater risks to employees or interruptions in production.
Crime statistics in South Africa indicate an increase in theft. This together with price increases for copper and steel has resulted in theft of copper cables and pipelines. Our operations experience high incidents of copper cable theft and pipelines despite the implementation of enhanced security measures which have increased our security spend. At times, the incidences have resulted in serious injuries of our security personnel. In addition to the general risk to employees’ lives in an area where theft occurs, we may suffer production losses and incur additional costs as a result of power interruptions caused by cable theft and theft of bolts used for the pipeline.
Power stoppages or shortages or increases in the cost of power could negatively affect our results and financial condition.
Our mining operations are currently dependent on electrical power supplied by Eskom, South Africa’s state-owned utility company. Electricity makes up approximately 14% of our operating costs. Eskom has become incapable of satisfying the energy requirements of the South African economy and applied a system of power rationing or load shedding to prevent a complete collapse of the national electricity grid. Load shedding was suspended during March 2024, but can be reinstated at any given time. It is a distressed enterprise unlikely to make a full recovery. It is owed billions of rands by local municipalities and in more recent times has also fallen victim to damage to its supply grid through incessant cable theft. This poses a threat to our ability to maintain the requisite volume throughput to deliver into our business plan, while the steps we are required to take to curtail load during load shedding, like intermittently switching off our mills, also impact recovery efficiencies. The private sector has responded by accelerating private production of renewable power. Government's own measures are lagging though, and it has been slow to administer the freeing up of power generation on a larger scale. Although load shedding remained suspended at June 30, 2024, load shedding will be with us for the foreseeable future if the required maintenance and renewing of the Eskom power generation fleet does not take place, which comes at a significant cost to the end user of Eskom electricity. Eskom and the government has introduced a number of initiatives to over the past two years to reduce load shedding, being:
•The introduction of the energy plan by the president of South Africa;
•The introduction and appointment of an Electricity Minister;
•Eskom launched a two year generational operational recovery plan to increase power generation and supply;
•Change in the leadership of Eskom;
•R254 billion debt relief from National Treasury
•Decrease in electricity demand from Eskom over the years due to renewable energy alternative from residents, business and large electricity consumers such as miners.
•As part of unbundling of Eskom, Eskom announced the appointment of the National Transmission Company of SA board in January 2024, a step toward operationalising the company who will be focused on managing the national grid which is independent of Eskom’s generation and distribution functions.
•Additional tax incentives for companies and households to build or implement their own renewable electricity sources to assist in lowering the demand from Eskom.
All these initiatives have improved load shedding in South Africa with load shedding suspended since March 2024. However the future of Eskom remains precarious due to the following major risks which if materialise may have an adverse impact on their viability.
National Energy Regulator of South Africa (“NERSA”) approved Eskom annual tariff increases of 12.74% effective 1 April 2024, significantly above the South African CPI. During September 2024 Eskom submitted its proposed increases of 36.15% from April 1, 2025, 11.81% from April 1, 2026 and 9.1% from April 1, 2027, for NERSA's consideration. Eskom tariff increases have increased the cost of mining and should the proposed increases be awarded, would have adverse effect on profitability.
The security of future power supply as well as the cost thereof remains a risk and may have major implications for our operations, which may result in significant production losses.
In 2019, the President of South Africa announced the vertical unbundling of Eskom to improve efficiencies and have an independent grid operator and open competition for energy generation at lower cost to the consumer. While full state ownership will be maintained, the unbundling is expected to result in the separation of Eskom’s generation, transmission and distribution functions into separate entities, which may require legislative and/or policy reform. The unbundling is still ongoing; however during March 2024 NERSA approved the Eskom’s request to transfer its control over independent power producers ("IPPs") to the National Transmission Company of South Africa ("NTCSA"). The NTCSA will be Eskom’s transmission subsidiary under the unbundling process that will split Eskom into generation, transmission and distribution entities. Any IPP will be able to engage with the NTSCA to supply electricity via the Eskom grid to Eskom, thus reducing the risk of future load shedding. Poor reliability of the supply of electricity and instability in prices through the unbundling process is expected to continue. Eskom’s coal fired power plants have not performed well for a number of years, with national rotational power cuts (load shedding) having been implemented intermittently through the last number of fiscal years. Should we experience further power tariff increases, our business operating results and financial condition may be adversely impacted.
Ergo is currently finalising the construction and commissioning of a Solar Power Project to reduce its reliance on Eskom and to reduce its future cost of electricity but we face risks in the development of this project as such the project may not reduce our dependence on Eskom as designed.
Ergo is also currently disputing the electricity tariff charged by Ekurhuleni Metropolitan Municipality. Over the past several years, the municipality has charged Ergo for the electricity it draws from the Ergo Central Substation. However, Ergo determined that only Eskom may legitimately charge for the drawn and consumed electricity. Ergo has instituted legal proceedings by way of an application and since then, the municipality has issued two summonses. Ergo has made payments under protest and without prejudice or admission of liability. The outcome of Ergo's application remains uncertain and may result in adverse impacts on the business, operating results and financial condition.
Risks related to ESG performance including climate change
Increased scrutiny and expectation by stakeholders including governments, Non-government organisations (“NGOs”), shareholders, investors, communities and other parties of interest regarding our ESG performance and practices as well as increased reporting requirements, may expose us to additional costs. ESG related risks we are exposed to includes climate change physical and transition risks, compliance to environmental legislation and practices, water availability and efficient use thereof, energy efficiencies and decarbonization, pollution and inappropriate waste management practices, compromised safety and occupational well being, compromised employee health and mental wellness, failure to manage diversity and inclusion, raising community expectations and concerns, complexity of legal and regulatory compliance, supply chain risks, tailings management risks etc. Failure to manage these as well as to achieve the ESG performance targets set may negatively impact the business and lead to reduced investor confidence and reputational challenges.
Physical risks including extreme weather
As a result of climate change, our operations are exposed to severe weather events that have in the past and could in the future interrupt production and our supply chain. Major property, infrastructure and/or environmental damage as well as loss of human life could be caused by extreme weather events such as droughts, heatwaves, extreme rainfall and high wind volumes which are all on the increase in terms of frequency, duration and intensity. Specifically, we have experienced an increase in intensity of events, such as thunderstorms on the Highveld, where our operations are situated. It is believed that the long-term upward trend in global temperature is directly correlated with the increase in global severe weather events both in terms of magnitude and frequency.
For example, dry weather conditions have prompted level 1 water restrictions on residential water users in the Johannesburg area. These water restrictions remain in place as at September 30, 2024. In the cases where municipal water is used, these restrictions can result in reclamation sites not being able to transfer material to the processing plants and also the processing plants not being able to operate at full capacity. Severe thunderstorms and high winds, especially during the summer rainy season, may also cause damage to operation infrastructure that may in turn cause an interruption in the production of gold. Such incidents and other weather events may damage the facility and may result in water shortages which can impact our operations and cause the interruption of deposition and gold production until the facility is repaired or alternative deposition is brought online.
The occurrence of these risks and events may result in adverse impacts to our workforce, production interruptions, increased operational costs associated with mitigation, measures and power and supply chain disruptions, project delays and increased production pricing. All of this may result in adverse impacts on our business, operating results and financial condition.
Scarcity of water may exacerbate the risk of climate change and may negatively affect our operations.
South Africa is a relatively dry area and predictions are that dry conditions will escalate. South Africa faces water shortages, which may lead to the revision of water usage strategies by several sectors in the South African economy, including electricity generation and municipalities. This may result in rationing or increased water costs. Such changes would adversely impact our surface retreatment operations, which use water to transport the slimes or sand from reclaimed areas to the processing plant and to the tailings facilities. In addition, as our gold plants and piping infrastructure were designed to carry certain minimum throughputs, any reductions in the volumes of available water may require us to adjust production at these operations.
DRDGOLD invested R22 million in the construction of a filtration plant at the Rondebult Waste Water Works (operated by the East Rand Water Care Company) to treat sewage water to reduce the use of potable water. This water is used both to reclaim and carry production materials and also, ultimately, to irrigate rehabilitation vegetation at a significantly lower cost than that of potable water. The plant was commissioned in early fiscal year 2016 and has design capacity to provide Ergo with 10 Mega Litres (“Ml”) a day from the Rondebult sewage treatment facility. However, due to the deterioration of the local government authorities’ infrastructure, the expected quantity of sewerage is not reaching the treatment facility and as a result Ergo is still not able to extract the full design capacity of 10 Ml of water a day. It is not certain if and when the flow of sewerage will reach expected levels.
These measures may not be sufficient to alleviate the water scarcity issues we face.
Failure to adapt or transition to climate change measures
The company is also exposed to a growing number of critical drivers of change and expectations. This include new national and international regulations, increased public concerns as well as pressure from lobby groups, regulators and investors for Companies to address and report on the impact of climate change risks in a meaningful manner.
The need to adapt or transition in response to climate change, including complying with new regulations and responding to increased stakeholder expectations, could result in increased compliance and operating costs as well as having other business impacts on production costs and capacity. Failure to adopt measures in the face of transition risks may also negatively impact the business and could lead to reduced investor confidence.
Risks related to government regulation
Government policies in South Africa may adversely impact our operations and profits.
The mining industry in South Africa is extensively regulated through legislation and regulations issued through the government’s administrative bodies. These involve directives in respect of health and safety, water usage, the mining and exploration of minerals and managing the impact of mining operations on the environment. A variety of permits, regulatory approvals and authorities are required to mine lawfully, and the government enforces its regulations through the various government departments. Lack of communication between government and regulators as well as ineffective regulators remains an issue that may increase the cost of compliance and obtaining permits. The formulation or implementation of government policies may be discretionary and unpredictable on certain issues, including changes in conditions for the issuance of licenses insofar as social and labor plans are concerned, transformation of the workplace, laws relating to mineral rights, ownership of mining assets and the rights to prospect and mine, additional taxes on the mining industry and in extreme cases, nationalization. A change in regulatory or government policies could adversely affect our business and may also result in increased project costs and potential delays.
Mining royalties and other tax reform could have an adverse effect on the business, operating results and financial condition of our operations.
The Mineral and Petroleum Resources Royalty Act, No.28 of 2008 and the Mineral and Petroleum Resources Royalty Act (Administration), No.29 of 2008 govern royalty rates for gold mining in South Africa. These acts provide for the payment of a royalty, calculated through a royalty rate formula (using rates of between 0.5% and 5.0%) applied against gross revenue per year, payable half yearly with a third and final payment thereafter. The royalty is tax deductible and the cost after tax amounts to a rate of between 0.33% and 3.3% at the prevailing marginal tax rates applicable to the taxed entity. The royalty is payable on old unconverted mining rights and new converted mining rights. Based on a legal opinion the Company obtained, mine dumps created before the enactment of the Mineral and Petroleum Resources Development Act (“MPRDA”) fall outside the ambit of this royalty and consequently the Company does not pay any royalty on any dumps created prior to the MPRDA. Introduction of further revenue based royalties or any adverse future tax reforms could have an adverse effect on our business, operating results and financial condition.
Failure to comply with the requirements of the Broad Based Socio-Economic Empowerment Charter 2018 could have an adverse effect on our business, operating results and financial condition of our operations.
On September 27, 2018, the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (“Mining Charter 2018”) was published in Government Gazette No. 41934 of Government Notice No. 639 on September 27, 2018. Mining Charter 2018 requires, inter alia, an enduring 30% Black Economic Empowerment ("BEE") interest in respect of new mining rights. It also has extensive provisions in respect of Historically Disadvantaged Persons (“HDP”) representation at board and management, as well as provisions relating to local procurement of goods and services. The procurement target of the total spend on services from South African companies has been pegged at 80% (up from 70% in Mining Charter III) and 60% of the aggregate spend thereof must be apportioned to BEE entrepreneurs.
In March 2019, the Mineral Council of South Africa brought an application in the High Court, Pretoria for a judicial review and setting aside of certain provisions in Mining Charter 2018.
On September 21, 2021, the High Court of South Africa ruled that the Mining Charter 2018 is not binding subordinate legislation but an instrument of policy. This ruling affirmed that the Minister of Mineral Resources and Energy (“MRE Minister”) was not entitled to make law through the Mining Charter 2018 to require 30% HDP ownership for the renewal of existing mining rights. The DMRE Minister confirmed that they will not appeal the ruling.
DRDGOLD cannot guarantee that it will meet all the targets set out by the Mining Charter 2018. For example, if the Mining Charter 2018 were to remain in its current form, there is no assurance that the goods, services and supplies in South Africa would be sufficient to allow us to meet the targets. More specifically, DRDGOLD may not be able to meet the requirement that 80% of total mining goods and services procurement spend be on South African-manufactured goods due to an insufficient number of suppliers in South Africa with heavy equipment. DRDGOLD may be required to increase participation by HDP in senior positions and allocate additional resources for the development of the mine community, human resources, sustainability, procurement and enterprise. DRDGOLD may also be required to make further adjustment to the ownership structure of its South African mining assets, including increasing the ownership of HDP, in order to meet the Mining Charter 2018 requirements. Any such additional measures could have a material adverse effect on our business, operating results and/or financial condition.
In addition, if we are unable to obtain sufficient representation of HDP at the board level and in management positions or if there are not sufficient succession plans in place, this could have a material adverse effect on our business (including resulting in the imposition of fines and having a negative effect on production levels), operating results and financial position. In relation to this, the mining industry, including DRDGOLD, continues to experience a global shortage of qualified senior management and technically skilled employees. DRDGOLD may be unable to hire or retain appropriate senior management, technically skilled employees or other management personnel, or may have to pay higher levels of remuneration than it currently intends in order to do so.
Also, there is no guarantee that any steps DRDGOLD has already taken or might take in the future will ensure the retention of its existing mining rights, the successful renewal of its existing mining rights, the granting of applications for new mining rights or that the terms of renewals of its mining rights would not be significantly less favourable than the terms of its current mining rights. Any further adjustment to the ownership structure of DRDGOLD’s South African mining assets in order to meet the above mentioned requirements could have a material adverse effect on the value of DRDGOLD’s securities
Refer to Item 4B. Business Overview – Governmental regulations and their effect on our business – The Broad Based Socio-Economic Empowerment Charter.
Government policies in South Africa may adversely impact our operations and profits related to financial provisioning for rehabilitation.
Revised Financial Provisioning Regulations (“FPR”) were published on November 20, 2015, under the National Environmental Management Act, 107 of 1998 (“NEMA”) and became effective from the date of publication thereof. Proposed amendments to the FPRs were published for public comment GNR 1228 GG 41236 of November 10, 2017 (“Draft Regulations”), which seek to address some challenges relating to the implementation thereof. Under these FRPs to be implemented by the DMRE, existing environmental rehabilitation trust funds may only be used for post closure activities and may no longer be utilised for their intended purpose of concurrent and final rehabilitation and closure.
Several further proposed amendments to the FPRs, (“Proposed Amendments”) were published subsequently. On February 1, 2024, the Minister of Forestry, Fisheries and the Environment again amended the transitional period contained in regulation 17B of the Financial Provision Regulations, 2015. The transitional arrangements in regulation 17B of the FPRs allows the holder of a right or permit granted or issued, as the case may be, in accordance with the MPRDA, who applied for such right or permit before 20 November 2015, to continue making financial provision in accordance with regulations 53 and 54 of the regulations published under the MPRDA. Stated differently, a person who applied for a right or permit prior to 20 November 2015, is not yet required to comply with the Financial Provision Regulations. In the previous amendments to the regulation 17B of the Financial Provision Regulations, the Minister always specified a date by when the transitional period would expire and when all holders would be required to comply with the Financial Provision Regulations. However, this time the Minister has amended regulation 17B to provide that the transitional period will continue to apply until the Minister published a date by when all holders are required to comply with the Financial Provision Regulations.
The Proposed Amendments, in their current form and which are still subject to the approval of the DMRE and Treasury, allow under certain circumstances for the withdrawal against financial provision (which is currently not contemplated in the FPR). It is therefore uncertain whether these provisions relating to withdrawal will remain in their current form, or at all.
See discussion in 4.B. Business Overview – Governmental regulations and their effect on our business – Financial Provision for Rehabilitation.
The implementation of Carbon Tax effective from June 1, 2019 may have a direct or indirect material adverse effect on our business, operating results and financial condition.
The Carbon Tax Act No 15 of 2019, or the CTA, came into effect from June 1, 2019. The CTA is based on the polluter-pays-principle and will be implemented across phases. The first phase ran from June 1, 2019 to December 31, 2022 and is applicable to scope 1 emitters. The first phase did not have a material financial impact on the Group. The second phase starting date was pushed from January 1, 2023 to January 2026. During the first phase, tax-free emission allowances ranging from 60 per cent to 95 per cent are available to emitters in this first phase. This includes a basic tax-free allowance of 60 per cent for all activities, a 10 per cent process and fugitive emissions allowance, a maximum 10 per cent allowance for companies that use carbon offsets to reduce their tax liability, a performance allowance of up to 5 per cent for companies that reduce the emissions intensity of their activities, a 5 per cent carbon budget allowance for complying with the reporting requirements and a maximum 10 per cent allowance for trade exposed sectors. The South African government indicated that a review of the impact of the carbon tax will be conducted before the second phase of the South African Carbon Tax Act is implemented.
Initially, the draft explanatory memorandum of the Taxation Laws Amendment Bill proposed that amendment to section 5(2) of the Carbon Tax Act to provide for the carbon tax rate adjustment by US$1, US$2 and US$3/ t CO2e for the 2023, 2024 and 2025 tax periods ending on 31 December using the average exchange rate as defined in the Income Tax Act. The rate will thereafter increase gradually to US$20t CO2e in 2026 and at least to US$30/t CO2e in 2030. However, after public consultation, it was decided that the increases would be rand-based due to the instability of the USD/rand exchange rate. Currently under phase 1 an amount of R190/t CO2e carbon tax is charged on scope 1 emissions. It remains unclear whether the scope will include scope 2 emissions which typically include indirect emissions from electricity consumption. Although the decarbonization of electricity as an energy supply must nevertheless be prioritized by both the country and industries at large to de-carbonize the economy, the increased proposed rates is expected to have an adverse impact on business.
The carbon tax has not had an impact on the price of electricity. However, should Eskom be required to pass on the cost of the tax from its emissions to its customers, electricity tariffs may rise significantly. This may also affect the electricity prices charged to our suppliers who may pass on the tax to us increasing the price of goods and services we consume in our operation.
Regulations detailing the tax-free emission allowances during the second phase have not been published to date. The second phase of implementation of the Carbon Tax may have a material direct and/or indirect adverse effect on our business, operating results and financial condition if the tax-free emission allowances are significantly reduced or the scope of implementation of the CTA is significantly increased. In addition, the potential increases in costs resulting from suppliers passing through their Carbon Tax exposure to the Company may have a direct or indirect material adverse effect on our business, operating results and financial condition.
Ring-fencing of unredeemed capital expenditure for South African mining tax purposes could have an adverse effect on the business, operating results and financial condition of our operations.
The Income Tax Act No 58 of 1962, or the ITA, contains certain ring-fencing provisions in section 36 specifically relating to different mines regarding the deduction of certain capital expenditure and the carry over to subsequent years. After the restructuring of the surface operations, effective July 1, 2012, Ergo is treated as one taxpaying operation pursuant to the relevant ring-fencing legislation. It is expected that FWGR will also be treated as one taxpaying operation pursuant to the relevant ring-fencing legislation. In the event that we are unsuccessful in confirming our position or should the South African Revenue Service have a different interpretation of section 36 of the ITA, it could have an adverse effect on our business, operating results and financial condition.
Assessment of unredeemed capital expenditure by the South African Revenue Service could have an adverse effect on the business, operating results and financial condition of our operations.
The South African Revenue Service (“SARS”) assesses capital expenditure when it is redeemed against taxable mining income rather than when it is incurred. A different interpretation by SARS could have an adverse effect on our business, operating results and financial condition.
Since our South African labor force has substantial trade union participation, we face the risk of disruption from labor disputes and new South African labor laws.
Labor costs are significant for Ergo, constituting 17% of Ergo’s production costs for fiscal year 2024 (2023: 18%). As of June 30, 2024, our Ergo operations provided full-time employment for 715 employees while our main service providers deployed an additional 1755 employees to our operations, of whom approximately 88% are members of trade unions or employee associations.
Labor costs are significant for FWGR, constituting 18% of FWGR’s production costs for fiscal year 2024 (2023: 20%). As of June 30, 2024, our FWGR operations provided full-time employment for 153 employees while our main service providers deployed an additional 298 employees to our operations, of whom approximately 85% are members of trade unions or employee associations.
We have entered into various agreements regulating wages and working conditions at our mines. FWGR's wage current wage agreement came to an end on June 30, 2024 and new wage negotiations are currently ongoing. Unreasonable wage demands could increase production costs to levels where our operations are no longer profitable. This could lead to accelerated mine closures and labor disruptions. We are also susceptible to strikes by workers from time to time, which result in disruptions to our mining operations.
In recent years, labor laws in South Africa have changed in ways that significantly affect our operations. In particular, laws that provide for mandatory compensation in the event of termination of employment for operational reasons and that impose large monetary penalties for non-compliance with the administrative and reporting requirements of affirmative action policies could result in significant costs to us. In addition, future South African legislation and regulations relating to labor may further increase our costs or alter our relationship with our employees. Labor cost increases could have an adverse effect on our business, operating results and financial condition.
Labor unrest could affect production.
During March 2022 to June 2022 there was strike action by staff at the Sibanye-Stillwater gold mines adjacent to FWGR. FWGR’s gold bars are smelted at Sibanye-Stillwater’s Driefontein plant. This resulted in Ergo having to smelt FWGR gold on their behalf. Such events at our operations or at our reclamation sites has in the past and could in future have an adverse effect on our business, operating results and financial condition.
We use a third party service provider for the management of our reclamation sites as well as on our Brakpan/Withok TSF and Driefontein 4 TSF. Any labor unrest or other significant issue at this third party service provider may impact the operation of this facility.
Strike action and intimidation at mining operations adjacent to our FWGR mining operations could have an adverse effect on our business, operating results and financial condition.
Our financial flexibility could be materially constrained by South African currency restrictions.
South African law provides for exchange control regulations, which restrict the export of capital from South Africa, the Republic of Namibia, and the Kingdoms of Lesotho and Eswatini, known collectively as the Common Monetary Area (the “CMA”). The Exchange Control Department of the South African Reserve Bank, or SARB, is responsible for the administration of exchange control regulations. In particular, South African companies:
•are generally not permitted to export capital from South Africa or to hold foreign currency without the approval of the SARB;
•are generally required to repatriate, to South Africa, profits of foreign operations; and
•are limited in their ability to utilize profits of one foreign business to finance operations of a different foreign business.
While the South African Government has relaxed exchange controls in recent years, South African companies remain subject to restrictions on their ability to deploy capital outside of the CMA and it is difficult to predict whether such relaxation of controls will continue in the future. As a result, DRDGOLD’s ability to raise and deploy capital outside the CMA is restricted. These restrictions could hinder DRDGOLD’s financial and strategic flexibility, particularly its ability to fund acquisitions, capital expenditures and exploration projects outside South Africa. For further information see Item 10D. Exchange Controls.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws outside of the United States.
The U.S. Foreign Corrupt Practices Act, or the FCPA, and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials or other persons for the purpose of obtaining or retaining business. This includes aggressive investigations and enforcement proceedings by both the U.S. Department of Justice and the SEC, increased enforcement activity by non- U.S. regulators, and increases in criminal and civil proceedings brought against companies and individuals. Our policies mandate compliance with the FCPA and other applicable anti-bribery laws. Our internal control policies and procedures may not protect us from reckless or criminal acts committed by our employees, the employees of any of our businesses, or third party intermediaries. In the event that we believe or have reason to believe that our employees or agents have or may have violated applicable anti-corruption laws, including the FCPA, we would investigate or have outside counsel investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management. Violations of these laws may result in criminal or civil sanctions, inability to do business with existing or future business partners (either as a result of express prohibitions or to avoid the appearance of impropriety), injunctions against future conduct, profit disgorgements, disqualifications from directly or indirectly engaging in certain types of businesses, the loss of business permits, reputational harm or other restrictions which could disrupt our business and have a material adverse effect on our business, financial condition, results of operations or liquidity.
We face risks with respect to compliance with the FCPA and similar anti-bribery laws through our acquisition of new companies and the due diligence we perform in connection with an acquisition may not be sufficient to enable us fully to assess an acquired company’s historic compliance with applicable regulations. Furthermore, as we make acquisitions such as the acquisition of FWGR, our post-acquisition integration efforts may not be adequate to ensure our system of internal controls and procedures are fully adopted and adhered to by acquired entities, resulting in increased risks of non-compliance with applicable anti-bribery laws.
Risks related to ownership of our ordinary shares or ADSs
It may not be possible for you to effect service of legal process, enforce judgments of courts outside of South Africa or bring actions based on securities laws of jurisdictions other than South Africa against us or against members of our board.
Our Company, certain members of our board of directors and executive officers are residents of South Africa. All our assets are located outside the United States and a major portion with respect to the assets of members of our board of directors and executive officers are either wholly or substantially located outside the United States. As a result, it may not be possible for you to effect service of legal process, within the United States or elsewhere including in South Africa, upon most of our directors or officers, including matters arising under United States federal securities laws or applicable United States state securities laws.
Moreover, it may not be possible for you to enforce against us or the members of our board of directors and executive officers’ judgments obtained in courts outside South Africa, including the United States, based on the civil liability provisions of the securities laws of those countries, including those of the United States. A foreign judgment is not directly enforceable in South Africa, but constitutes a cause of action which will be enforced by South African courts provided that:
•the court which pronounced the judgment had jurisdiction to entertain the case according to the principles recognized by South African law with reference to the jurisdiction of foreign courts;
•the judgment is final and conclusive (that is, it cannot be altered by the court which pronounced it);
•the judgment has not lapsed;
•the recognition and enforcement of the judgment by South African courts would not be contrary to public policy, including observance of the rules of natural justice which require that no award is enforceable unless the defendant was duly served with documents initiating proceedings, that he was given a fair opportunity to be heard and that he enjoyed the right to be legally represented in a free and fair trial before an impartial tribunal;
•the judgment was not obtained by fraudulent means;
•the judgment does not involve the enforcement of a penal or revenue law; and
•the enforcement of the judgment is not otherwise precluded by the provisions of the Protection of Business Act, 1978 (as amended), of South Africa.
It is the policy of South African courts to award compensation for the loss or damage sustained by the person to whom the compensation is awarded. Although the award of punitive damages is generally unknown to the South African legal system that does not mean that such awards are necessarily contrary to public policy. Whether a judgment was contrary to public policy depends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. South African courts cannot enter into the merits of a foreign judgment and cannot act as a court of appeal or review over the foreign court. South African courts will usually implement their own procedural laws and, where an action based on an international contract is brought before a South African court, the capacity of the parties to the contract will usually be determined in accordance with South African law.
It is doubtful whether an original action based on United States federal securities laws may be brought before South African courts. A plaintiff who is not resident in South Africa may be required to provide security for costs in the event of proceedings being initiated in South Africa. Furthermore, the Rules of the High Court of South Africa require that documents executed outside South Africa must be authenticated for use in South African courts. It may not be possible therefore for an investor to seek to impose liability on us in a South African court arising from a violation of United States federal securities laws.
Dividend withholding tax will reduce the amount of dividends received by beneficial owners.
On April 1, 2012, the South African Government replaced Secondary Tax on Companies (then 10%) with a 15% withholding tax on dividends and other distributions payable to shareholders. The dividend withholding tax rate was increased to 20%, effective from February 22, 2017. The withholding tax reduces the amount of dividends or other distributions received by our shareholders. Any further increases in such tax will further reduce net dividends received by our shareholders.
Your rights as a shareholder are governed by South African law, which differs in material respects from the rights of shareholders under the laws of other jurisdictions.
Our Company is a public limited liability company incorporated under the laws of the Republic of South Africa. The rights of holders of our ordinary shares, and therefore many of the rights of our ADS holders, are governed by our memorandum of incorporation and by South African law. These rights differ in material respects from the rights of shareholders in companies incorporated elsewhere, such as in the United States. In particular, South African law significantly limits the circumstances under which shareholders of South African companies may institute litigation on behalf of a company.
Control by principal shareholders could adversely affect our other shareholders.
Sibanye-Stillwater beneficially owns 50.1% of our outstanding ordinary shares and voting power and has the ability to control, our board of directors. Sibanye-Stillwater will continue to have control over our affairs for the foreseeable future, including with respect to the election of directors, the consummation of significant corporate transactions, such as an amendment of our constitution, a merger or other sale of our company or our assets, and all matters requiring shareholder approval. In certain circumstances, Sibanye-Stillwater’s interests as a principal shareholder may conflict with the interests of our other shareholders and Sibanye-Stillwater’s ability to exercise control, or exert significant influence, over us may have the effect of causing, delaying, or preventing changes or transactions that our other shareholders may or may not deem to be in their best interests. In addition, any sale or expectation of sale of some or all the shares held by Sibanye-Stillwater could have an adverse impact on our share price.
Sales of large volumes of our ordinary shares or ADSs or the perception that these sales may occur, could adversely affect the prevailing market price of such securities.
The market price of our ordinary shares or ADSs could fall if substantial amounts of ordinary shares or ADSs are sold by our stockholders, or there is the perception in the marketplace that such sales could occur. Current holders of our ordinary shares or ADSs may decide to sell them at any time. Sales of our ordinary shares or ADSs, if substantial, or the perception that any such substantial sales may occur, could exert downward pressure on the prevailing market prices for our ordinary shares or ADSs, causing their market prices to decline. Trading activity of hedge funds and the ability to borrow script in the marketplace will increase trading volumes and may place our share price under pressure.
ITEM 4. INFORMATION ON THE COMPANY
4A. HISTORY AND DEVELOPMENT OF THE COMPANY
Introduction
DRDGOLD, is a South African domiciled company that holds assets engaged in surface gold tailings retreatment in South Africa including exploration, extraction, processing and smelting.
We are a public limited liability company, incorporated in South Africa on February 16, 1895, as Durban Roodepoort Deep, Limited. On December 3, 2004, the company changed its name from Durban Roodepoort Deep Limited, to DRDGOLD Limited. Our operations focus on South Africa's Witwatersrand Basin, which has been a gold producing region for over 120 years.
Our shares and/or related instruments trade on the Johannesburg Stock Exchange (“JSE”), the New York Stock Exchange and the A2X.
Our registered office and business address is Constantia Office Park, Cnr 14th Avenue and Hendrik Potgieter Road, Cycad House, Building 17, Ground Floor, Weltevreden Park, 1709, South Africa. The postal address is P.O. Box 390, Maraisburg, 1700, South Africa. Our telephone number is (+27 11) 470-2600 and our facsimile number is (+27 86) 524-3061. We are registered under the South African Companies Act 71, 2008 under registration number 1895/000926/06. For our ADSs, the Bank of New York Mellon, at 101 Barclay Street, New York, NY 10286, United States, has been appointed as agent.
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov. Our internet address is http://www.drdgold.com. The information contained on our website is not incorporated by reference and does not form part of this annual report.
All of our operations are conducted in South Africa.
Our operations primarily consist of Ergo and FWGR. Our Ergo operations include the historic Crown operations (which were restructured into Ergo during fiscal year 2012 and have substantially been rehabilitated as at the end of fiscal year 2018). East Rand Proprietary Mines Limited's (“ERPM”) underground mining infrastructure was under care and maintenance up to this reporting date. The decommissioning and rehabilitation of the last remaining underground mining infrastructure was completed in fiscal year 2021.
Please refer "Item 5A. OPERATING RESULTS - Capital expenditure" for an understanding on capital expenditure incurred by the Group.
ERGO
Ergo was formed in June 2007. Ergo is the surface tailings retreatment operation which consists of what was historically the Crown Gold Recoveries Proprietary Limited (“Crown”), ERPM Cason Dump operation and the Ergo Gold business units. On July 1, 2012, Ergo acquired the mining assets and certain liabilities of Crown and all the surface assets and liabilities of ERPM as part of the restructuring of our surface operations.
Capital expenditure for the Ergo projects is mainly financed through operational cash flows while financing for significant growth projects may be obtained through specific financing arrangements, if required.
Recommissioning of the Withok TSF
The recommissioning of the Withok TSF is the engineering design that ultimately brings the tailings storage facility to its finality in terms of extent, operation, rehabilitation and management. The implemented final design would result in alignments with the Global Industry Standard on Tailings Management (“GISTM”) and regulatory bodies, increase deposition capacity, improve operation/management and bring about the sustainable closure of the facility.
Updated designs for the recommissioning of the Withok TSF have been prepared and expected to be submitted to the Department of Water and Sanitation ("DWAS") Dam Safety Office during the first half of fiscal year 2025. The design will include the build of a synthetic barrier system in place for ground water protection. The Ergo life of mine currently is 18 years.
For further information on other capital investments, divestures, capital expenditure and capital commitments, see Item 4D. Property, Plant and Equipment, and Item 5B. Liquidity and Capital Resources.
FWGR
On July 31, 2018, we acquired certain gold surface processing assets and tailing storage facilities that included Driefontein 3 and 5, Kloof 1, Venterspost North and South, Libanon, Driefontein 4, Driefontein 2 plant, Driefontein 3 plant, WRTRP pilot plant, and the land owned by Sibanye-Stillwater that was earmarked for the future development of a central processing plant, regional tailings storage facility and return water dam (together, the “WRTRP Assets”) associated with Sibanye-Stillwater’s WRTRP, subsequently renamed FWGR. This acquisition represented a significant increase in our assets. In connection with the acquisition, we issued to Sibanye-Stillwater new shares equal to 38.05% of outstanding shares and granted Sibanye-Stillwater an option to acquire up to a total of 50.1% of our shares within a period of 2 years from the effective date of the acquisition at a 10% discount to the prevailing market value. On January 8, 2020, Sibanye-Stillwater exercised the option and on January 22, 2020 subscribed for 168,158,944 DRDGOLD shares at an aggregate subscription price of R1,086 million, (R6.46 per DRDGOLD share).
The assets acquired were to be developed in two phases – Phase 1 and Phase 2.
FWGR Phase 1
Phase 1 involved the reclamation of the Driefontein 5 dump through a reconfigured Driefontein 2 plant and deposition onto the Driefontein 4 tailings storage facility. The Driefontein 4 tailings storage facility was an upstream day-wall dam with a capacity of approximately 200,000 tonnes per month. In order to increase the deposition capacity to 500 000 tonnes per month, the conversion of this dam to cyclone deposition commenced in fiscal year 2019. The conversion has been completed and this allows a deposition capacity of 500,000 tonnes per month until at least the end of calendar year 2026 after which we will have to reduce tonnes on this facility.
The material being reclaimed by FWGR contains high levels of copper which incurs penalty refining charges of between 1% and 5% during final refining by Rand Refinery depending on the copper content of the bullion delivered. FWGR has been allocated 98% of its gold production with 2% lost to these penalty refining charges due to the high levels of copper in the bullion delivered. To reduce these penalty refining charges, FWGR constructed and commissioned a copper elution plant at a cost of approximately R12 million during fiscal year 2021. On average, the plant resulted in an additional 1.2kg of gold per month which would otherwise have been lost due to penalty refining charges for the copper in its bullion.
FWGR Phase 2 expansion
The Phase 2 project is a key project for us intended to mine FWGR current reserves and to extend potential resources in the West Rand.
Phase 2 includes the construction of a new RTSF, that we believe is necessary in order to develop FWGR as envisaged by management, the new RTSF is expected to be capable of processing 2.4 million tonnes per month with a maximum capacity of approximately 800 million tonnes. Delays in obtaining regulatory approval have affected the previously reported expected dates of the construction. An amended design of the RTSF was submitted to the Department of Water and Sanitation during fiscal year 2023. The amended design included the build of a synthetic barrier system in place for ground water protection and a combined centre line/downstream dam wall in the early stages of the facility. All of the required approvals and authorisations were obtained and the construction of the RTSF has commenced.
The Definitive Feasibility Study (“DFS”) for Phase 2 was completed in the 3rd quarter of fiscal year 2021 and the project was found to be economically viable in a number of scenarios.
We engaged an external consultant, Sound Mining (consultants to the mining industry specializing in surface and underground operations) to perform an independent review of the available information and studies that have been performed regarding the Phase 2 expansion project. These included:
•DFS performed by DRA Global (“DRA”) (An engineering consulting company) regarding the construction of the CPP and related pumping and pipeline infrastructure;
•Detail design of a new RTSF performed by Beric Robinson (engineer of record) and related capital costing performed by DRA;
•Reviews of the explorations data base, Mineral Resource and Reserve estimates of FWGR assets and other future potential assets such as battery metals, uranium and other gold West Rand metal resources;
•Legal tenure, permitting, environmental and compliance status; and
•Economic analysis of the projects.
Based on currently available information, the Company believes that there are no material technical or geo-metallurgical risks that could significantly impact the production forecasts.
The breaking of ground at this complex, on June 5, 2024, follows the appointment of a leading contractor to construct the RTSF and the receipt of the requisite permits. The expansion of DP2 will commence during the first quarter for fiscal year 2025.
Significant financing is required for the Phase 2 expansion which is expected to be financed through a combination of cash resources, operational cash flows and a new 5-year Bank facility as may be determined. (Refer to Item 18. “Financial Statements - Note 20 – Capital Management). Capital expenditure for other projects is mainly financed through operational cash flows and cash resources.
For further information on other capital investments, divestures, capital expenditure and capital commitments, see Item 4D. Property, Plant and Equipment, and Item 5B. Liquidity and Capital Resources.
ERPM
ERPM was acquired in October 2002 and consists of an underground mine which has been under care and maintenance since fiscal year 2009. Underground mining at ERPM was halted in October 2008. On July 1, 2012, ERPM sold its surface mining assets and its 65% interest in ErgoGold to Ergo in exchange for shares in Ergo as part of the restructuring of our surface operations.
In December 2018, ERPM concluded revised agreements to dispose certain of its underground assets to OroTree Limited (“Orotree”). The disposal of the underground mining and prospecting rights were concluded in the second half of the financial year ended June 30, 2019. Orotree did not exercise an option to purchase the underground mining infrastructure.
In fiscal 2021, ERPM completed the decommissioning and rehabilitation of the last remaining underground mining infrastructure, being the Far East Vertical Shaft.
Crown
Crown was acquired on September 14, 1998. Due to the depletion of mineral reserves in the western Witwatersrand, the Crown plant ceased operation in March 2017 and since then substantially rehabilitated.
4B. BUSINESS OVERVIEW
We are a South African company that holds assets engaged in surface gold tailings retreatment including exploration, extraction, processing and smelting. Our surface tailings retreatment operations, including the requisite infrastructure and metallurgical processing plants, are located in South Africa. Our operating footprint is unique in that it involves some of the largest concentration of gold tailings deposits in the world, situated within the city boundaries of Johannesburg and its suburbs and the far west rand of the province of Gauteng.
DRDGOLD has arranged its operations into two wholly owned entities covering their East Rand (east of Johannesburg) and far West Rand (far west of Johannesburg) businesses. The East Rand operations are run by Ergo and the West Rand operations by FWGR. A detailed overview of the operations is provided under Item 4D. Property, Plant and Equipment and in the Technical Report Summary attached as exhibits in this annual report.
DRDGOLD’s long-term goal is to extract as much gold from its assets as possible, in a sustainable and economically viable manner. To a large extent this depends on how effectively it continues to manage its capitals. DRDGOLD uses sustainable development to direct its strategic thinking. We seek sustainable benefits in respect to financial, manufactured, natural, social and human capitals, each of which is essential to our operations. Our mining operations are dependent on electrical power supplied by Eskom. Due to insufficient generating capacity, South Africa has faced significant disruptions in electricity supply in the past and we have occasionally suffered power outages or shortages as a result. Such power outages or shortages may lead to interruptions in our production. To help address these potential shortages and avoid the potential impact that insufficient electricity supplies may have on our mining operations, we have moved forward with our Solar Plant to reduce our reliance on Eskom and the future cost of electricity. Please see "Item 3D. Risk Factors - Risks related to doing business in South Africa" for an understanding of the impact Eskom's price volatility can have on DRDGOLD, “Item 4D. Property, Plant and Equipment – Capital Expenditure - Ergo” and “Item 18. Financial Statements – Note 24 – Payments made under protest” for further discussion related to shortages in electricity.
We also aim to align and overlap the interests of each of these capitals in such a manner that an investment in any one translates into value-added increases in as many of the others as possible. We therefore seek to achieve an enduring and harmonious alignment between them, and we pursue these criteria in the feasibility analysis of each investment. We intend to explore opportunities made possible by technology, which could entail further investment in research and development (“R&D”) to improve gold recoveries even further over the long term.
During the fiscal years presented in this Annual Report, all of our operations took place in one geographic region, namely South Africa. For a breakdown of revenue by operation, please see "Item 18. Financial Statements – Note 23 – Operating Segments." Surface tailings retreatment involves the extraction of gold from old mine dumps and slimes dams, comprising the waste material from earlier underground gold mining activities.
Description of Our Mining Business
Surface tailings retreatment
This is done by reprocessing sand dumps and slimes dams. Sand dumps are the result of the less efficient stamp-milling process employed in earlier times. They consist of coarse-grained particles which generally contain higher quantities of gold. Sand dumps are reclaimed mechanically using front end loaders that load sand onto conveyor belts. The sand is fed onto a screen where water is added to wash the sand into a sump, from where it is pumped to the plant. Most sand dumps have already been retreated using more efficient milling methods. Lower grade slimes dams were the product of the “tube and ball mill” recovery process. The economic viability of processing this material has improved due to improved treatment methods such as the treatment of large volumes of this material. The material from the slimes dams is broken down using monitor guns that spray jets of high pressure water at the target area. The resulting slurry is then pumped to a treatment plant for processing.
Exploration
Exploration activities are focused on the extension of existing ore reserves and identification of new ore reserves both at existing sites and at undeveloped sites. Once a potential site has been identified, exploration is extended and intensified in order to enable clearer definition of the site and the portions with the potential to be mined. Geological techniques are constantly refined to improve the economic viability of exploration and exploitation.
Our Metallurgical Plants and Processes
A detailed review of the metallurgical plants and processes is provided under Item 4D. Property, Plant and Equipment.
Gold Market
The gold market is relatively liquid compared to other commodity markets, and the price of gold is quoted in US dollars. Physical demand for gold is primarily for manufacturing purposes, and gold is traded on a world-wide basis. Refined gold has a variety of uses, including jewelry, electronics, dentistry, decorations, medals and official coins. In addition, central banks, financial institutions and private individuals buy, sell and hold gold bullion as an investment and as a store of value.
The use of gold as a store of value and the large quantities of gold held for this purpose in relation to annual mine production have meant that historically the potential total supply of gold has been far greater than demand. Thus, while current supply and demand play some part in determining the price of gold, this does not occur to the same extent as in the case of other commodities. Instead, the gold price has from time to time been significantly affected by macro-economic factors such as expectations of inflation, interest rates, exchange rates, changes in reserve policy by central banks and global or regional political and economic crises. In times of inflation and currency devaluation or economic uncertainty gold is often seen as a safe haven, leading to increased purchases of gold and support for its price.
The average gold price for fiscal year 2024 remained high due to continued economic uncertainty as the global economies attempt to recover from long term effects of COVID-19, global inflation decreasing slower than expected, speculation around the upcoming US elections, the ongoing conflict in Ukraine and conflict between Israel and Gaza. In addition, we were impacted by movements in the exchange rate of the rand against the dollar as described below.
We generally take full exposure to the US dollar spot price of gold and rand/dollar exchange rate. The higher the gold price, the higher our profit margin and vice versa, subject to exchange rate fluctuations.
The average gold spot price increased by 13% from $1,831 per ounce to $2,078 per ounce during fiscal year 2024 after having decreased by 0.2% from $1,834 per ounce to $1,831 per ounce during the fiscal year 2023 and having decreased by 1% from $1,850 per ounce to $1,834 per ounce during the fiscal year 2022. As a result, the average gold price received by us in rands for fiscal year 2024 increased by 20% to R1,248,679 per kg compared to the previous year at R1,041,102 per kg and for fiscal year 2023 increased by 16% to R1,041,102 per kg compared to the previous year at R894,409 per kg. The increase in the gold price received contributed to a 14% increase in our total revenue for fiscal year 2024 amounting to R6,239.7 million (2023: R5,496.3 million and 2022: R5,118.5 million). All our revenue is generated from our operations in South Africa.
Looking ahead we believe that the global economic environment, including escalating sovereign and personal levels of debt, economic volatility and the oversupply of foreign currency, will continue to make gold attractive to investors. The supply of gold in South Africa has shrunk in recent years and is likely to shrink even more due to the significantly reduced capital expenditure and development occurring in the sector.
Until April 11, 2022, all gold we produced was sold on our behalf by Rand Refinery Proprietary Limited (Rand Refinery) in accordance with a refining agreement entered into in October 2001 and updated in July 2018. The sales price was fixed at the London afternoon fixed dollar price on the day the gold was delivered to the buyer. Before November 2020, the dollar proceeds sold were remitted to us within two days at which date the dollars were sold. Since November 2020 up to April 11, 2022, the dollars are also sold on the day the gold is delivered to the buyer. After April 11, 2022, gold is sold directly to South African Bullion banks after being refined to the required purity by Rand Refinery. The Group recognizes revenue from the sale of gold at a point in time when the gold is delivered to the South African Bullion bank on an agreed upon date, gold price and exchange rate. The gold bars which we produce consist of approximately 85% gold, 7-8% silver and the remaining balance comprises copper and other common elements. The gold bars are sent to Rand Refinery for assaying and final refining where the gold is purified to 99.9% and cast into troy ounce bars of varying weights. In exchange for this service, we pay Rand Refinery a variable refining fee and administration fees and up to April 11, 2022, a fixed marketing charge. We own 11.3% (fiscal year 2023 and 2022: 11.3%) of Rand Refinery.
Governmental regulations and their effects on our business
Common Law Mineral Rights and Statutory Mining Rights
Prior to the introduction of the Minerals and Petroleum Resources Development Act, or MPRDA in 2002, ownership in mineral rights in South Africa could be acquired through the common law or by statute. With effect from May 1, 2004, all minerals have been placed under the custodianship of the South African government under the provisions of the MPRDA and old order proprietary rights were required to be converted to new order rights of use within certain prescribed periods, as dealt with in more detail below. Mine dumps created before the MPRDA became lawful outside of the MPRDA and do not require a mining license to be processed nor do they require the extensive rehabilitation and closure guarantees that are a feature of the MPRDA. Many of the activities to re-process a mine dump do fall under the provisions of the National Environmental Management Act though, which requires at its most basic the compilation and submission of an Environmental Impact Assessment.
Conversion and renewal of Rights under the Mineral and Petroleum Resources Development Act, 2002
Existing old order rights were required to be converted into new order rights in order to ensure exclusive access to the mineral for which rights existed at the time of the enactment of the MPRDA. In respect of used old order mining rights, the DMRE is obliged to convert the rights if the applicant complies with certain statutory criteria. These include the submission of a mining works program, demonstrable technical and financial capability to give effect to the program, provision for environmental management and rehabilitation, and compliance with certain black economic empowerment criteria and an adequate social and labor plan. These applications had to be submitted within five years after the promulgation of the MPRDA on May 1, 2004. Similar procedures apply where we hold prospecting rights and a prospecting permit and conduct prospecting operations. Under the MPRDA mining rights are not perpetual. Upon being granted by the Minister of Mineral Resources and Energy, through the ambit of the DMRE, they remain valid for a fixed period, namely a maximum period of thirty years, after which they may be renewed for a further period of thirty years. Prospecting rights are limited to a maximum period of five years, with one further period of renewal of three years. Applications for conversion of our old order rights were submitted to the DMRE within the requisite time periods. As at June 30, 2024 and September 30, 2024 respectively, all of our Ergo operation’s old order mining rights have been converted into new order rights in terms of the MPRDA and applications to renew the converted new order mining rights have been lodged timeously.
The Broad-Based Socio-Economic Empowerment Charter
In order to promote broad based participation in mining revenue, the MPRDA provides for a Mining Charter to be developed by the DMRE Minister within six months of commencement of the MPRDA beginning May 1, 2004 and was subsequently amended in September 2010. It is used as an instrument to achieve mutually symbiotic sustainable growth and broad based and meaningful transformation of the mining and mineral industry.
The Mining Charter sets certain goals on equity participation (amount of equity participation and time frames) by historically disadvantaged South Africans of South African mining assets. It recommends that these are achieved by, among other methods, disposal of assets by mining companies to historically disadvantaged persons on a willing seller, willing buyer basis at fair market value. The goals set by the Mining Charter require each mining company to achieve 15 percent ownership by historically disadvantaged South Africans of its South African mining assets within five years and 26 percent ownership by May 1, 2014. It also sets out guidelines and goals in respect of employment equity at management level with a view to achieving 40 percent participation by historically disadvantaged persons in management and ten percent participation by women in the mining industry, each within five years from May 1, 2004. Compliance with these objectives is measured on the weighted average “scorecard” approach in accordance with a scorecard which was first published around August 2010. In April 2018, judgment was handed down by the Gauteng Division of the High Court in Pretoria against a provision in the 2010 Mining Charter regarding the “once empowered always empowered” principle.” This principle refers to whether a mining company, after the exit of a Black partner that held a stake in the company consequent to a result of a BEE transaction, continues to be BEE compliant. The judgment was appealed by the DMRE. The DMRE in August 2020, withdrew their notice to appeal to the Supreme Court of Appeal in respect of the judgment issued in April 2018 by the Pretoria High Court.
The Mining Charter and the related scorecard are not legally binding and, instead, simply state a public policy. However, the DMRE places significant emphasis on the compliance therewith. The Mining Charter and scorecard have a decisive effect on administrative action taken under the MPRDA.
In recognition of the Mining Charter’s objectives of transforming the mining industry by increasing the number of black people in the industry to reflect the country’s population demographics, to empower and enable them to meaningfully participate in and sustain the growth of the economy, thereby advancing equal opportunity and equitable income distribution, we have achieved our commitment to ownership compliance with the MPRDA through our historic black economic empowerment structures which have subsequently unwound.
The mining industry in South Africa is extensively regulated through legislation and regulations issued by government’s administrative bodies. These involve directives with respect to health and safety, mining and exploration of minerals, and managing the impact of mining operations on the environment. A change in regulatory or government policies could adversely affect our business.
On June 15, 2017, the Reviewed Broad-Based Black Economic Empowerment Charter for the South African Mining and Minerals Industry, 2017 (“2017 Mining Charter”) was published in the Government Gazette No. 40923 of Government Notice.581. The publication of the charter was met with widespread criticism and on June 26, 2017 the Minerals Council of South Africa (previously Chamber of Mines of South Africa), applied to the Gauteng Local Division of the High Court of South Africa, Johannesburg for an urgent interdict to prevent the charter from implementation.
Key provisions included:
•50% Black ownership for new prospecting rights;
•30% Black ownership for mining rights (up to 11% offset for local beneficiation)
• For new mining rights to be issued, the provision for 1% of Earnings Before Interest, Taxes, Depreciation and Amortisation (“EBITDA”) is paid to communities and employees as a trickle dividend from the sixth year of a mining right until dividends are declared or at any point in a 12-month period where dividends are not declared
On February 2016, The President of South Africa announced that a new mining charter would be developed and will follow a process which includes all stakeholders. The Minerals Council of South Africa subsequently postponed its court application in respect of the 2017 Mining Charter.
On September 27, 2018 the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (“Mining Charter 2018”) was published in Government Gazette No. 41934 of Government Notice No. 639 on September 27, 2018 superseding and replacing all previous charters, including Mining Charter III.
Mining Charter 2018 requires an enduring 30% BEE interest in respect of new mining rights. It also has extensive provisions in respect of HDP representation at board and management, as well provisions relating to local procurement of goods and services. The procurement target of the total spend on services from South African companies has been set at 80% (up from 70% in Mining Charter III) and 60% of the aggregate spend thereof must be apportioned to BEE entrepreneurs.
Key provisions of Mining Charter 2018 are:
• the conditional acceptance of the continued consequences of previous compliance of the BEE ownership threshold of 26% in respect of existing mining rights;
• of the 30% HDP ownership component, qualifying employees and communities are each to hold a 5% carried interest (as opposed to a free carry interest as per Mining Charter III) the cost of which may be recovered by the mining right holder from the development of the asset. the community interest in turn may be offset by way of an equity equivalent;
• removal of the so-called 1% of EBITDA trickle dividend provided for in the 2017 Mining Charter;
• the removal of provisions requiring community and employee representation at board level;
• that the continuing consequences of HDP ownership are not recognized for transfers of mining rights; and
• that a top up of HDP ownership back to 30% is required for the renewal of existing rights.
Subsequently, several notable developments have occurred:
In March 2019, the Mineral Council of South Africa brought an application in the Gauteng Division of the High Court for a judicial review and setting aside of certain provisions in Mining Charter 2018.
In June 2020, the same court ordered the Minerals Council of South Africa to join parties representing communities, trade unions and BEE entrepreneurs as a prerequisite to the continuation of the lawsuit, as they have a direct and substantial interest in the outcome of the litigation.
On September 21, 2021, the Gauteng Division of the High Court ruled that Mining Charter 2018 is not binding subordinate legislation but an instrument of policy. This ruling affirmed that the DMRE Minister was not entitled to make law through the Mining Charter 2018 to require 30% HDP ownership for the renewal of existing mining rights.
On November 23, 2021, the DMRE Minister confirmed that the DMRE Ministery will not appeal the ruling made by the Gauteng Division of the High Court of South Africa.
Mine Health and Safety Regulation
The South African Mine Health and Safety Act, 1996 (as amended), or the Mine Health and Safety Act (“MHSA”), came into effect in January 1997. The principal objective of the MHSA is to improve health and safety at South African mines by inter alia, providing for effective monitoring of health and safety conditions and the enforcement of health and safety measures at our mines. To this end, the MHSA imposes various duties on us at our mines and grants the authorities broad powers to, among other things, close unsafe mines and order corrective action relating to health and safety matters. In the event of any future accidents at any of our mines, regulatory authorities could take steps which could increase our costs and/or reduce our production capacity. The Act was amended in 2009 and the amendments to the Act dealt with inter alia the stoppage of production and increased punitive measures including increased financial fines and legal liability of mine management. Some of the more important provisions in the 2009 amendment bill are the insertion of section 50(7A) that places an obligation on an inspector to impose a prohibition on the further functioning of a site where a person’s death, serious injury, illness to a person or a health threatening occurrence has occurred; a new section 86A(1) creating a new offense for any person who contravenes or fails to comply with the provisions of the MHSA thereby causing a person’s death, serious injury or illness to a person. Subsection (3) further provides that (a) the “fact that the person issued instructions prohibiting the performance or an omission is not in itself sufficient proof that all reasonable steps were taken to prevent the performance or omission”; and that (b) “the defense of ignorance or mistake by any person accused cannot be permitted”; or that (c) “the defense that the death of a person, injury, illness or endangerment was caused by the performance or an omission of any individual within the employ of the employer may not be admitted”; section 86A(2) creating an offense of vicarious liability for the employer where a Chief Executive Officer, manager, agent or employee of the employer committed an offense and the employer either connived at or permitted the performance or an omission by the Chief Executive Officer, manager, agent or employee concerned; or did not take all reasonable steps to prevent the performance or an omission. The maximum fines were also increased. Any owner convicted in terms of section 86 or 86A may be sentenced to “withdrawal or suspension of the permit” or to a fine of R3 million or a period of imprisonment not exceeding five years or to both such fine and imprisonment, while the maximum fines for other offenses and for administrative fines have all been increased, with the highest being R1 million.
Under the South African Compensation for Occupational Injuries and Diseases Act, 1993 (as amended), or COID Act, employers are required to contribute to a fund specifically created for the purpose of compensating employees or their dependents for disability or death arising in the course of their work. Employees who are incapacitated in the course of their work have no claim for compensation directly from the employer and must claim compensation from the COID Act fund. Employees are entitled to compensation without having to prove that the injury or disease was caused by negligence on the part of the employer, although if negligence is involved, increased compensation may be payable by this fund. The COID Act relieves employers of the prospect of costly damages but does not relieve employers from liability for negligent acts caused to third parties outside the scope of employment. In fiscal year 2024, we contributed approximately R6.3 million under the COID Act (2023: R6.1 million and 2022: R5.9 million) to a multi-employer industry fund administered by Rand Mutual Assurance Limited.
Under the Occupational Diseases in Mines and Works Act, 1973 (as amended), or the Occupational Diseases Act, the multi-employer fund pays compensation to employees of mines performing “risk work,” usually in circumstances where the employee is exposed to dust, gases, vapors, chemical substances or other working conditions which are potentially harmful, or if the employee contracts a “compensatable disease,” which includes pneumoconiosis, tuberculosis, or a permanent obstruction of the airways. No employee is entitled to benefits under the Occupational Diseases Act for any disease for which compensation has been received or is still to be received under the COID Act. These payment requirements are based on a combination of the employee costs and claims made during the fiscal year.
Uranium and radon are often encountered during the ordinary course of gold mining operations in South Africa, and present potential risks for radiation exposure of workers at those operations and the public to radiation in the nearby vicinity. We monitor our uranium and radon emissions for compliance with all local laws and regulations pertaining to uranium and radon management and under the current legislative exposure limits prescribed for workers and the public, under the Nuclear Energy Act, 1999 (as amended) and Regulations from the National Nuclear Regulator.
Environmental Regulation
Managing the impact of mining on the environment is extensively regulated by statute in South Africa. Recent statutory enactments set compliance standards both generally, in the case of the National Environmental Management Act, and in respect of specific areas of environment impact, as in the case of the Air Quality Act 2004, the National Water Act (managing effluent), and the Nuclear Regulator Act 1999. Liability for environmental damage is also extended to impose personal liability on managers and directors of mining corporations that are found to have violated applicable laws.
The impact on the environment by mining operations is extensively regulated by the MPRDA. The MPRDA has onerous provisions for personal liability of directors of companies whose mining operations have an unacceptable impact on the environment.
Mining companies are also required to demonstrate both the technical and financial ability to sustain an ongoing environmental management program, or EMP, and achieve ultimate rehabilitation, the particulars of which are to be incorporated in an EMP. This program is required to be submitted and approved by the DMRE as a prerequisite for the issue of a new order mining right. Various funding mechanisms are in place, including trust funds, guarantees and concurrent rehabilitation budgets, to fund the rehabilitation liability.
The MPRDA imposes specific, ongoing environmental monitoring and financial reporting obligations on the holders of mining rights.
We believe that our environmental risks have been addressed in EMPs which have been submitted to the DMRE for approval. Additionally, key environmental issues have been prioritized and are being addressed through active management input and support as well as progress measured in terms of activity schedules and timescales determined for each activity.
Our existing reporting and controls framework is consistent with the additional reporting and assessment requirements of the MPRDA.
Financial Provision for Rehabilitation
We are required to make financial provision for the cost of mine closure and post-closure rehabilitation, including monitoring once the mining operations cease. This can be done through the use of rehabilitation trusts or through financial guarantees issued to the DMRE. During fiscal year 2022, a change in method was decided upon as providing for environmental rehabilitation from funding in a specific rehabilitation trust to financial guarantees which is an allowed method in terms of the National Environmental Management Act. The financial guarantees are issued through approved insurance products from Guardrisk Insurance Company Limited (“GICL”). All the required approvals for the change in method and transfer of the rehabilitation trust funds were obtained from the DMRE and a thorough consideration of tax and legal impacts were completed prior to the funds being transferred to GICL directly from the rehabilitation trust where the funds were previously held. As of June 30, 2024, we held a total of R697.5 million (2023: R630.6 million) in funds. As at June 30, 2024 guarantees amounting to R951.8 million (2023: R951.8 million) were issued to the DMRE.
The provision for environmental rehabilitation for the group was R616.8 million at June 30, 2024, compared to R562.1 million at June 30, 2023.
New Financial Provisioning Regulations (“FPR”) were promulgated on November 20, 2015 under the National Environmental Management Act, 107 of 1998 (“NEMA”) by the Department of Forestry, Fisheries and the Environment (“DFFE”). Under the FPRs to be implemented by the DMRE, existing environmental rehabilitation trust funds, of which DRDGOLD has Rnil million, may be used only for post closure activities and may no longer be utilized for their intended purpose of concurrent and final rehabilitation on closure. As a result, new methods for provisions will have to be made for these activities.
Several further proposed amendments to the FPRs, (“Proposed Amendments”) were published subsequently. On February 1, 2024, the Minister of Forestry, Fisheries and the Environment again amended the transitional period contained in regulation 17B of the Financial Provision Regulations, 2015. The transitional arrangements in regulation 17B of the FPRs allows the holder of a right or permit granted or issued, as the case may be, in accordance with the MPRDA, who applied for such right or permit before 20 November 2015, to continue making financial provision in accordance with regulations 53 and 54 of the regulations published under the MPRDA. Stated differently, a person who applied for a right or permit prior to 20 November 2015, is not yet required to comply with the Financial Provision Regulations. In the previous amendments to the regulation 17B of the Financial Provision Regulations, the Minister always specified a date by when the transitional period would expire and when all holders would be required to comply with the Financial Provision Regulations. However, this time the Minister has amended regulation 17B to provide that the transitional period will continue to apply until the Minister published a date by when all holders are required to comply with the Financial Provision Regulations.
The Proposed Amendments, in their current form and which are still subject to the approval of the DMRE and Treasury, allow under certain circumstances for the withdrawal against financial provision (which is currently not contemplated in the FPR). It is therefore uncertain whether these provisions relating to withdrawal will remain in their current form, or at all.
Regulation 5(4) of the Proposed Amendments states that the determination of financial provision must be undertaken by a specialist, which according to the definitions listed in the Proposed Amendments is an “independent person”. Regulation 10 of the Proposed Amendments further requires the annual review and re-assessment of financial provision by an independent specialist, which in terms of Regulation 11 of the Proposed Amendments must also be audited by an independent auditor. The Proposed Amendments do not require that the annual review and re-assessment of financial provision be audited by a financial auditor.
4C. ORGANIZATIONAL STRUCTURE
The following chart shows our principal subsidiaries as of June 30, 2024 and as of September 30, 2024 respectively. All of our subsidiaries are incorporated in South Africa. Our voting interest in each of our subsidiaries are equal to our ownership interests. We hold the majority of our subsidiaries directly or indirectly as indicated below. Refer to Exhibit 8.1 for a list of our significant subsidiaries.
1 Sibanye Gold Proprietary Limited trading as Sibanye-Stillwater.
2 Includes shareholding by subsidiary, EMO of 0.36% and shareholding by directors of the Company of 0.15%. Such shareholding is classified as non-public.
Ergo was previously owned by Ergo Mining Operations (Proprietary) Limited (EMO). EMO was 74% owned by DRDGOLD Limited and 26% by our broad-based black economic empowerment (BBBEE) partners – Khumo Gold SPV Proprietary Limited (Khumo) and the DRDSA Empowerment Trust. In FY2015, an agreement with our BBBEE partners entailing a roll-up of shareholding included the substitution of their 26% shareholding in EMO for 8.1% and 2.4% shareholding in DRDGOLD Limited respectively. At 30 June 2024, Khumo and the DRDSA Empowerment Trust held nil shares in DRDGOLD. In terms of the “once empowered, always empowered” principle, the transaction is deemed to still provide compliance with ownership element of the Mining Charter.
4D. PROPERTY, PLANT AND EQUIPMENT
Description of Significant Subsidiaries' Properties and Mining Operations
Mineral Reserves and Mineral Resources summary disclosures
The financial and technical assumptions underlying the Mineral Resources and Mineral Reserves estimations contained in this report and in the Technical Report Summary or Summaries (“TRSs”) included as exhibits in this report are current as at June 30, 2024, the period covered by each of the respective reports. Such assumptions rely on various factors that may change after the reporting period, including as a result of operational reviews which the Company undertakes from time to time and when necessary. The TRSs which are filed as exhibits to this report in accordance with Item 601(86) and Item 1300 of Regulation S-K have been prepared by the Qualified Persons named therein.
In South Africa, we are legally required to publicly report Mineral Reserves and Mineral Resources in compliance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, or SAMREC Code 2016 edition. South Africa is a member of the Committee for Mineral Reserves International Reporting Standards (CRIRSCO).
The following information is detailed for material properties of the Companies in Item 4D:
•History of operations
•Summary of operations
•Properties and location
•Geology
•Mining method
•Mineral Processing and Recovery Methods
•Infrastructure
•Exploration
•Environmental and Closure Aspects
•Water usage and reduction in use of potable water
•Water pollution
•Environmental rehabilitation closure providing and funding
•Legal aspects and permitting
•Production
•Capital Expenditure
•Risks inherent in estimates
History of operations
For a detailed review of the history of the operations, refer to Item 4A. History and development of the Company.
Summary of operations
DRDGOLD owns 100% of Ergo and 100% of FWGR. Both are managed surface tailings retreatment operations producing gold. Ergo operates across central and east Johannesburg, within the Gauteng Province and FWGR in Carletonville on the far West Rand of the Gauteng Province. In order to improve synergies, effect cost savings and establish a simpler group structure, DRDGOLD restructured the Group’s surface operations (Crown, ERPM’s Cason Dump surface operation and ErgoGold) into Ergo with effect from July 1, 2012. On July 31, 2018, DRDGOLD acquired WRTRP Assets, which are surface gold processing assets and tailing storage facilities associated with Sibanye-Stillwater’s WRTRP, and subsequently renamed it FWGR.
DRDGOLD also owns 100% of ERPM. In December 2018, ERPM concluded revised agreements to dispose certain of its underground assets to OroTree Limited (“OroTree”) which included the disposal of ERPM’s underground mining and prospecting rights. Underground mining infrastructure was not sold. ERPM’s underground gold mining infrastructure is under care and maintenance.
At June 30, 2024, Ergo employed 715 full-time employees. In addition, specialist service providers deployed a further 1755 employees to our operations bringing the total number of in-house and outsourced employees to 2,470 at June 30, 2024 (at June 30, 2023: 2,600; at June 30, 2022: 2,440). At June 30, 2024, FWGR employed 153 full-time employees. In addition, specialist service providers deployed a further 298 employees to our operations bringing the total number of in-house and outsourced employees to 451 at June 30, 2024 (at June 30, 2023: 452; at June 30, 2022: 491).
DRDGOLD has numerous Surface, Mining and Prospecting Rights and ownership of the surface rights and mine dumps vests in various legal entities. All required operating permit and licenses have been obtained and are in good standing with the regulators. More detailed information on the various properties' mineral title can be found under the “Legal aspects and permitting” here below.
Below is a geographical representation of the location on Ergo and FWGR within South Africa:
Summary of production
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The following table sets out aggregate production for Ergo and FWGR for the last three fiscal years: |
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| Total aggregate gold production |
2024 |
2023 |
2022 |
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| Gold produced (ounces) |
160,818 |
169,820 |
183,902 |
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DRDGOLD's summary Mineral Resources (Exclusive of Mineral Reserves) are set forth in the tables below: |
Mineral Resources (Exclusive of Mineral Reserves) as of June 30, 2024 |
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Measured Resources |
Indicated Resources |
Inferred Resources |
Total |
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Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
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(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
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| Ergo |
66.04 |
0.26 |
0.55 |
17.17 |
365.78 |
0.24 |
2.9 |
87.79 |
21.32 |
0.24 |
0.16 |
5.12 |
453.14 |
0.27 |
3.61 |
110.08 |
FWGR 1 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
| Total |
66.04 |
0.26 |
0.55 |
17.17 |
365.78 |
0.24 |
2.90 |
87.79 |
21.32 |
0.24 |
0.16 |
5.12 |
453.14 |
0.27 |
3.61 |
110.08 |
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1 Mineral Resources when stated exclusive of Mineral Reserves amount to zero for FWGR, because all of the Mineral Resources are converted to Mineral Reserves |
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Notes:
The figures contained in the tables are rounded, which may result in minor computational discrepancies which are not deemed to be significant.
Mineral Resources have been reported in accordance with the classification criteria of Subpart 1300 of Regulation S-K.
These Mineral Resources are stated exclusive of Mineral Reserves.
In situ Mineral Resource estimate reported according to S-K 1300 requirements
No geological losses applied
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DRDGOLD's summary Mineral Reserves are set forth in the tables below: |
Mineral Reserves as of June 30, 2024 |
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Proved Reserves |
Probable Reserves |
Total Reserves |
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Tones |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
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(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
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| Ergo |
170.06 |
0.31 |
1.67 |
52.72 |
196.17 |
0.25 |
1.60 |
49.04 |
366.23 |
0.28 |
3.27 |
101.76 |
| FWGR |
203.13 |
0.33 |
2.12 |
66.04 |
12.88 |
0.33 |
0.14 |
4.24 |
216.00 |
0.33 |
2.26 |
70.28 |
| Total |
373.19 |
0.32 |
3.79 |
118.76 |
209.05 |
0.25 |
1.74 |
53.28 |
582.24 |
0.30 |
5.53 |
172.04 |
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Notes:
The figures contained in the tables are rounded, which may result in minor computational discrepancies which are not deemed to be significant.
The Mineral Reserves constitute the feed to the gold plants
The Mineral Reserves are stated at a price of ZAR1,170,587/kg
The input studies are to a PFS level of accuracy
No mining losses or dilution has been applied in the conversion process nor has a mine call factor been applied.
Tonnes and grade Run-of-Mine (RoM) as delivered to the plant
The Mineral Reserve estimates contained herein may be subject to legal, political, environmental or other risks that could materially affect the potential development of such Mineral Reserves
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Properties and location
The Ergo plant is located approximately 43 miles (70 kilometers) east of the Johannesburg’s central business district in the province of Gauteng on land owned by Ergo. Access to the Ergo plant is via the Ergo Road on the N17 Johannesburg-Springs motorway.
Following the restructuring of the Crown operations, which consisted of three separate locations, City Deep, Crown Mines and Knights, into a single surface retreatment operation in Ergo, these mining rights were transferred to Ergo in March 2014. The Crown Mines plant and sites were closed down in March 2017 and rehabilitated.
The City Deep operation is located on the West Wits line within the Central Goldfields of the Witwatersrand Basin, approximately 3 miles (5 kilometers) south-east of the Johannesburg central business district in the province of Gauteng. Access is via the Heidelberg Road on the M2 Johannesburg-Germiston motorway. The City Deep plant continues to operate as a pump/milling station feeding the metallurgical plant.
The Knights operation is located at Stanley and Knights Road Germiston off the R29 Main Reef Road. The Knights plant was reconfigured from an operating metallurgical plant to operate as a pump/milling station from April 1, 2023.
As of June 30, 2024 and September 30, 2024, no material encumbrances exist on Ergo's property.
As of June 30, 2024, the net book value of Ergo’s mining assets was R4,667.0 million (2023: R2,419.1 million).
Below is a geographical representation of the location of individual material properties of Ergo and FWGR: (Figure A)
FWGR’s assets consists of the currently operational Driefontein 2 plant (“DP2”), Driefontein 4 TSF which is a current active tailings deposition facility, pilot plant, which is a moveable LogiProc pilot plant established to test the processes, techniques and assumptions made in the definitive level design of the full scale retreatment of dumps. FWGR currently owns six tailings storage facilities on the West Rand between Roodepoort and Carletonville, approximately 70km South West of Johannesburg (Figure A).
There are an additional four TSFs which will be transferred from Sibanye-Stillwater to FWGR once no longer required by the existing operations (Available TSFs). These are Driefontein 1, and 2, Kloof 2 and Leeudoorn. Numerous other TSFs are potentially available in the area for future reclamation. FWGR also owns land on which the Central Processing Plant (“CPP”) and RTSF and the return water dam were originally planned to be built.
As of June 30, 2024, and September 30, 2024, no material encumbrances exist on FWGR's property.
At June 30, 2024, the net book value of FWGR’s mining assets was R2,098.3 million (2023: R1,464.3 million).
Surface reclamation operations including the treatment of sand from ERPM’s Cason Dump, was conducted through the Knights metallurgical plant, tailings deposition facilities and associated facilities until ERPM’s surface mining assets were transferred to Ergo as part of the restructuring which took place on July 1, 2012.
As of June 30, 2024, and September 30, 2024, no encumbrances exist on ERPM's property.
At June 30, 2024, the net book value of ERPM’s mining assets was zero (2023: zero).
Geology
DRDGOLD’s surface deposits are the residue (“tailings”) of the mining and metallurgical process recovery of gold and uranium ores of the gold bearing late Archaean (2.7Ga to 3.2Ga) Witwatersrand sedimentary basin. The Witwatersrand Basin is the largest gold bearing metallogenic province globally and is unconformably overlain by units of the Ventersdorp Supergroup (~2.7Ga), the Transvaal Supergroup (~2.6Ga), and the Karoo Supergroup (~280Ma).
The deposits consist of gold, uranium and sulphur-bearing sand dumps and slimes dams, and the composition reflects the major constituents of the Witwatersrand Basin: quartz (70%-80%), mica (10%), chlorite and chloritoid (9%-18%) and pyrite (1%-2%). Gold, uranium, zirconium and chromium may be minor constituents averaging <100ppm each. Deposits possess characteristics, determined by the geometry, material source and processing plants in which the original ores were processed.
Mining method
Material processed by Ergo is sourced from surface sources namely, sand and slime and are reclaimed separately. FWGR only source is slime.
No selective mining takes place on a dump with the entire TSF being processed. This is due to the following:
•No place exists on mining sites to dump below cut-off grade material;
•The mining method is not conducive to selective mining; and
•The operation is also a rehabilitation exercise, and all mineralized material must be removed from the site, and it is, therefore, economically beneficial to process all material, even low-grade material.
TSFs are mined through hydro-mining using high-pressure jets of water to dislodge tailings material or move sediment for transportation as a slurry to processing plants. The hydro-mining removes the tailings material from the top of a TSF to the natural ground level in 15m layers. Hydraulic mining provides slurry feedstock to the plants continuously. Ergo also uses mechanical front end loaders to load slimes/sand material. Material is re-pulped with water and pumped to the plants.
Mineral Processing and Recovery Methods
Our metallurgical plants use carbon-in-leach (“CIL”) metallurgical processes to recover gold from slurry.
The surface sources have generally undergone a complex depositional history resulting in grade variations associated with improvements in plant recovery over the period the material was deposited. At Ergo, our gold producing metallurgical plant, we have an installed capacity to treat approximately 25 million tonnes of material per year based on 92% availability and are fully operational. All of the plants have undergone various modifications during recent years resulting in significant changes to the processing circuits. The City Deep plant continues to operate as a pump station and the Knights plant as a pump/milling station, both feeding the Ergo metallurgical plant. At FWGR, DP2 has an installed capacity to treat approximately 7.2 million tonnes of material per year.
The re-pulped slime is pumped to the plant and the reclaimed material is treated using screens, cyclones, ball mills and Carbon-in-Leach, or CIL, technology to extract the gold.
Set forth below is a description of each of our plants in operation:
Ergo Plant: Commissioned by Anglo American Corporation in 1977, became part of AngloGold Ashanti in 1998 from which it was acquired for a consideration of R42.8 million in 2007. The remaining five CIL tanks were refurbished during fiscal year 2015 to increase capacity to treat up to 25.2Mt per year.
Knights Plant: Commissioned in 1988, this surface/underground plant comprises a circuit including screening, primary cycloning, milling in closed circuit with hydrocyclones, thickening, oxygen preconditioning, CIL, elution, electro-winning and smelting to doré. The Knights plant, although historically part of the Crown operation, is located further east and considerably closer to the Brakpan/Withok TSF. Due to the location of the Knights plant it deposits waste on the Brakpan/Withok TSF. The Knights plant has an installed capacity to treat an estimated 3.6Mt per year. During fiscal year 2023 the Knights plant was reconfigured to operate as a milling and pump station and feeds material to the Ergo plant.
City Deep Plant: Commissioned in 1987, this surface/underground plant comprises a circuit including screening, primary, secondary and tertiary cycloning in closed circuit milling, thickening, oxygen preconditioning, CIL, elution and zinc precipitation followed by calcining and smelting to doré. Retreatment continued at the City Deep Plant until the plant was decommissioned in August 2013 to operate as a milling and pump station and is currently pumping material to the Ergo Plant for the final extraction of gold.
Driefontein 2 Plant: Recommissioned in fiscal year 2019, this surface/underground plant was refurbished and modifications made to the milling and cyclone circuit to ensure the production of a finer grind for gold liberation.
Infrastructure
The hydro-mining, reprocessing and re-deposition of tailings material requires a network of pipes. Slurry pipelines will be needed from the hydro-mining sites at the TSFs to the plants and tailings pipelines from the plants to the respective deposition facilities. High pressure water pipelines are necessary to supply the mining operations while separate low-pressure water pipes are needed for returning water to the plants from return water dams at the various TSFs. These have all been adequately designed and included in the LoM planning.
Ergo currently uses the Brakpan/Withok TSF as deposition facility, and FWGR, the Driefontein 4 TSF. Ergo requires the recommissioning of the Withok TSF to receive an additional tailings capacity in order to deliver into its life of mine. FWGR requires the RTSF to ensure adequate storage facilities for the long-term deposition of all tailings arising from FWGR operations.
Updated designs for the recommissioning of the Withok TSF have been prepared and expected to be submitted to the DWAS Dam Safety Office during the first half of fiscal year 2025. Site establishment in preparation for construction of the RTSF commenced on June 5, 2024, with a depositional capacity of 600ktpm available in the second half of 2026 calendar year, increasing to 1.2Mtpm in fiscal year 2027. The RTSF will have sufficient storage capacity to also accommodate new risings up to a rate of 2.4Mtpm from the mining of available TSFs in the area well into the future.
Up to May 2024 both operations obtained their power ultimately from the Eskom grid and therefore are currently exposed to the material risks associated with Eskom. Ergo is in the process of fully completing its solar power plant integrated with a battery energy storage system which will ultimately reduce electricity consumption from Eskom and increase the use of clean energy. Ergo operations receive power from several substations and mining sites are supplied power via several separate feeds. Currently, the Ergo plant demands peaks at 18MVa and the Brakpan/Withok TSF at 8MVa. Ergo operates 24-7-365 and the plant receives power at 6.6KV via Eskom’s 88kV Vlakfontein distribution. At FWGR, power is currently supplied from Eskom’s 132kV and 44kV grid to various Sibanye owned gold mines in the vicinity of FWGR’s operations. The power requirement of FWGR remains within the current surplus capacity of the Driefontein and Kloof mining complexes.
Exploration
Exploration and development activity at Ergo and FWGR involves the drilling of surface dumps and evaluating the potential gold and other commodities bearing surface material in the determination of its Mineral Resources and Mineral Reserves. These exploration programmes comprise:
•surveying to determine physical dimensions and volumes;
•auger or reverse circulation drilling programs to permit sampling for gold content and mapping of the gold distribution;
•metallurgical and flow sheet development test work; and
•tailings toxicity tests and specific gravity determination.
Environmental and Closure Aspects
In accordance with South African mining legislation, all mining companies are required to rehabilitate the land on which they work to a determined standard for alternative use. DRDGOLD’s business involves the reclamation of previously discarded material deposited, in many cases, by other companies, most of which are no longer in business. As a result we deal with legacy environmental issues.
Before we embark on new mining projects, we undertake an environmental authorization process which is performed by external consulting specialists that conduct detailed specialist studies, an environmental impact assessment and an environmental management programme (“EMP”) for the management of these projects. These reports are discussed and reviewed by our stakeholders through an open public participation process. Through this process, we are able to identify, address and minimize the effects of our activities on the environment and identify and mitigate the potential impacts our activities may have on surrounding communities and the receiving environment. Our environmental management systems and policies have been designed in compliance with South Africa’s National Environmental Management Act 107 of 1998 and associated regulations. Internal and external environmental audits are performed annually and recorded in a database to ensure compliance. Our EMP encompasses all the activities of our operations and assesses the environmental impacts of mining at reclamation sites, plants and tailings storage facilities. It also outlines the closure process, including financial provisions.
At Ergo, environmental management and compliance is further assisted by the in–house developed electronic monitoring system (Compliance Management Tool) that incorporates all existing Environmental Impact Assessments (“EIAs”), EMPs, Mining Right Conversions, Performance Assessments and Social and Labor Plans (“SLPs”) associated with each mining right. At Ergo the monitoring system incorporates existing EMPs and water use licenses. The existing and most recent studies are used to supplement the management components with regards to the mining right boundaries and its required compliance parameters. The individual management items are integrated to provide a holistic overview of the state of each of the mining right areas. Spatial data pertaining to the mining right boundaries is stored onto a central database and is utilized to create a live map which illustrates the mining right area and various environmental monitoring systems.
The Group actively manages and monitors the consumption of natural resources (including potable water and energy) at monthly and weekly meetings. This entails the analysis of trends to identify excess use and discuss various focus areas to ensure responsible natural resource usage. The major environmental risks are associated with dust from various reclamation sites, and effective management of relocated process material on certain tailings facilities. At Ergo, Municipal infrastructure as well as commercial and residential developments have encroached towards the Ergo operation.
The impact of nuisance dust fallout on the surrounding environment and community is addressed through a comprehensive monitoring network including appropriate community involvement. The monitoring reports are sent to regulators, municipalities, and interested and affected parties. For a residential zoned monitoring bucket, an exceedance is defined as above the dust limit of 600mg/m2/day. For a non-residential zoned monitoring bucket, an exceedance is defined as above the dust limit of 1200mg/m2/day.
Mitigation measures include environmentally friendly dust suppressants applied to high impact areas, active wetting of access roads by water bowsers, and a network of high velocity sprayers on our active TSFs. In the long-term, dust suppression and water pollution is managed through a program of progressive vegetation of the tailings followed by the application of lime, to reduce the natural acidic conditions, and fertilizer to assist in the growth of vegetation planted on the tailings facility.
Water usage and reduction in use of potable water
The primary uses for water are in the plants and hydro-mining for the various TSFs. Ergo constructed a central water reticulation plant in 2017 to give it the ability to deliver water to all corners of the operation and return it through a fully integrated closed system. 70% of all process water make up at Ergo is drawn from the Brakpan/Withok TSF to various reclamation sites by way of return water columns. Another 15% water is drawn from lakes and dams in the region in terms of the requisite extraction licenses. A further 10% of process water top up needs are from treated underground acid mine drainage (“AMD”) drawn from Trans-Caledon Tunnel Authority (“TCTA”). DRDGOLD has the right to use up to 30 Ml of AMD water per day. Potable water is used only where the sensitivity of equipment requires it and for certain early stages of irrigation to settle in newly established vegetation on TSFs. At FWGR, all water harvested from Driefontein 4 TSF is used. This amounts to approximately 45% of process water requirements. The balance is made up from underground mine dewatering. Water use licenses are available for the pumping of water from underground workings at Kloof 10 shaft and Driefontein 10 shaft, and the consumption planned from these shafts will not exceed the pumping rates approved in the respective WULs. Potable water consumption is limited to drinking and change houses and flocculant make up for usage in the plant.
Water pollution
A closed water system is designed to avoid having to treat water or having to discharge into surface water courses. Overflows of return water dams may, depending on their location, pollute surrounding streams and wetlands. Ergo and FWGR have an ongoing monitoring program to ensure that its water balances (in its reticulation system, on its tailings and its return water dams) are maintained at levels that are sensitive to the capacity of return water dams. Any water discharge is contained through paddocks on reclaimed sites, storm water run-off and water systems that pump rain or excess water into the system. Another possible source of water discharge is attributed mainly to compromised or aging pipes that may cause leaks. An external expert continuously monitors pipelines to timeously identify water leaks to minimize water seepages. A comprehensive maintenance plan is in place to replace compromised pipelines.
ERPM acid mine drainage
There is a regular ingress of water into the underground workings of ERPM, which was contained by continuous pumping from the underground section. Studies on the estimates of the probable rate of rise of water have been inconsistent, with certain theories suggesting that the underground water might reach a natural subterranean equilibrium, whilst other theories maintain that the water could decant or surface.
The government appointed TCTA to construct a partial treatment plant (neutralisation plant) to prevent the ground water being contaminated. TCTA completed the construction of the neutralisation plant for the Central Basin and commenced treatment during July 2014. As part of the heads of agreement signed in December 2012 between EMO, Ergo, ERPM and TCTA, sludge emanating from this plant is co-disposed onto the Brakpan/Withok TSF together with processed material from the Ergo plant. Partially treated water is then discharged by TCTA into the Elsburg Spruit. This agreement includes the granting of access to the underground water basin through one of the ERPM shafts and the rental of a site onto which it constructed its neutralisation plant. In exchange, Ergo and its associate companies including ERPM have a set-off against any future directives to make any contribution toward costs or capital of up to R250 million. Through this agreement, Ergo also secured the right to purchase up to 30 ML of partially treated AMD, a day, from TCTA at cost, in order to reduce Ergo’s reliance on potable water for mining and processing purposes.
Refer Item 18. ‘‘Financial Statements - Note 26.2 Contingent liability for environmental rehabilitation” for disclosures on potential pollution impact on ground water through seepage.
Environmental rehabilitation closure providing and funding
While the ultimate amount of rehabilitation costs to be incurred is uncertain, we have estimated that the total cost for Ergo, in current monetary terms as at June 30, 2024 is approximately R490.9 million (2023: R444.2 million). As at June 30, 2024, a total of R156.8 million (2023: R141.9million) is held in fixed income investment funds in the Guardrisk Cell Captive, as security for financial guarantees issued for rehabilitation costs.
We have estimated that the total cost for FWGR, in current monetary terms as at June 30, 2024 is approximately R116.4 million (2023: R109.0 million). As at June 30, 2024, a total of R525.3 million (2023: R474.8 million) is held in fixed income investment funds in the Guardrisk Cell Captive, as security for financial guarantees issued for rehabilitation costs.
We have estimated that as at June 30, 2024 the present discounted value of the total cost of rehabilitation for ERPM is approximately R9.4 million (2023: R9.0 million). A total of R15.4 million (2023: R13.9 million) is held in fixed income investment funds and is available for the settlement of these rehabilitation costs.
Legal aspects and permitting
Tailings storage facilities, in most instances, are considered movable and capable of being owned under the common law separately from land. As such, they are distinguishable from underground minerals, which can no longer be individually owned in South African but in respect of which the Department of Mineral Resources and Energy (DMRE) may issue Mining Rights in terms of the MPRDA of 2002 (MPRDA), as amended. The construct of the MPRDA caused the minerals in certain TSFs to therefore fall outside the regulatory reach of the MPRDA. The transitional arrangements of the MPRDA provided for existing operations, however, to convert old order rights (Mining Licenses held under the previous dispensation) to new order rights. Ergo successfully converted its old order licenses to Mining Rights and is seeking to consolidate them into a single mining right. In terms of reserves in TSFs which are owned by common law and are not covered by a Mining right, Environmental and Waste Management Approvals are obtained from the DMRE for the retreatment of such TSFs.
For an exploration project, a prospecting right, valid for five years, is issued, and for a mining operation, a mining right is valid for up to 30 years, is issued. The prospecting right, which is conducted in terms of a Prospecting Work Program, is renewable for a further three years.
The mining right is undertaken in terms of the Mining Works Program, Social and Labor Plan, and an approved Environmental Management Program, which can be renewed for a further 30 years. A prospecting right or mining right may be cancelled or suspended subject to Section 47 of the MPRDA.
Mining Rights and Prospecting Rights held are listed under the Ergo Mining Proprietary Limited subsidiary. DRDGOLD has numerous Surface, Mining and Prospecting Rights and ownership of the surface rights and mine dumps vests in various legal entities.
Ergo is in the process of a consolidation of its mining rights and as such has applied to extend the mining period for a further 30 years through its consolidated mine works program. The period of 30 years is the maximum period allowable for a Mining Right renewal as detailed in the MPRDA, as amended. A mining right in respect of which an application for renewal has been lodged shall despite its expiry date remain in force until such time as such application has been granted or refused. Water use licenses are applied for as and when required to remain compliant with relevant legislation. Ergo complies with all the conditions for renewal and has no reason to believe that the submitted renewals would not be granted. Ergo is in constant communication with the DMRE and is submitting the required information as per their requests to finalize these renewal applications.
The Brakpan/Withok TSF is duly registered in terms of Chapter 12 of the National Water Act (Act No. 36 of 1998). It is a Category 3 dam, described as “Large” and carrying a Hazard Rating of “Significant”, which renders it subject to a strict safety monitoring and reporting regime and that imposes the obligation on the operator to periodically compile and submit independent Dam Safety Audit Reports. The Dam Safety Office of the Department of Water and Sanitation is required to consider these reports and may impose, by way of directive, such conditions as it deems appropriate. Ergo is in compliance with the requisite reporting regime, having compiled and submitted reports in 2013, 2018 and 2021, accompanied by such design amendments as required by the envisaged deposition regime. Whilst Ergo has as of yet not received any directive that restricts or inhibits its current and future deposition regime of 1 650 million tonnes per month, the Brakpan/Withok TSF is a mature facility subject to a strict compliance regime, and it may in response to any of the aforementioned reports attract more onerous conditions from the regulator.
The Brakpan/Withok TSF is a mature facility, entering the tail-end of its life as an ultra-volume dam. We do not envisage maintaining the current deposition rate onto this dam of 1,650 million tonnes per month for much longer than another three years, before additional space will be required to maintain our targeted throughput rates. It is also subject to a strict compliance regime, requiring the regular compilation and filing of dam safety assessments, any of which may attract more onerous conditions from the regulator. Therefore, in light of Ergo’s future ambitions, plans for the recommissioning of the adjacent Withok TSF have been filed with the dam safety department of the Department of Water and Sanitation to supplement Ergo’s current deposition capacity and alleviate the future burden of the Brakpan/Withok TSF.
Ergo plans to maintain the aforementioned deposition rate for only three more years before moving onto the adjacent Withok TSF, having formally filed an application with Department of Water and Sanitation to have it recommissioned. Because of the strategic significance of deposition, Ergo continuously evaluates the remainder of its portfolio of assets to determine the best for each, be it to reclaim it as a resource, or to repurpose it as a TSF.
The Mineral Resources and Mineral Reserves held by FWGR were acquired from Sibanye Gold Proprietary Limited, a subsidiary of Sibanye-Stillwater Limited, in a transaction in which common law ownership was established over the various TSFs containing the said Mineral Resources and Mineral Reserves, and control was established by Sibanye-Stillwater over DRDGOLD. FWGR conducts its activities inter alia in accordance with Environmental Approvals (“EAs”) and the provisions of the Mine Health and Safety regulations. A Use and Access Agreement with Sibanye Gold articulates the various rights, permits and licenses held by Sibanye Gold in terms of which FWGR operates, pending the transfer to FWGR of those that are transferable.
FWGR entered into a smelting agreement with Sibanye-Stillwater to smelt and recover gold from gold loaded carbon produced at the DP2 plant, and deliver the gold to Rand Refinery. In exchange for this service, Sibanye-Stillwater receives a fee based on the smelting costs plus 10% of the smelting costs. Rand Refinery performs the final refinement of all gold produced. Up to April 11, 2022, FWGR also engaged its fellow subsidiary, Ergo Mining Proprietary Limited, to act as its agent and representative and to enter into a refining services arrangement with Rand Refinery for the sale, marketing and export of the refined gold of the Company. After April 11, 2022, FWGR continued to engage Ergo Mining Proprietary Limited, to act as its agent and representative to sell gold directly to the South African Bullion banks. This agreement is expected to be in place until FWGR obtains its own precious metals beneficiation license and its own depository account with Rand Refinery.
DRDGOLD and its subsidiaries own the rights to some of the properties where the Mineral Resources are located. In other cases, agreements are in place with the landowners to mine the dump material and rehabilitate the land for other uses. The details of the related surface rights are not material for the purpose of this report. The necessary agreements are in place for all properties in the LoM plan.
Impediments on rights to mine
Grootvlei Complex
Ergo has a mining right over Grootvlei 6L14 dump via mining right GP158MR. Ergo's application for the renewal of its prospecting rights over Grootvlei dumps 6L16, 6L17 and 6L17A to the DMRE was granted in July 2022. During the 2023 financial year, an external party raised a conflicting claim of common law ownership of 6L16, 6L17 and 6L17A TSFs. Although the claim was on common law ownership and no attempt has been made to set aside the prospecting rights over the TSFs, the Grootvlei TSFs have been excluded from Mineral Reserves and the life of mine, and included in Mineral Resources.
Marievale Complex
Ergo signed an offer to purchase 7L4 from EBM during the current financial year and is in the process of concluding a sale agreement.
Ergo acquired the Marievale TSFs 7L5, 7L6 and 7L7 – in terms of a written notarial executed deed of sale in 2019 and took possession of the TSFs on 8 April 2019. It has since also obtained the requisite National Environmental Management Act, 1998 regulatory approvals to retreat the said TSFs.
During the 2022 financial year, the owner of the land on which 7L5, 7L6 and 7L7 are situated – an estimated 36.5 million tonnes out of the total 54.1 million tonnes comprising the Marievale cluster – notified Ergo that in its view, the said TSFs had acceded to the land, and that it had become the owner of the TSFs. Ergo disputed the claim of legal title and referred the matter to arbitration as all ownership requirements were met when the TSFs were purchased by Ergo. Following the lodging of legal proceedings, the parties settled the dispute and Ergo during the 2023 financial year entered into a commercial arrangement with the land-owner whereby the landowner has renounced its entire right, title and interest in and to the TSFs in the favour of Ergo against payment of an agreed sum. The 7L4, 7L5, 7L6 and 7L7 TSFs have been classified as Mineral Reserves in fiscal year 2023 and fiscal year 2024.
Below is a graphical representation of the permits and licenses held within the Group:
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| Access Rights |
The grant of access to DRDGOLD of the:
· Driefontein 10 shaft;
· Kloof 10 shaft located in the Kloof mining area that is subject to the Kloof Mining Right, for the purpose of pumping and supplying, at the cost of WRTRP, the required quantities of water, as licensed, for the WRTRP Assets;
· rights, servitudes and agreements for installation, supply and distribution and maintenance of power supply; existing and proposed pipeline routes; servitudes; wayleaves and surface right permits; and
· Driefontein 1 Gold Plant for the purpose of accessing the Pilot Plant.
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Production
Ergo
For fiscal year 2024, production decreased to 116,994 ounces from 126,385 ounces in fiscal year 2023 mainly due to the volume throughput that decreased from 17.3Mt to 16.1Mt as a result of the late commissioning of new high volume reclamation sites due to delays in obtaining regulatory approvals and community-related disruptions. Average yield marginally decreased from 0.227g/t in fiscal year 2023 to 0.226g/t in fiscal year 2024.
Cash operating costs increased by $204 per ounce, or 14%, from $1,417 per ounce in fiscal year 2023 to $1,621 per ounce in fiscal year 2024 mainly due to the decrease in gold produced and the significant increase in contract reclamation costs and machine hire costs driven by the reclamation of material at clean-up sites.
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The following table details certain production and financial results of Ergo for the past three fiscal years. |
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2024 |
2023 |
2022 |
Production (metric) |
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Ore milled ('000 tonnes) |
16,101 |
17,334 |
22,111 |
| Recovered grade (oz/ton) |
0.008 |
0.008 |
0.006 |
| Gold produced (ounces) |
116,994 |
126,385 |
133,618 |
| Results of Operations |
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| Revenue (R million) |
4,524.9 |
4,108.6 |
3,704.8 |
| Cost of sales (R million) |
(3,673.2) |
(3,320.2) |
(3,141.8) |
Cash operating costs (R million)1 |
(3,571.0) |
(3,183.2) |
(3,009.8) |
Cash operating costs (R/kilogram)1 |
974,764 |
809,199 |
718,676 |
All-in sustaining costs (R/kilogram) 1 |
1,066,948 |
895,741 |
826,891 |
All-in cost (R/kilogram) 1 |
1,652,688 |
1,041,733 |
848,683 |
1 Cash operating cost, cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram are financial measures of performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations. These are all non-IFRS measures. For a reconciliation of these measures to the nearest IFRS measure see Item 5A.: “Operating Results - Reconciliation of cash cost per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram.” |
FWGR
For fiscal year 2024, production increased to 43,820 ounces from 43,435 ounces produced in fiscal year 2023. The gold produced increased due to increased volume throughput from 5.7Mt in fiscal year 2023 to 6.2Mt in fiscal 2024. This was marginally offset by a decrease in average yield from 0.237g/t in fiscal year 2023 to 0.221g/t in fiscal year 2024.
Cash operating costs increased by $117 per ounce, or 18%, from $645 per ounce in fiscal year 2023 to $762 per ounce in fiscal year 2024 mainly due to operating two reclamation sites simultaneously, one of which is a clean-up site. Furthermore, costs were aggravated by an increase in reagent consumption driven by the increased acidity and coarser nature of material reclaimed from Driefontein 3. Electricity costs have also spiked given the longer pumping distance to Driefontein 3.
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The following table details certain production and financial results of FWGR for the past three fiscal years. |
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2024 |
2023 |
2022 |
Production (metric) |
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Ore milled ('000 tonnes) |
6,166 |
5,698 |
6,078 |
| Recovered grade (oz/ton) |
0.008 |
0.008 |
0.008 |
| Gold produced (ounces) |
43,820 |
43,435 |
50,284 |
| Results of Operations |
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| Revenue (R million) |
1,714.8 |
1,387.7 |
1,413.6 |
| Cost of sales (R million) |
(756.3) |
(589.8) |
(592.1) |
Cash operating costs (R million)1 |
(622.3) |
(504.9) |
(454.0) |
Cash operating costs (R/kilogram)1 |
458,207 |
368,206 |
291,302 |
All-in sustaining costs (R/kilogram) 1 |
543,553 |
545,780 |
396,762 |
All-in cost (R/kilogram) 1 |
1,044,207 |
550,717 |
422,540 |
1 Cash operating cost, cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram are financial measures of performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations. These are all non IFRS measures. For a reconciliation of these measures to the nearest IFRS measure see Item 5A.: “Operating Results - Reconciliation of cash cost per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram.” |
Capital Expenditure
Ergo
For a discussion of capital expenditures in fiscal years 2022, 2023 and 2024, see "Item 5.A. Operating and Financial Review and Prospects—Capital expenditure".
Capital expenditure related to material growth projects are financed on a project-by-project basis which may include bank facilities and existing cash resources. Sustaining capital expenditure is financed from cash generated from operations and existing cash resources. For a summary of capital expenditure, see Item 5A. Operating Results.
Advance planning is ongoing for the recommissioning of the Withok TSF to accommodate higher grade resources in the area east of the of the Ergo Plant.
During fiscal year 2024 capital was expended to construct the solar power project, to reduce Ergo’s reliance on the Eskom grid and reduce its carbon footprint. The majority of the capital expenditure in fiscal year 2024 was expended to complete phase 1 of the solar power project and start with phase 2 of the project which is expected to be completed and the full system commissioned in the second quarter of fiscal year 2025.
FWGR
FWGR appointed an engineering consulting company to undertake the definitive feasibility study and detailed design for the Phase 2 project. The available information was independently reviewed by an external consultant, Sound Mining Solution (Pty) Ltd. The project initially included the construction of a new CPP with a capacity of between 1.2 Mtpm to 2.4 Mtpm and the equipping of the required reclamation sites and pipeline infrastructure to supply the relevant resources to the CPP. Phase 2 also includes the construction of a new RTSF capable of accepting up to 2.4 Mtpm to a capacity of approximately 800Mt. The definitive feasibility study was concluded and all regulatory approvals were obtained. The construction of the RTSF commenced on June 5, 2024.
Furthermore, the expansion of DP2 to a 1.2Mt processing capacity per month has been planned using the same designs applicable to CPP and construction of the DP2 expansion project commenced during the first quarter of fiscal year 2025.
Capital expenditure related to material growth projects are financed on a project-by-project basis which may include bank facilities and existing cash resources. Sustaining capital expenditure is financed from cash generated from operations and existing cash resources.
Mineral Reserves and Mineral Resources Estimation
Mineral Resources
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DRDGOLD's summary Mineral Resources (Exclusive of Mineral Reserves) are set forth in the tables below: |
Mineral Resources (Exclusive of Mineral Reserves) as of June 30, 2024 |
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Measured Resources |
Indicated Resources |
Inferred Resources |
Total |
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Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
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(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
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| Ergo |
66.04 |
0.26 |
0.55 |
17.17 |
365.78 |
0.24 |
2.9 |
87.79 |
21.32 |
0.24 |
0.16 |
5.12 |
453.14 |
0.27 |
3.61 |
110.08 |
FWGR 1 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
| Total |
66.04 |
0.26 |
0.55 |
17.17 |
365.78 |
0.24 |
2.90 |
87.79 |
21.32 |
0.24 |
0.16 |
5.12 |
453.14 |
0.27 |
3.61 |
110.08 |
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1 Mineral Resources when stated exclusive of Mineral Reserves amount to zero for FWGR, because all of the Mineral Resources are converted to Mineral Reserves |
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Notes:
The figures contained in the tables are rounded, which may result in minor computational discrepancies which are not deemed to be significant.
Mineral Resources have been reported in accordance with the classification criteria of Subpart 1300 of Regulation S-K.
These Mineral Resources are stated exclusive of Mineral Reserves
In situ Mineral Resource estimate reported according to S-K 1300 requirements
No geological losses applied
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Mineral Resources are estimates that contain inherent risk and uncertainties and depend upon geological interpretations and data statistics drawn from drilling and sampling programmes, which may prove to be unreliable. For detailed description of risks associated with the Company’s material properties, refer to Item 3D: Risk Factors.
Mineral Resources consist of sand dumps, slimes dams and silted ‘vlei’ areas and dams. Before dumps are included as Mineral Resources, they are evaluated by drilling and an initial assessment is completed by the Qualified Person.
With respect to the Mineral Resources and Mineral Reserves, drilling takes place on a predetermined grid to ascertain the average grade (grade model), moisture, expected extraction factors and ultimate financial viability before mining begins. Sampling is done subject to quality control and assurance as prescribed.
Estimation methods vary depending on data distribution and statistics. A block model is generated and used to evaluate the potential for inclusion into a mine plan. The applied Mineral Resource classification is a function of the confidence of the entire process from surveying, drilling, sampling, assaying, geological understanding and/or geostatistical relationships. Mineral Resources is reported in situ.
Both Mineral Resources and Mineral Reserves are determined by the average grade of a TSF which must be above or equal to a plant feed cut-off grade. A cut-off is also determined per complex or cluster. A TSF may report an average gold grade below a cut-off, but when included in a complex, the total complex could be above the cut-off. The assumptions on a Mineral Resource cut-off include working costs, the average plant recovery, the expected residue grade, the required yield based on working cost and gold price, and are presented below:
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ERGO |
FWGR |
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| Cut-off assumptions |
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| Gold price (R) |
1,170,587 |
1,170,587 |
| Working cost (R/tonne) |
115 |
97 |
| Plant recovery (%) |
42.00 |
51 |
| Mine call factor (%) |
100 |
100 |
| Cut-off grade (g/t) |
0.23 |
0.19 |
The Mineral Resource estimates for all the TSFs and a sand dump are declared as follows:
•The point of reference is in-situ. The TSFs or sand dumps themselves are the reference points;
•No geological or other losses were applied as all material is accessible and there are no geological structures;
•Mineral Resource Estimates are stated as both inclusive and exclusive of Mineral Reserves as defined in S-K 1300; and
•Mineral Resources are 100% attributable to DRDGOLD.
Mineral Reserves
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DRDGOLD's summary Mineral Reserves are set forth in the tables below: |
Mineral Reserves as of June 30, 2024 |
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Proved Reserves |
Probable Reserves |
Total Reserves |
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Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
Tonnes |
Grade |
Gold Content |
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(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
(mill) |
(g/tonne) |
('m ozs) |
(tonnes) |
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| Ergo |
170.06 |
0.31 |
1.67 |
52.72 |
196.17 |
0.25 |
1.60 |
49.04 |
366.23 |
0.28 |
3.27 |
101.76 |
| FWGR |
203.13 |
0.33 |
2.12 |
66.04 |
12.88 |
0.33 |
0.14 |
4.24 |
216.00 |
0.33 |
2.26 |
70.28 |
| Total |
373.19 |
0.32 |
3.79 |
118.76 |
209.05 |
0.25 |
1.74 |
53.28 |
582.24 |
0.30 |
5.53 |
172.04 |
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Notes:
The figures contained in the tables are rounded, which may result in minor computational discrepancies which are not deemed to be significant.
The Mineral Reserves constitute the feed to the gold plants
The Mineral Reserves are stated at a price of ZAR1,170,587/kg
The input studies are to a PFS level of accuracy
No mining losses or dilution has been applied in the conversion process nor has a mine call factor been applied.
Tonnes and grade Run-of-Mine (RoM) as delivered to the plant
The Mineral Reserve estimates contained herein may be subject to legal, political, environmental or other risks that could materially affect the potential development of such Mineral Reserves
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Key parameters used in the determination of Mineral Reserves June 30, 2024 |
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Recovery |
Mine call factor |
Operating costs |
Average cut-off grade |
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% |
% |
R/t |
g/t |
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| Ergo |
42 |
100 |
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115.00 |
0.23 |
|
| FWGR |
51 |
100 |
|
97.49 |
0.19 |
|
The Mineral Reserves were prepared in accordance with the requirements of S-K 1300, and the economic viability thereof performed at a minimum prefeasibility study level. Modifying factors like dilution or mining losses are not applied for the Mineral Reserve estimation because the TSFs are re-mined and re-processed in their entirety. All other modifying factors are reflected in the mine design and all of the associated technical aspects that informed the capital and operating cost estimates. Mineral Reserves are reported as delivered to the processing plants.
As material is removed for retreatment, the Mineral Resources and Mineral Reserves for each operation are adjusted accordingly. Continuous checks of modifying factors and ongoing surveys are conducted to monitor the rate of depletion and the accuracy of factors used in conversion.
Mineral Reserves changed in the past two fiscal years as follows:
•Mineral Reserves decreased from 5.79 million ounces at June 30, 2023, to 5.53 (a decrease of 4.5%) million ounces at June 30, 2024, mainly because of depletion through ongoing mining activities.
•Mineral Reserves decreased from 6.04 million ounces at June 30, 2022, to 5.79 (a decrease of 4.1%) million ounces at June 30, 2023, mainly because of depletion through ongoing mining activities.
The life-of-mine for Ergo based on Proven and Probable Mineral Reserves S-K 1300 as at June 30, 2024, was 18 years (June 30, 2023: 19 years).
The life of mine for FWGR based on Proven and Probable Mineral Reserves under S-K 1300 as at June 30, 2024 was 17 years (June 30, 2023: 18 years).
The year on year Mineral Reserve reconciliation is shown below:
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|
Tonnes (Mt) |
Grade Au (g/t) |
Au Ounces (Moz) |
Mineral Reserves as at June 30, 2023 |
603.31 |
0.30 |
5.79 |
| Depletion of Mineral Reserves – Ergo |
(13.16) |
0.36 |
(0.15) |
| Survey adjustments - Ergo |
(2.07) |
0.49 |
(0.03) |
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| Depletion of Mineral Reserves – FWGR |
(5.85) |
0.43 |
(0.08) |
Mineral Reserves at June 30, 2024 |
582.23 |
0.30 |
5.53 |
| The figures contained in the table are rounded, which may result in minor computational discrepancies which are not deemed to be significant. Depletion based on block model surveys |
Gold Price Assumptions
The estimation of Mineral Reserves and Mineral Resources requires the economic assessment to demonstrate reasonable prospects for economic extraction. Assumptions in the economic assessment includes a gold price. The Company has estimated the gold price based on consensus forecasts obtained from various sources which provided a range as of June 30, 2024. The lowest range of these forecasts was selected to take into account the volatility experienced in the current global economic conditions.
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Year ended June 30, 2024 |
Gold price |
| Rand gold price per kilogram |
1,170,587 |
| Dollar gold price per ounce |
1,973 |
| ZAR/USD rate |
18.46 |
|
|
Year ended June 30, 2023 |
Three-year average gold price |
| Rand gold price per kilogram |
1,081,261 |
| Dollar gold price per ounce |
1,934 |
| Ore Reserves (million ounces) |
17.39 |
Qualified Persons:
The information contained in Item 4D related to Mineral Reserves and Mineral Resources is based on information compiled by the Qualified Persons as defined in S-K 1300. The Qualified Persons are not employed by the Company. The Company has evaluated the qualification and experience of the Qualified Persons and is satisfied that they meet the requirements in accordance with the SAMREC Code and S-K 1300. DRDGOLD obtained written consents from the Qualified Persons prior to publication of this report. The Qualified Person responsible for the compilation and reporting of Ergo’s Mineral Resources is Mr Mpfariseni Mudau and for FWGR is Mr Nicholas Weeks. The Qualified Person responsible for the compilation and reporting of Ergo’s Mineral Reserves is Professor Steven Rupprecht and for FWGR is Mr Vaughn Duke.
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| Qualified Persons |
Title |
Address |
Qualifications |
Relevant years Experience |
Mpfariseni Mudau
Pr.Sci.Nat. 400305/12 |
Director of The RVN Group Proprietary Limited |
Willowbrook Villas 21, Van Hoof St, Roodepoort, 1724 |
BSc (Hons) – Geology, MSc (Mining Engineering) |
18 |
Professor Steven Rupprecht
FSAIMM 701013 |
Associate Principal Mining Engineer of the RVN Group |
Willowbrook Villas 21, Van Hoof St, Roodepoort, 1724 |
BSc. Mining Engineering PhD. Mechanical Engineering |
37 |
Nicholas Weeks
Pr.Sci.Nat. 155508 |
Director at Sound Mining International SA Proprietary Limited |
Sound Mining House, 2A Fifth Avenue, Rivonia, 2128 |
BSc (Hons) – Geology, MGSSA |
5 |
Vaughn Duke
Pr. Eng 940314 FSAIMM 37179 |
Partner of Sound Mining Solution Proprietary Limited |
Sound Mining House, 2A Fifth Avenue, Rivonia, 2128 |
BSc Mining Engineering (Hons), MBA |
39 |
Mineral Reserves and Mineral Resources internal control disclosure
DRDGOLD has employed RVN Group, an independent consultant to manage drilling activities and report sampling results in accordance with DRDGOLD’s prescribed internal control procedures. The control procedures include standard operating procedure, supervision of drilling by experienced geologists, technical site visits by Qualified Persons, chain of custody and management approvals. Reputable commercial laboratories perform the assaying of samples for gold. These laboratories have quality assurance and quality control measures in place that satisfy Qualified Persons and also meet DRDGOLD’s requirements. The results are also submitted to senior management at Ergo and FWGR to ensure that due process has been followed and to identify any anomalies. Verification of estimates is a routine part of the plant feed sampling programme. Plant feed grades are compared to the expected grades from the Mineral Resource and Mineral Reserves and updated monthly. Surveys are undertaken monthly, and a reconciliation is reported annually. Any adjustments for shortfall or overruns are made in the Mineral Resource and Mineral Reserve statement for the following year. Gains or losses are largely related to volume adjustments on survey although adjustment may be made for other reasons. The estimation of Mineral Reserves is an outcome of life of mine and budget planning which runs annually, whereby capital costs, operating costs and other assumptions are interrogated and approved at an executive committee level.
Risks inherent in estimates
Uncertainties associated with the operations, and therefore the Mineral Resource and Mineral Reserve estimates, can be mitigated. The risks inherent in these estimates are:
•Mining - whilst the mining method and practices are well established and conducted by experienced hydro-miners, throughput could be affected by a variety of issues, including, but not limited to availability of electricity and water.
•Quality of the Mineral Assets - the Mineral Reserves have all been adequately drilled, their likely content adequately assessed and recovery test work satisfactorily completed. The actual recoveries will be influenced by the actual Run-on-Mine grade entering the processing plants. This risk could be managed by blending material from different TSFs’, where possible.
•Plant Performance: the management of the risk of a lower-than-expected overall throughput recovery can be mitigated by ensuring optimal processing takes place at the processing plants.
•Tailings Capacity: depending on when the construction of the new or expanded TSF's are completed, deposition rates can be impacted which impacts the volumes the operations can process. Should regulatory approvals further delay the recommissioning of the Withok TSF, alternative depositions facilities needs to be explored.
•Delayed Commissioning of Key Infrastructure: delays to the scheduled commissioning of key assets for Ergo and FWGR will impact on the proposed production forecast and anticipated revenues.
•TSF Design Risk: the main design risk of the Withok TSF recommissioning and the RTSF is the process of installing the synthetic liner. Should creases occur during installation, this could lead to a perforation in the liner, thus compromising the liners' effectiveness.
•Water Supply: South Africa is a relatively dry area and predictions are that dry conditions will escalate. Mining is heavily reliant on water to transport material over large distances and for processing.
•Power Supply: power is provided by the national power supplier, Eskom. The national power supply and distribution infrastructure is severely distressed and this results in frequent disruptions to the power delivered to the South African mining industry. There is a curtailment agreement in place with Eskom which requires that during black-outs electricity use is to be curtailed, which is typically achieved by shutting down equipment. The curtailment reduces consumption between 10 and 20%.
•Grave Relocation: the process of grave relocation is well understood in the South African mining industry and supported by comprehensive statutory guidelines. It will be managed by specialists who will ensure that full consultation with next of kin is undertaken and that appropriate compensation is realized.
•Long-term Sustainability: Continued production beyond the current LoM plan and Mineral Reserve estimate relies on available TSFs that can be brought on line in the future. There is ample time for additional sampling and resource modelling to confirm their extent and content prior to production.
•Climate Change: extreme weather events such as droughts, extreme rainfall and high wind volumes are on the increase. Specifically, the increase in intensity of events, such as thunderstorms on the Highveld, where the operations are situated, will impact operations. Major property, infrastructure and/or environmental damage as well as loss of human life could also be caused by extreme weather events.
•Rising Costs: The global economic environment, geopolitical tensions and inflationary pressures world-wide have led to above inflationary increases in production costs as well as an unavailability of critical material such as reagents and critical equipment which effects production and operating costs.
•Country Risk and Security: increasing inflation, corruption and poor service delivery are the primary drivers of social pressures, particularly in poorer communities. The consequences of these pressures are mostly seen in operational disruptions and increased security measures due to protest action and more crime. Protest action also results in damage to existing infrastructure.
•Gold Price: Ergo and FWGR takes full exposure to the gold price, and therefore a reduction in the price of gold may erode margins or lead to the operations making a loss.
For additional information regarding the Company’s risks, see Item 3D - RISK FACTORS.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
This section should be read in conjunction with, our audited financial statements and the other financial information contained elsewhere in this Annual Report. Our financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Our discussion contains forward looking information based on current expectations that involve risks and uncertainties, such as our plans, objectives and intentions. Our actual results may differ from those indicated in such forward looking statements.
Comparison of financial performance for the fiscal year ended June 30, 2023 with fiscal year ended June 30, 2022
This comparison analysis can be found in Item 5 of the Company’s annual report on Form 20-F for the fiscal year ended June 30, 2023 filed with the United States Securities and Exchange Commission on October 30, 2023 (SEC File no. 001-35387).
5A. OPERATING RESULTS
Business overview
We are a South African gold mining company engaged in surface gold tailings retreatment, including exploration, extraction, processing and smelting. All our surface tailings retreatment operations, including the requisite infrastructure and metallurgical processing plants, are located in South Africa.
The success of DRDGOLD’s long-term goal to extract as much gold from its assets as possible and as economically viable depends, to a large extent, on how effectively it continues to manage its resources.
DRDGOLD’s strategic thinking is informed by principles of sustainable development. Our goal is to optimally exploit our entire resource over the long term, thereby seeking sustainable benefits in respect to the following capitals, each of which is essential to our operation – financial, manufactured, natural, human and social capital.
We also aim to align and overlap the interests of each of these capitals in such a manner that an investment in any one translates into value-add in as many of the others as possible. We therefore seek to achieve an enduring and harmonious alignment between them, and we pursue these criteria in the feasibility analysis of each investment.
Our profit for fiscal year 2024 increased compared to fiscal year 2023, mainly due to, inter alia, the following:
•the average rand gold price received increased by 20%; and
•marginally offset by the decrease in gold sold due to a decrease in average yield by 2% to 0.225g/t and a 3% decrease in throughput to 22,267,748t.
Key drivers of our operating results and principal factors affecting our operating results
•the price of gold, which fluctuates both in terms of dollars and rands;
•our production tonnages and gold content thereof, impacting on the amount of gold we produce at our operations;
•our cost of producing gold, including the effects of mining efficiencies;
•general economic factors, such as exchange rate fluctuations and inflation, and factors affecting mining operations in South Africa; and
•government policies that could materially impact our operations.
Gold price
Our revenues are derived primarily from the sale of gold produced at our surface tailings retreatment operations. As a result, our operating results are directly related to the price of gold, which can fluctuate widely and is affected by numerous factors beyond our control, including industrial and jewelry demand, expectations with respect to the rate of inflation, the strength of the U.S. dollar (the currency in which the price of gold is generally quoted) and of other currencies, interest rates, actual or expected gold sales by central banks, forward sales by producers, global or regional political or economic events, and production and cost levels in major gold-producing regions such as South Africa. In addition, the price of gold is often subject to rapid short-term changes because of speculative activities. In response to the high world wide inflation , investors globally, as they have in so many previous times of crisis, turned to gold and gold stocks as a safe haven asset, leading to a sustained high average gold price during fiscal year 2024 as result of global economic uncertainty along with the slow economic recovery and consequences of the Israel-Gaza conflict since fiscal year 2023.
The demand for and supply of gold affects gold prices, but not necessarily in the same manner that supply and demand affect the prices of other commodities. The supply of gold consists of a combination of new production from mining and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial organizations and private individuals.
The following table indicates data relating to the dollar gold spot prices for the 2024 and 2023 fiscal years:
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2024 fiscal year |
2023 fiscal year |
Change |
|
$ per ounce |
$ per ounce |
% |
Closing gold spot price on June 30, |
2,326 |
1,920 |
21 |
| Lowest gold spot price during the fiscal year |
1,810 |
1,614 |
12 |
| Highest gold spot price during the fiscal year |
2,450 |
2,072 |
18 |
| Average gold spot price for the fiscal year |
2,078 |
1,831 |
13 |
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All our operations and gold production are based in South Africa, and as a result, the impact of movements in relevant exchange rates is significant to our operating results. The average gold price in rand (based on average spot prices for the year) increased by 17% from R27,896 per ounce in 2022 to R32,519 per ounce in 2023, and increased by 20% to R38,859 per ounce in 2024.
An increase/(decrease) of 20% in the US dollar gold price throughout fiscal year 2024 would have increased/(decreased) revenue by approximately R1,247.9 million (2023: R1,099.3 million).
An increase/(decrease) of 20% in the rand to US dollar exchange rate throughout fiscal year 2024 would have increased/(decreased) revenue by approximately R1,247.9 million (2023: R1,099.3 million).
Gold production
In fiscal year 2024, gold production decreased to 160,818 ounces (produced from 22.3 million tonnes milled at an average yield of 0.225g/t) from 169,820 ounces in fiscal year 2023 (produced from 23.0 million tonnes milled at an average yield of 0.229g/t). This was mainly due to Ergo’s gold production which decreased to 116,994 ounces in fiscal year 2024 (produced from 16.1 million tonnes milled at an average yield of 0.226g/t) from 126,385 ounces in fiscal year 2023 (produced from 17.3 million tonnes milled at an average yield of 0.227g/t). The decrease at Ergo was mostly due to the reduction in tonnage throughput which was impacted by the late commissioning of the 5L27 and 4L3 sites. The Department of Water and Sanitation requested unanticipated design amendments and studies for the 4L3 site which resulted in further delays in obtaining approvals for the Water Use Licence. The decreased production from Ergo was in part offset by FWGR which had increased production at 43,820 ounces in fiscal year 2024 (produced from 6.2 million tonnes milled at an average yield of 0.221g/t) from 43,435 ounces in fiscal year 2023 (produced from 5.7 million tonnes milled at an average yield of 0.237g/t). Tonnes increased after the successful commissioning of Driefontein 3 but was partly offset by the lower average head grade of the top-layer material reclaimed at Driefontein 3 .
In fiscal year 2023, gold production decreased to 169,820 ounces (produced from 23.0 million tonnes milled at an average yield of 0.229g/t) from 183,902 ounces in fiscal year 2022 (produced from 28.2 million tonnes milled at an average yield of 0.203g/t). This was mainly due to Ergo’s gold production which decreased to 126,382 ounces in fiscal year 2023 (produced from 17.3 million tonnes milled at an average yield of 0.227g/t) from 133,618 ounces in fiscal year 2022 (produced from 22.1 million tonnes milled at an average yield of 0.188g/ t). The decrease at Ergo was a result of a decrease in tonnes milled due to the depletion of high-volume reclamation sites and delays in obtaining regulatory approval to commence reclamation at major reclamation sites. In addition, FWGR also had decreased production at 43,435 ounces in fiscal year 2023 (produced from 5.7 million tonnes milled at an average yield of 0.237g/t) from 50,284 ounces in fiscal year 2022 (produced from 6.1 million tonnes milled at an average yield of 0.257g/t). Both tonnes and grade were lower due to Driefontein 5 reaching the end of its life and entering final clean up along with operational delays in commissioning of the new reclamation site, Driefontein 3.
Cash operating costs
Cash operating costs is a non-IFRS financial measure of performance that is reported to the group’s chief operating decision maker (CODM) and is used to monitor performance – refer to Item 18. ‘‘Financial Statements - Note 23 – Operating segments”. For a reconciliation of this measure see Item 5A.: “Reconciliation of cash cost per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram”.
Cash operating costs include consumables, labor, specialized service providers, electricity and other related costs incurred in the production of gold. Consumables, water and electricity, labor, specialized service providers and other costs are the largest components of cash operating costs. A breakdown of cash operating costs into these costs is described in Item 5A.: “Comparison of financial performance for the fiscal year ended June 30, 2024 with fiscal year ended June 30, 2023”.
General economic factors
We are exposed to a number of factors, which could affect our profitability, such as exchange rate fluctuations, inflation and other risks relating to South Africa. In conducting mining operations, we are subject to the inherent risks and uncertainties of the industry, and the wasting nature of the assets.
Effect of exchange rate fluctuations
For the fiscal years 2024 and 2023, all of our revenues were generated from South African operations, all of our operating costs were denominated in rand and we derived all of our revenues in dollars before being translated to rands. As the price of gold is denominated in dollars which is then translated into rands, the appreciation of the dollar against the rand increases our profitability, whereas the depreciation of the dollar against the rand reduces our profitability.
In fiscal year 2024 the average rand gold price received increased by 20% compared to fiscal year 2023, this was a result of the combined impact of the average Dollar gold price which increased by 13% and the average exchange rate of the rand against the dollar that weakened by 5%.
In line with our long-term strategy of being an unhedged gold producer, we generally do not enter into forward gold sales contracts to reduce our exposure to market fluctuations in the Dollar gold price or the exchange rate movements. If revenue from gold sales falls for a substantial period below our cost of production at our operations, we could determine that it is not economically feasible to continue commercial production at any or all of our plants or to continue the development of some or all of our projects. However, during periods when medium-term debt is incurred to fund growth projects and hence introduce liquidity risk to the Group, we may mitigate this liquidity risk by entering into hedging instruments to achieve price protection (refer Item 11.
Quantitative and Qualitative Disclosures About Market Risk – General).
Effect of inflation and exchange rates
In the past, our operations have been materially adversely affected by inflation. If there is a significant increase in inflation in South Africa, our costs will increase and if such a cost increase is not offset by an increase in the rand price of gold, this will negatively affect our operating results.
The movements in the rand/dollar exchange rate, based upon average rates during the periods presented, and the local annual inflation rate for the periods presented, as measured by the South African Consumer Price Index, or CPI, are set out in the table below:
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Fiscal year ended |
Year ended June 30, |
2024 |
2023 |
2022 |
| (%) |
(%) |
(%) |
The average rand/dollar exchange rate weakened/(strengthened) by: |
5 |
|
17 |
|
(1) |
| CPI (inflation rate) |
5.1 |
5.4 |
7.4 |
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Government policies that could materially impact operations
The mining industry in South Africa is extensively regulated through legislation and regulations issued by government’s administrative bodies. One of the key findings of the Frasers Institute weighing on South Africa’s investment appeal, is lack of regulatory certainty. Although the industry’s successfully challenge of Mining Charter III in the High Court, that set aside certain provisions of the charter on the basis that it was purported legislation (as opposed to policy) provided some certainty to the industry, turnaround in obtaining permits and regulatory approvals remains slow, delaying the execution of key capital projects. The increasing prominence of ESG is also resetting the standard on transparency and sustainability and society generally is far more environmentally and socially aware, applying increasing pressure through providers of capital and the regulator to enforce compliance. For a more detailed discussion of government policies that may impact our operations, please refer to Item 4B: "Governmental regulations and their effects on our business."
Key financial and operating indicators
The table below presents the key performance measurement data for the past two fiscal years: The financial results for the fiscal years below are stated in accordance with IFRS as issued by the IASB. The table includes the key performance measures for our business and its profitability, which are revenue, gold production, gold prices, operating costs, cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram, capital expenditure (additions to property, plant and equipment).
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| Financial and operating data |
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Year ended June 30, |
|
2024 |
2023 |
| Revenue (R'm) |
6,239.7 |
5,496.3 |
| Gold production (ounces) |
160,818 |
169,820 |
| Gold production (kilograms) |
5,002 |
5,282 |
| Gold sold (ounces) |
160,400 |
169,531 |
| Gold sold (kilograms) |
4,989 |
5,273 |
| Average spot gold price (R/kilogram) |
1,249,304 |
1,045,472 |
| Average gold price received (R/kilogram) |
1,248,679 |
1,041,102 |
| Cost of sales (R'm) |
4,429.9 |
3,911.0 |
| Operating costs (R'm) |
4,206.0 |
3,711.5 |
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|
Cash operating costs (R'm) (1) |
4,193.3 |
3,688.1 |
Cash operating costs (R/kilogram) (1) |
833,536 |
697,382 |
All-in sustaining costs (R/kilogram) (1) |
946,848 |
827,148 |
All-in costs (R/kilogram) (1) |
1,509,040 |
937,525 |
| Additions to property, plant and equipment (R'm) |
3,113.9 |
1,030.9 |
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| (1) Cash operating costs, cash operating costs per kilogram, all-in sustaining costs, all-in sustaining costs per kilogram and all-in costs and all-in costs per kilogram are non-IFRS financial measures of performance that we use to monitor performance. A reconciliation of these measures to the nearest IFRS measure is included in Item 5A.: “Operating Results - Reconciliation of cash cost per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram.” |
Revenue
Revenue increased by 14% to R6,239.7 million in fiscal year 2024 from R5,496.3 million in fiscal year 2023 mainly due to the average rand gold price received that increased by 20% to R1,248,679 per kilogram offset by the 284kg decrease in gold sold from 5,273 kilograms in fiscal 2023 to 4,989 kilograms in fiscal 2024.
Refer to Item 5A:. “Operating results: Key drivers of our operating results and principal factors affecting our operating results” for a discussion regarding the gold price received and sales volumes.
Capital expenditure
During fiscal year 2024 capital expenditure increased by R2,083.0 million to R3,113.9 million from R1,030.9 million in fiscal year 2023.
Ergo’s capital expenditure during fiscal year 2024 increased by R1,538.6 million to R2,354.6 million from R816.0 million in fiscal year 2023. This was mainly due to construction of the solar plant amounting to R2,110.3 million , further development of R151.5 million for the development of reclamation sites and various capital expenditure on the Brakpan/Withok TSF.
FWGR’s capital expenditure during fiscal year 2024 increased by R546.8 million to R756.6 million from R209.8 million in fiscal year 2023. This was mainly due to the construction of the RTSF and its related infrastructure and properties amounting to R663.8 million and capital expenditure on the Driefontein 4 TSF amounting to R10.4 million.
Ergo’s capital expenditure during fiscal year 2023 increased by R391.8 million to R816.0 million from R424.2 million in fiscal year 2022. This was mainly due to construction of the solar plant amounting to R502.0 million , further development of R139.3 million for the development of reclamation sites including Marievale and Rooikraal dumps and various capital expenditure on the Brakpan/Withok TSF amounting to R45.4 million.
FWGR’s capital expenditure during fiscal year 2023 increased by R50.0 million to R209.8 million from R159.8 million in fiscal year 2022. This was mainly due to the development of the Driefontein 3 reclamation site amounting to R142.9, design work for the RTSF amounting to R7.8 million and capital expenditure on the Driefontein 4 TSF amounting to R3.5 million.
Critical accounting policies
The preparation of the consolidated financial statements requires management to make accounting assumptions, estimates and judgements that affect the application of the Group's accounting policies and reported amounts of assets and liabilities, income and expenses. By their nature, judgements are subject to an inherent degree of uncertainty. Accounting assumptions, estimates and judgements are reviewed on an ongoing basis. Revisions to reported amounts are recognized in the period in which the revision is made and in any future periods affected. Actual results may differ from these estimates.
Management has discussed the development and selection of each of these critical accounting policies with the Board of Directors and the Audit Committee, both of which have approved and reviewed the disclosure of these policies. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in Item 18. “Financial Statements”.
Critical accounting policies that require significant judgment
Management believes the following critical accounting policies require more significant judgements to be used in the preparation of our consolidated financial statements and could potentially impact our financial results and future financial performance:
•Payments made under protest: Judgement regarding the outcome of the matter, and
•Contingencies: Judgement regarding the outcome of the respective matters
Payments made under protest
The assessment to develop and apply the relevant accounting policy for payments made under protest that arise from the Municipality Electricity Tariff Dispute (refer Item 18. ‘‘Financial Statements - Note 24 Payments made under protest”) requires the exercise of significant judgement.
The judicial proceedings that impact the Payments made under protest are inherently complex legal issues that are subject to uncertainties and complexities and are subject to interpretation.
Contingencies
The assessment of the impact of contingent liabilities requires the exercise of significant judgement regarding the outcome of uncertain future events. Litigation and other judicial proceedings inherently entail complex legal issues that are subject to uncertainties and complexities and are subject to interpretation.
Critical accounting policies that require significant assumptions and estimates
Management believes the following are critical accounting policies which involve the more significant assumptions and estimates used in the preparation of our consolidated financial statements, and are therefore considered DRDGOLD’s critical accounting estimates which could potentially impact our financial results and future financial performance:
•Depreciation: Estimation of the life-of-mine
•Provision for environmental rehabilitation: Estimation of future environmental rehabilitation costs
•Income tax: Estimation of the deferred tax rate
•Payments made under protest: Estimation of the carrying value and recoverability
•Other investments: Estimation of the fair value of financial assets
Depreciation: Estimation of life-of-mine
Depreciation of mine plant facilities and equipment, as well as mining property and development (including mineral rights) are calculated using the units of production method which is based on the life-of-mine of each site. The life-of-mine is primarily based on proved and probable mineral reserves. It reflects the estimated quantities of economically recoverable gold that can be recovered from reclamation sites based on the estimated gold price. Changes in the life-of-mine will impact depreciation on a prospective basis. The life-of-mine is prepared using a methodology that takes account of current information to assess the economically recoverable gold from specific reclamation sites and includes the consideration of historical experience.
Provision for environmental rehabilitation: Estimation of future environmental rehabilitation costs
Provisions for environmental rehabilitation are provided at the present value of the costs expected to be incurred in the future to settle the obligation based on current prices. The unwinding of the obligation is included in profit or loss. Estimated future costs of environmental rehabilitation are reviewed regularly and adjusted as appropriate. Changes in estimates are capitalized or reversed against the related asset but taken to profit or loss if there is no related asset left. Gains or losses from the expected disposal of assets are not taken into account when determining the provision.
Estimates of future environmental rehabilitation costs are based on the Group’s environmental management plans which are developed in accordance with regulatory requirements, the life-of-mine plan and the planned method of rehabilitation which is influenced by developments in trends and technology.
Income tax: Estimation of the deferred tax rate
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The deferred tax liability is calculated by applying a forecast weighted average tax rate that is based on a prescribed formula. The calculation of the forecast weighted average tax rate requires the use of assumptions and estimates and are inherently uncertain and could change materially over time. These assumptions and estimates include the expected future profitability and timing of the reversal of the temporary differences. Due to the forecast weighted average tax rate being based on a prescribed formula that increases the effective tax rate with an increase in forecast future profitability, and vice versa, the tax rate can vary significantly year on year and can move contrary to current period financial performance.
Payments made under protest: Estimation of the carrying value and recoverability
The discounted amount of the Payments made under protest is determined using assumptions about the future that are inherently uncertain and can change materially over time and includes the discount rate and discount period.
These assumptions about the future include estimating the timing of concluding on the main application, i.e. the discount period, the ultimate settlement terms (refer Item 18. ‘‘Financial Statements - Note 24 Payments made under protest”), the discount rate applied and the assessment of recoverability.
Recognition and measurement
The asset that arises from the Ekurhuleni electricity dispute (refer Item 18. ‘‘Financial Statements - Note 24 Payments made under protest”) and that are payments made under protest is initially measured at a discounted amount and any difference between the face value of payments made under protest and the discounted amount on initial recognition is recognised in profit or loss as a finance expense. Subsequent to initial recognition, the Payments made under protest is measured using the effective interest method to unwind the discounted amount to the original face value less any write downs for recovery. Unwinding of the carrying value and changes in the discount period are recognised in the statement of profit or loss.
Assessment of recoverability
The discounted amount of the payments under protest is assessed at each reporting date to determine whether there is any objective evidence that the full amount is no longer expected to be recovered. The Group considers the reasonable and supportable information related to the creditworthiness of Ekurhuleni Metropolitan Municipality and events surrounding the outcome of the Main Application (refer Item 18. ‘‘Financial Statements - Note 24 Payments made under protest”). Any write down is recognised in the statement of profit or loss.
Other investments: Estimation of the fair value of financial assets
The fair value of other investments is determined using assumptions about the future that are inherently uncertain and can change materially over time. It includes several assumptions that are based on both observable and unobservable inputs. Assumptions applied in the estimation of the fair value of the investment in Rand Refinery include the following:
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| Amounts in R million |
Observable/unobservable input |
Unit |
2024 |
2023 |
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| Rand Refinery operations |
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| Forecast average gold price |
Observable input |
R/kg |
1,209,686 |
1,060,562 |
| Forecast average silver price |
Observable input |
R/kg |
15,142 |
13,460 |
| Average South African CPI |
Observable input |
% |
4.5 |
|
4.5 |
|
| South African long-term government bond rate |
Observable input |
% |
9.9 |
|
10.5 |
|
| Terminal growth rate |
Unobservable input |
% |
4.5 |
|
4.5 |
|
| Weighted average cost of capital |
Unobservable input |
% |
17.0 |
|
17.0 |
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| Investment in Prestige Bullion |
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| Discount period |
Unobservable input |
years |
9 |
10 |
| Cost of equity |
Unobservable input |
% |
17.0 |
17.0 |
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Marketability and minority discounts (both unobservable inputs) were also applied of 15.3% and 16.9% (2023: 15.3% and 17.0%) respectively. The latest budgeted cash flow forecasts provided by Rand Refinery as at June 30, 2024 was used, and therefore classified as an unobservable input into the models.
New standards, amendments to standards and interpretations
Refer to Item 18. ‘‘Financial Statements - Note 3 – New standards, amendments to standards and interpretations” for a discussion of relevant standards, amendments to standards and interpretations that may be applicable to the business of the Group and may have an impact on future consolidated financial statements.
Comparison of financial performance for the fiscal year ended June 30, 2024 with fiscal year ended June 30, 2023
Gold revenue
The following table illustrates the year-on-year change in gold revenue (excluding silver revenue) for fiscal year 2024 in comparison to fiscal year 2023:
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| R million |
Total |
Impact of change in amount of gold sold |
Impact of change in gold price |
Net change |
Total |
| gold revenue |
gold revenue |
| 2023 |
2024 |
| Ergo |
4,104.5 |
(324.3) |
737.2 |
412.9 |
4,517.4 |
| FWGR |
1,385.2 |
28.0 |
299.1 |
327.1 |
1,712.3 |
| Consolidated |
5,489.7 |
(296.3) |
1,036.3 |
740.0 |
6,229.7 |
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Gold revenue increased by R740.0 million, or 13%, to R6,229.7 million during fiscal year 2024. This was mainly due to the average rand gold price received which increased by 20% to R1,248,679 per kilogram offset by a decrease in gold sold from 169,531 ounces to 160,400 ounces.
Cost of sales
Cost of sales amounted to R4,429.9 million in fiscal year 2024, consisting mainly of operating costs of R4,206.0 million, depreciation of R270.4 million, a positive movement in gold in process of R34.9 million and a positive movement in the change in estimate of environmental rehabilitation of R11.6 million. These are discussed as follows:
Operating costs
Operating costs increased by 13% to R4,206.0 million for fiscal year 2024 compared to R3,711.4 million for fiscal year 2023. The increase is due to the significant increase in contract reclamation costs and machine hire costs driven by the reclamation of material at clean-up sites at Ergo. At FWGR the increase was due to operating Driefontein 3 and Driefontein 5 simultaneously, one of which is a clean-up site. Furthermore, costs were aggravated by an increase in reagent consumption driven by the increased acidity and coarser nature of material reclaimed from Driefontein 3. Electricity costs have also spiked given the longer pumping distance to Driefontein 3.
Depreciation
Depreciation charges were R270.4 million for fiscal year 2024 compared to R217.5 million for fiscal year 2023. Depreciation charges increased as a result of the commissioning of new reclamation sites at both Ergo and FWGR.
Change in estimate of environmental rehabilitation
As of June 30, 2024, we estimate our total environmental rehabilitation provision, being the discounted estimate of future costs, to be R616.8 million as compared to R562.1 million at June 30, 2023. A change in estimate of environmental rehabilitation of resulting in a R11.6 million decrease in the provision was recognized in profit or loss due to updated survey results on remaining historical spills at Ergo. The decrease was offset by a R34.7 million increase in the provision, recognised to the decommissioning asset, due to double digit inflationary increases on vegetation rates driven by higher machine hire rates and cost of lime. Additionally, the environmental rehabilitation unwound by R56.3 million for the fiscal year.
A total of R697.5 million (2023: R630.6 million) is invested in fixed income investment funds to secure financial guarantees provided to the DMRE through an insurance cell captive company, the Guardrisk Cell Captive. The increase is attributable to growth of R66.9 million on these funds during fiscal year 2024. As at June 30, 2024, guarantees amounting to R951.8 million were in issue to the DMRE (2023: R951.8 million). Any shortfall between the invested funds and the estimated provisions is expected to be financed by contributions to the Guardrisk Cell Captive from time to time as required over the remaining production life of the respective mining operations and, at the time of mine closure, the proceeds on the disposal of remaining assets and gold from plant clean-up.
Movements in gold in process
Movement in gold in process in fiscal year 2024 amounted to R34.8 million mainly due to an increase in the lock up of gold in process at the plants and finished inventories - Gold Bullion.
Administration expenses and general costs
Administration expenses and general costs increased by R26.4 million from R172.9 million in fiscal year 2023 to R199.3 million in fiscal year 2024, mainly as a result of inflationary increases, an increase in the short term incentive payments and long term incentive expenses.
Finance income
Finance income decreased from R334.3 million in fiscal year 2023 to R280.8 million in fiscal year 2024, mainly due to lower cash and cash equivalents as a result of significantly higher investment in capital expenditure during the year.
Finance expense
Finance expenses increased from R70.7 million in fiscal year 2023 to R76.4 million in fiscal year 2024, mainly attributable to unwinding of provision for rehabilitation of R56.3 million compared to R46.2 million in fiscal year 2023.
Income tax
Income tax amounted to a charge of R488.2 million for fiscal year 2024 (2023: charge of R405.0 million) and consists of a current tax charge of R99.7 million (2023: charge of R286.3 million) and a deferred tax charge of R388.5 million (2023: deferred tax charge of R118.7 million).
The current tax decreased to R99.6 million in fiscal year 2024 from R286.3 million in fiscal year 2023 mostly due to increased capital expenditure for which full capital redemption under section 36 of the Income Tax Act was applied. Although both operations had increased profitability during the year, the tax liability was offset by increased capital expenditure.
The forecast weighted average deferred tax rate of Ergo increased from 22% to 25% as result of an increase in profitability which was primarily driven by the increase in forecast gold prices and expected electricity savings from the solar power plant and battery energy storage system. The forecast weighted average deferred tax rate of FWGR remained at 29% for fiscal year 2024. Refer to Item 10E.: Taxation – “Income Tax and Withholding Tax on Dividends” for a detailed explanation on changes in taxation laws and regulations.
Non-IFRS Measures
Set forth below is a discussion of non-IFRS measures presented in this report, including a reconciliation of such measures from the nearest measure under IFRS, as well as an explanation as to why we believe that presentation of such information provides useful information to investors and additional purposes, if any, for which we use such measures.
Adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”)
Set forth below is a presentation of our Adjusted EBITDA, which is a non-IFRS measure, including the items included in this measure and a reconciliation from profit for the year. Our calculation of Adjusted EBITDA is based on the calculation of this measure as included in our RCF agreement, which was put in place during July 2024. The Group considers the presentation of Adjusted EBITDA as relevant to our investors as our holding company, Sibanye-Stillwater, who consolidates our results, discloses a similar non-IFRS measure to its investors. Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is not a measure of performance under IFRS and should be considered in addition to, and not as a substitute for, other measures of financial performance and liquidity.
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Year ended, June 30 |
| Reconciliation of adjusted EBITDA |
2024 |
2023 |
| Profit for the year |
1,328.7 |
1,281.4 |
| Income tax |
488.2 |
405.0 |
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|
| Profit before tax |
1,816.9 |
1,686.4 |
| Finance expense |
76.4 |
70.7 |
| Finance income |
(280.8) |
(334.3) |
| Results from operating activities |
1,612.5 |
1,422.8 |
| Depreciation |
270.4 |
217.5 |
Share based payment expense |
26.4 |
22.0 |
| Change in estimate of environmental rehabilitation recognised in profit or loss |
(11.6) |
(7.1) |
| Gain on disposal of property, plant and equipment |
(0.6) |
(10.3) |
IFRS 16 Lease payments |
(19.0) |
(16.9) |
| Exploration expenses and transaction costs |
6.8 |
4.6 |
Adjusted earnings before interest, tax depreciation and amortisation ("Adjusted EBITDA") 1 |
1,884.9 |
1,632.6 |
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1 See Glossary of Terms for definitions. |
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Cash operating costs, cash operating costs per kilogram, sustaining capital expenditure, all-in sustaining costs, growth capital expenditure and all-in costs per kilogram
Cash operating costs, cash operating costs per kilogram, sustaining capital expenditure, all-in sustaining costs, growth capital expenditure and all-in costs per kilogram are non-IFRS financial measures that should not be considered by investors in isolation or as alternatives to cost of sales, net profit/(loss) attributable to equity owners of the parent, profit/(loss) before tax and other items or any other measure of financial performance presented in accordance with IFRS or as an indicator of our performance. While the World Gold Council has provided guidance for the calculation of cash operating costs, cash operating costs per kilogram, all-in sustaining costs and all-in costs per kilogram as well as classification of capital expenditure between sustaining capital expenditure and growth capital expenditure, such measurements may vary significantly among gold mining companies, and these definitions by themselves do not necessarily provide a basis for comparison with other gold mining companies. However, we believe that these measures are useful indicators to investors and our management of an individual mine's performance and of the performance of our operations as a whole as they provide:
•an indication of a mine’s profitability and efficiency;
•the trend in costs;
•a measure of margin per kilogram, by comparison of the cash operating costs per kilogram to the price of gold; and
•a benchmark of performance to allow for comparison against other mines and mining companies.
For fiscal year 2024, consolidated cash operating costs per kilogram increased by 20% to R833,536 per kilogram from R697,382 per kilogram in fiscal year 2023. Consolidated all-in sustaining costs per kilogram increased by 14% to R946,848 per kilogram in fiscal year 2024 from R827,148 per kilogram in fiscal year 2023. Consolidated all-in costs per kilogram increased by 61% to R1,509,040 per kilogram of gold in fiscal year 2024 from R937,525 per kilogram of gold in fiscal year 2023.
The increase in consolidated cash operating costs per kilogram was mainly due to an increased in cash operating costs, due to the significant increase in contract reclamation costs and machine hire costs driven by the reclamation of material at clean-up sites at Ergo, as well as at FWGR which operated Driefontein 3 and Driefontein 5 simultaneously, one of which is a clean-up site. Furthermore, costs were aggravated at FWGR by an increase in reagent consumption driven by the increased acidity and coarser nature of material reclaimed from Driefontein 3. Electricity costs have also spiked given the longer pumping distance to Driefontein 3. The reduction in gold production also contributed to an increase in cash operating unit costs.
The increase in all-in sustaining costs per kilogram was mainly due to the increase in cash operating costs detailed above as well as a reduction in gold produced. The increase was moderated by a decrease in sustaining capex in fiscal year 2024 as sustaining capital expenditure decreased in fiscal year 2024 to R324.8 million from R476.3 million in fiscal year 2023. The increase in all-in costs per kilogram was due to increased cash operating costs as detailed above and a significant increase in non-sustaining capital expenditure from R554.6 million in fiscal year 2023 to R2,789.1 million in fiscal year 2024. Non-sustaining capital expenditure related to the construction of the solar power plant at Ergo and the early works of the RTSF construction at FWGR.
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| Reconciliation of cash operating costs, cash operating costs per kilogram, all-in sustaining costs, all-in sustaining costs per kilogram, all-in costs and all-in costs per kilogram |
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| R millions |
2024 |
|
|
2023 |
|
|
Cost of sales |
4,429.9 |
|
|
3,911.0 |
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| Depreciation |
(270.4) |
|
|
(217.5) |
|
|
Change in estimate of environmental rehabilitation recognised to profit or loss |
11.6 |
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|
7.1 |
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|
Movement in gold in process and finished inventories - Gold Bullion |
34.9 |
|
|
10.8 |
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| Operating costs |
4,206.0 |
|
|
3,711.4 |
|
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| Ongoing rehabilitation expenditure |
(16.1) |
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|
(26.8) |
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| Care and maintenance costs |
2.5 |
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|
(0.4) |
|
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| Other operating costs |
0.9 |
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|
3.9 |
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Cash operating costs 1 |
4,193.3 |
|
|
3,688.1 |
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| Movement in gold in process |
(34.9) |
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|
(10.8) |
|
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Administration expenses and other costs excluding non-recurring items 1 |
196.4 |
|
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172.2 |
|
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| Other operating costs |
(0.2) |
|
|
(3.4) |
|
|
| Change in estimate of environmental rehabilitation |
(11.6) |
|
|
(7.1) |
|
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| Unwinding of rehabilitation provision |
56.3 |
|
|
46.2 |
|
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Sustaining capital expenditure 1 |
324.8 |
|
|
476.3 |
|
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All-in sustaining costs 1 |
4,724.1 |
|
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4,361.5 |
|
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| Care and maintenance costs |
(2.5) |
|
|
0.4 |
|
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| Ongoing rehabilitation expenditure |
16.1 |
|
|
26.8 |
|
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| Exploration expenses and transaction costs |
2.0 |
|
|
0.2 |
|
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Growth capital expenditure 1 |
2,789.1 |
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554.6 |
|
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All-in costs 1 |
7,528.8 |
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4,943.5 |
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| Gold produced (kilograms) |
5,002 |
|
|
5,282 |
|
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| Cash operating costs per kilogram (R per kilogram) |
833,536 |
|
|
697,382 |
|
|
| All-in sustaining costs per kilogram (R per kilogram) |
946,848 |
|
|
827,148 |
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| All-in costs per kilogram (R per kilogram) |
1,509,040 |
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|
937,525 |
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| Reconciliation of sustaining capital expenditure and growth capital expenditure |
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| Additions - property, plant and equipment owned |
3,113.9 |
|
|
1,030.9 |
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| Less |
|
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|
Growth capital expenditure 1 |
2,789.1 |
|
|
554.6 |
|
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Sustaining capital expenditure 1 |
324.8 |
|
|
476.3 |
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1See Glossary of Terms for definitions. |
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Cash operating costs
Cash operating costs are linked directly to the level of throughput of a specific fiscal year.
The following table illustrates the year-on-year change in cash operating costs for fiscal year 2024 in comparison with fiscal year 2023.
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| R million |
Cash operating costs |
Impact of change in throughput |
Impact of change in costs |
Net change |
Cash operating costs |
| 2023 |
2024 |
| Ergo |
3,183.2 |
(226.3) |
614.1 |
387.8 |
3,571.0 |
| FWGR |
504.9 |
41.5 |
76.0 |
117.4 |
622.3 |
| Total |
3,688.1 |
(184.8) |
690.1 |
505.2 |
4,193.3 |
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Cash operating costs in fiscal year 2024 increased by R505.2 million to R4,193.3 million compared to cash operating costs of R3,688.1 million in fiscal year 2023.The increase in cash operating costs was mainly due to the significant increase in contract reclamation costs and machine hire costs driven by the reclamation of material at clean-up sites at Ergo, as well as at FWGR which operated Driefontein 3 and Driefontein 5 simultaneously, one of which is a clean-up site. Furthermore, costs were aggravated at FWGR by an increase in reagent consumption driven by the increased acidity and coarser nature of material reclaimed from Driefontein 3. Electricity costs have also spiked given the longer pumping distance to Driefontein 3.
The following table lists the major components of cash operating costs for the Group for each operation and fiscal year set forth below respectively:
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Ergo |
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FWGR |
|
Years ended |
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|
Year ended |
| Costs |
2024 |
2023 |
|
Costs |
2024 |
2023 |
| Consumables |
30 |
% |
32 |
% |
|
Consumables |
35 |
% |
35 |
% |
| Labor |
17 |
% |
18 |
% |
|
Labor |
18 |
% |
20 |
% |
| Electricity and water |
14 |
% |
17 |
% |
|
Specialized service providers |
18 |
% |
16 |
% |
| Specialized service providers |
23 |
% |
19 |
% |
|
Electricity and water |
6 |
% |
8 |
% |
| Machine hire |
5 |
% |
4 |
% |
|
Machine hire |
4 |
% |
3 |
% |
| Security expenses |
4 |
% |
4 |
% |
|
Security expenses |
5 |
% |
5 |
% |
| Other costs |
6 |
% |
6 |
% |
|
Other costs |
13 |
% |
14 |
% |
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5B. LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities
Cash generated from operating activities amounted to R1,845.2 million for fiscal year 2024 (fiscal year 2023: R1,655.6 million).
Cash generated from operating activities increased during fiscal year 2024 mostly due to a 20% increase in the average rand gold price received to R1,248,679 per kilogram and offset by a 20% increase in cash operating costs to R833,536 per kilogram. Net movement in working capital (changes in trade and other receivables, consumable stores and stockpiles and trade and other payables) amounted to a cash outflow of R123.8 million in fiscal year 2024.
The increase in cash inflows was also as a result of a R242.3 million decrease in current tax paid to R72.5 million.
Cash flows from investing activities
Net cash utilized by investing activities amounted to R3,042.6 million in fiscal year 2024 compared to R1,186.5 million in fiscal year 2023.
In fiscal year 2024, net cash utilized by investing activities consisted mainly of R2,985.7 million cash additions to property, plant and equipment, R33.8 million cash investment in the other funds and R23.4 million spent on environmental rehabilitation payments. These outflows were reduced by R0.3 million proceeds on the disposal of property, plant and equipment.
In fiscal year 2023, net cash utilized by investing activities consisted mainly of R1,145.2 million cash additions to property, plant and equipment, R28.4 million investment in other funds and R13.8 million spent on environmental rehabilitation payments. These outflows were reduced by R0.9 million proceeds on the disposal of property, plant and equipment.
Cash flows from financing activities
Net cash outflow from financing activities was R750.7 million in fiscal year 2024 compared to net cash outflows of R532.2 million in fiscal year 2023.
During fiscal year 2024, the net cash outflow consisted mostly of dividends paid on ordinary shares amounting to R731.7 million.
During fiscal year 2023, the net cash outflow consisted mostly of dividends paid on ordinary shares amounting to R515.3 million.
Cash and cash equivalents
Cash and cash equivalents as at June 30, 2024 amounted to R521.5 million compared to R2,471.4 million at the end of fiscal year 2023. Substantially all of our cash and cash equivalents balances were denominated in South African rand. Cash and cash equivalent denominated in foreign currency amounted to USD nil million at June 30, 2024 compared to USD 3.7 million at the end of fiscal year 2023.
Cash and cash equivalents as at June 30, 2024 includes restricted cash related to guarantees of R12.3 million compared to R11.4 million at the end of fiscal year 2023.
At September 30, 2024, our cash and cash equivalents were R594.2 million.
Borrowings and funding
At June 30, 2024 and September 30, 2024, we had no external sources of capital. To fund the significant capital expansion programme at both operations, on June 28, 2024, DRDGOLD secured a R500 million general bank facility ("GBF") with Nedbank. The facility remained undrawn at 30 June 2024. In addition to the GBF, on 31 July 2024, DRDGOLD entered into a 5-year R1 billion RCF with a R500 million accordion option with Nedbank.
Anticipated funding requirements and sources
Our cash and cash equivalents are set out above under “Cash and cash equivalents”. Management believes that existing cash resources, existing bank facilities, net cash generated from operations and long term finance options available for long term capital projects will be sufficient to meet the anticipated commitments of our existing operations for fiscal year 2025 which expected to be approximately R3.5 billion pertaining to the RTSF, DP2 expansion at FWGR and the solar power project at Ergo. As a result of the sustained high rand gold price, at September 30, 2024 the Group has a cash and cash equivalents balance of R594.2 million after paying a final dividend of R172.3 and incurring capital expenditure of R323.3 million during the first quarter of fiscal year 2024. Liquidity has been enhanced by the continued high rand gold price levels.
5C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
DRDGOLD has a dedicated team that looks at ways and means of improving recoveries. While the team remains active with an ongoing focus on improving extraction efficiencies, the projects undertaken during the year ended June 30, 2024 were focused on optimizing the existing facilities rather than implementing new technologies to improve extraction efficiencies. We have no registered patents or licenses.
5D. TREND INFORMATION
Any sustained decline in the market price of gold from the current elevated gold price levels would adversely affect us, and any decline in the price of gold below the cost of production could result in the closure of some or all of our operations which would result in significant costs and expenditure, such as, incurring retrenchment costs earlier than expected which could lead to a decline in profits, or losses. In addition, as most of our production costs are in rands, while gold is sold in dollars and then converted to rands, our results of operation and financial condition have been and could be in the future materially affected by an appreciation in the value of the rand. Accordingly, any sustained decline in the dollar price of gold and/or the strengthening of the South African rand against the dollar would negatively and adversely affect our business, operating results and financial condition.
For the fiscal year 2025, we are planning Group gold production of between 155,000 (4,821kg) to 165,000 (5,132kg) ounces at a cash operating unit cost of approximately R870,000 per kilogram and expect a capital investment of approximately R3.5 billion.
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| Reconciliation of budgeted cost of sales to budgeted cash operating costs (R’million) |
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Cost of sales |
4,671.1 |
Reconciling items 1 |
(366.7) |
Cash operating costs 2 |
4,304.4 |
1Includes expected depreciation of R313.5 million, ongoing environmental expenses of R51.2 million and care and maintenance expenses of R2.0 million
2 See glossary of terms for definition
Rounding of figures may result in computational discrepancies
Our ability to meet the full year’s production target could be impacted in a number of ways, including stoppages in production due to power interruptions and other risks (refer Item 3D. Risk Factors—Risks related to our business and operations and “–Forward Looking Statements”). We are also subject to cost pressures in the event of above inflation increases in labor, key consumables, diesel, steel and cyanide. Unforeseen changes in ore grades and recoveries, unexpected changes in the quality or quantity of reserves and resource, technical production issues, environmental and industrial accidents, gold theft, environmental factors and pollution could adversely impact the production, sales and cash operating costs for fiscal year 2025 and cause us to fail to meet our targets for the year.
Refer to Item 5A.: “Key drivers of our operating results and principal factors affecting our operating results” for a discussion of the trends in the US Dollar gold price as well as exchange rates impacting our business.
Set forth below is our summary results for the first quarter of fiscal year 2025. This information has not been audited or reviewed.
Operating results for the quarter ended September 30, 2024
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Quarter ended |
Quarter ended |
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September 30, 2024 |
June 30, 2024 |
% change |
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Production |
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Gold produced |
kg |
1,319 |
1,228 |
7 |
% |
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oz |
42,407 |
39,481 |
7 |
% |
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Gold sold |
kg |
1,289 |
1,236 |
4 |
% |
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oz |
41,442 |
39,738 |
4 |
% |
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Ore milled |
Metric (000't) |
6,547 |
5,773 |
13 |
% |
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Yield |
Metric (g/t) |
0.201 |
0.213 |
(5 |
%) |
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Reconciliation of adjusted EBITDA (R'million) |
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Profit for the period |
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462.4 |
412.4 |
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Income and deferred tax |
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121.3 |
171.1 |
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Profit before tax |
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583.7 |
583.5 |
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Finance expense |
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17.9 |
24.3 |
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Finance income |
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(39.4) |
(65.8) |
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Results from operating activities |
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562.2 |
542.0 |
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Depreciation |
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113.5 |
54.3 |
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Share based payment expense |
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6.7 |
4.5 |
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Change in estimate of environmental rehabilitation recognised in profit or loss |
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— |
(11.6) |
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Gain on disposal of property, plant and equipment |
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— |
0.7 |
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IFRS 16 Lease payments 1 |
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(3.7) |
(5.7) |
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Exploration expenses and transaction costs |
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2.1 |
(0.4) |
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Adjusted EBITDA 1,2* |
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680.8 |
583.8 |
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1 The amended RCF includes IFRS 16 lease payments in the calculation of the adjusted EBITDA |
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2 See Glossary of Terms for definitions. |
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* The adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is not a measure of performance under IFRS and should be considered in addition to, and not as substitute for other measures of financial performance and liquidity |
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Reconciliation of cash operating costs, cash operating costs per kilogram, all-in sustaining costs, all-in sustaining costs per kilogram, all-in costs and all-in costs per kilogram (R'millions) |
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Cost of sales |
|
1,236.2 |
1,146.2 |
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Depreciation |
|
(113.5) |
(54.3) |
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Change in estimate of environmental rehabilitation |
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— |
11.6 |
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Movement in gold in process |
|
45.1 |
(16.7) |
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Operating costs |
|
1,167.8 |
1,086.8 |
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Ongoing rehabilitation expenditure |
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(5.2) |
(6.0) |
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Care and maintenance costs |
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0.2 |
2.6 |
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Other operating income/(costs) |
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(13.4) |
(0.4) |
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Cash operating costs 1 |
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1,149.4 |
1,083.0 |
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Movement in gold in process |
|
(45.1) |
16.7 |
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Administration expenses and other costs excluding non-recurring items 1 |
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44.7 |
40.1 |
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Other operating (income)/Costs |
|
0.7 |
0.6 |
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Change in estimate of environmental rehabilitation |
|
— |
(12.0) |
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Unwinding of rehabilitation provision |
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15.6 |
13.7 |
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Sustaining capital expenditure 1 |
|
38.1 |
72.3 |
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All-in sustaining costs 1 |
|
1,203.4 |
1,214.4 |
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Care and maintenance costs |
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(0.2) |
(2.6) |
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Ongoing rehabilitation expenditure |
|
5.2 |
6.0 |
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Exploration expenses and transaction costs |
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1.4 |
2.0 |
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Growth capital expenditure 1 |
|
275.6 |
2,001.1 |
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All-in costs 1 |
|
1,485.4 |
3,220.9 |
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Quarter ended |
Quarter ended |
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September 30, 2024 |
June 30, 2024 |
% change |
|
Price and costs |
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Average gold price received |
|
R per kg |
1,427,503 |
1,395,607 |
2 |
% |
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US$ per oz |
2,471 |
2,339 |
6 |
% |
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Cash operating costs |
|
R/t |
176 |
188 |
(6 |
%) |
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US$/t |
10 |
10 |
— |
% |
|
Cash operating costs |
|
R per kg |
856,723 |
889,736 |
(4 |
%) |
|
|
|
US$ per oz |
1,483 |
1,491 |
(1 |
%) |
|
All-in sustaining costs ** |
|
R per kg |
933,686 |
982,448 |
(5 |
%) |
|
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US$ per oz |
1,616 |
1,646 |
(2 |
%) |
|
All-in cost ** |
|
R per kg |
1,152,406 |
2,605,836 |
(56 |
%) |
|
|
|
US$ per oz |
1,995 |
4,367 |
(54 |
%) |
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Capital expenditure |
|
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Sustaining |
|
Rm |
38.1 |
72.3 |
(47) |
% |
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US$m |
2.1 |
3.9 |
(46) |
% |
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Non-sustaining/growth |
|
Rm |
275.6 |
2,001.1 |
(86) |
% |
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US$m |
15.3 |
107.8 |
(86) |
% |
|
Average R/US$ exchange rate |
|
|
17.97 |
18.56 |
(3) |
% |
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Reconciliation of sustaining capital expenditure |
|
|
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|
|
Additions - property, plant and equipment owned |
|
|
313.7 |
2,073.4 |
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Less |
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|
Growth capital expenditure 1 |
|
|
275.6 |
2,001.1 |
|
|
Sustaining capital expenditure 1 |
|
|
38.1 |
72.3 |
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1 See Glossary of Terms for definitions. |
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Rounding of figures may result in computational discrepancies
** All-in cost definitions based on the guidance note on non-GAAP Metrics issued by the World Gold Council on 27 June 2013.
Gold production increased by 7% from the previous quarter to 1,319kg primarily due to a 13% increase in tonnage throughput despite yield being 0.012g/t lower at 0.201g/t. Gold sold increased by 53kg to 1,289kg.
Cash operating costs per kilogram of gold sold decreased by 4% from the previous quarter to R856,723/kg due to an increase in gold sold, despite an increase in total cash operating costs driven mainly by two months of winter tariffs which Eskom charges between June and August each year. Cash operating costs per tonne of material decreased by 6% from the previous quarter to R176/t due to the increase in tonnage throughput. The number of mechanically reclaimed sites (clean-up sites) which are more costly to operate compared to hydro mining, have started to reduce. This reduction is expected to continue, resulting in a decreasing cost profile over the remainder of the fiscal year ending June 30, 2025. Additional decreases in costs are expected as the solar power plant and battery energy storage system, the construction of which is completed, is expected to be fully commissioned during the second quarter of fiscal year 2025.
All-in sustaining costs per kilogram was R933,686/kg, decreasing quarter on quarter mainly due to the decrease in cash operating costs per kilogram as well as the decrease in sustaining capital expenditure. All-in costs per kilogram was R1,152,406/kg, decreasing quarter on quarter mainly due to a decrease in growth capital expenditure in comparison to the previous quarter when the BESS for the solar power plant was purchased.
Adjusted EBITDA increased by 17% from the previous quarter to R680.8 million primarily due to the increased gold sold and the accompanying higher gold price received.
Cash and cash equivalents increased by R72.7 million to R594.2 million as at September 30, 2024 (June 30, 2024: R521.5 million) after paying the final cash dividend of R172.3 million for the year ended June 30, 2024 and capital expenditure (including prepayments towards capital items) of R323.3 million incurred for the first quarter of fiscal year 2025.
5E. CRITICAL ACCOUNTING ESTIMATES
For more information on environmental rehabilitation obligations Note 2 - “Use of accounting assumptions, estimates and judgements” under Item 18. “Financial Statements".
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6A. DIRECTORS AND SENIOR MANAGEMENT
Directors and Executive Officers
Our board of directors may consist of not less than four and not more than twenty directors. As at June 30, 2024, our board consisted of nine directors.
In accordance with the JSE listing requirements and our Memorandum of Incorporation, or MOI, one third of the directors comprising the board of directors, on a rotating basis, are subject to re-election at each annual general shareholders’ meeting. Additionally, all directors are subject to election at the first annual general meeting following their appointment. Retiring directors normally make themselves available for re-election.
The address of each of our Executive Directors and non-executive directors is the address of our principal executive offices. Refer to Item 4A. Information on the Company – Introduction for the company’s address.
Executive Directors
Niël Pretorius (57) (BProc, LLB, LLM)
Chief Executive Officer.
•Member: Risk Committee
Niël Pretorius has 25 years of experience in the mining industry. He was appointed CEO designate of DRDGOLD on 21 August 2008 and CEO on 1 January 2009. Having joined the company on 1 May 2003 as legal advisor, he was promoted to Group Legal Counsel on 1 September 2004 and General Manager: Corporate Services on 1 April 2005. Niël was appointed as CEO of Ergo Mining Operations (formerly DRDGOLD SA) on 1 July 2006 and became Managing Director on 1 April 2008. Niël also serves as an elected board member of the Minerals Council South Africa and the World Gold Council.
Riaan Davel (48) (BCom (Hons), MCom, CA (SA))
Chief Financial Officer.
•Member: Social and Ethics Committee
Riaan Davel joined DRDGOLD in January 2015, before which he gained 17 years’ experience in the professional services industry, the majority obtained in the mining industry in Africa. As part of his experience, Riaan provided assurance and advisory services, including support and training on International Financial Reporting Standards (IFRS) to clients and teams across the African continent. As Chief Financial Officer, he is playing an important role in directing DRDGOLD’s strategic growth so that environmental impact is delivered in tandem with value for the Company, its shareholders, as well as society as a whole. The DRDGOLD Annual Integrated Report, which Riaan oversees, has been ranked in the “Excellent” category at the EY Excellence in Integrated Reporting Awards for the fourth consecutive time in September 2024. Riaan is a nominee for the CFO of the Year at the CFO Awards 2024.
Non-executive Directors
Tim Cumming (66) (BSc (Hons) (Civil Engineering), MA (Philosophy, Politics and Economics))
Non-executive Chairman
•Chairman: Board
•Chairman: Nominations Committee
•Member: Risk Committee; Remuneration Committee and Investment Committee
Timothy (Tim) Cumming was appointed to the DRDGOLD Board on 1 August 2020 and was appointed as non-executive Chairman of the DRDGOLD Board and Chairman of the Nominations Committee on 1 December 2021. He is also an independent non-executive director of Sibanye-Stillwater Limited, Nedgroup Investments Limited and Sasol Limited, and serves as non-executive Chairman of Riscura Holdings Limited.
His career spans mining, financial services and consulting. He is the founder of Scatterlinks Proprietary Limited, a South African-based company providing leadership development and advisory services to senior business executives.
Tim started out as an engineer at the Anglo American Corporation of South Africa Limited working on a number of gold and diamond mines including involvement in the geo-technical design of the Ergo tailings facility. Thereafter he held senior roles in financial services including General Manager at Allan Gray Limited, Head of Investment Research at HSBC Securities (SA), CEO of Old Mutual Asset Managers and MD of various divisions within the Old Mutual Group.
Other involvements include Chairmanship of the Mandela Rhodes Foundation’s Investment Committee and the Woodside Endowment Trust.
Edmund Jeneker (62) (Chartered Director (SA), B Hons, IEDP, M.Inst.D., SAIPA)
Lead Independent Non-executive Director
•Chairman: Social and Ethics Committee
•Member: Remuneration Committee and Nominations Committee
Edmund Jeneker was appointed non-executive director in November 2007 and lead independent non-executive director in August 2017. He has more than 31 years’ experience as an executive in banking, business strategy, advisory and management at Grant Thornton South Africa Proprietary Limited, Swiss Re Corporate Solutions Advisors South Africa Proprietary Limited, the World Bank Competitiveness Fund and Deloitte South Africa. He completed almost 15 years at Absa Bank and Barclays Africa Group, where he was managing executive and served as director on the boards of several subsidiaries in the Absa and Barclays Africa Group.
Edmund is active in community social upliftment and served as a member of the Provincial Development Commission of the Western Cape Provincial Government. He currently serves on the Advisory Board of Global Competent Boards (Canada), Social and Ethics Forum of the Institute of Directors Southern Africa, Chairman of the Suidoosterfees NPC and The Cape Philharmonic Orchestra. He is a Certified ESG and Climate Change Competent Director and Chartered Director (SA).
Johan Holtzhausen (78) (BSc (Geology and Chemistry),
BCompt (Hons), CA (SA)
Independent Non-executive Director
•Chairman: Audit Committee
•Member: Remuneration Committee; Nominations Committee and Investment Committee
Johan Holtzhausen was appointed as an independent non-executive director on 25 April 2014. With more than 43 years’ experience in the accounting profession, he served as a senior partner at KPMG Services Proprietary Limited. His clients included major corporations listed in South Africa, Canada, the UK as well as Australia and the United States.
Johan chairs the Audit and Risk Committee of Tshipi é Ntle Manganese Mining Proprietary Limited. He is a non-executive director of Caledonia Mining Corporation Plc, a Jersey corporation listed in the United States and the United Kingdom, and he chairs its Audit and Risk Committee.
Jean Nel (52) (BAcc (Hons), CA (SA), CFA (AIMR))
Independent Non-executive Director
•Chairman: Remuneration Committee and Investment Committee
•Member: Audit Committee and Risk Committee
Jean Nel was appointed as an independent non-executive director on 30 November 2018. He qualified as a CA(SA) in 1998 and obtained the CFA (AIMR) qualification. Jean has in excess of 20 years’ experience in mining finance and mining executive and operational management. He was appointed to the Aquarius Platinum Board in April 2012 and became CEO of the Group in November 2012, a position he held until Aquarius Platinum was acquired by Sibanye-Stillwater in April 2016. From April 2016 to January 2017, Jean was the CEO of the Platinum division of Sibanye-Stillwater. He is currently a non-executive director of Mimosa Investments which owns the Mimosa platinum mine in Zimbabwe.
Thoko Mnyango (59) (Dip Juris, BJuris)
Independent Non-executive Director
•Member: Social and Ethics Committee; Nominations Committee and Remuneration Committee.
Thoko Mnyango was appointed as an independent non-executive director on
1 December 2016. Thoko’s career took off as a prosecutor for the KaNgwane homeland, before becoming a legal advisor for the Eastern Cape Development Corporation. Her experience in the corporate world is vast and spans over 30 years. Thoko has been in executive positions at Gijima Technologies since its inception until 2011. She has held directorships on various company boards including Gijima, EOH Mthombo Proprietary Limited, AllPay Eastern Cape Proprietary Limited, a subsidiary of Absa Limited, and the Ryk Neethling Foundation. Thoko is known as a specialist in business development and bridging the gap between the public and private sectors. Currently she holds the position of CEO of Vitom Holdings Pty (Ltd) and Vitom Brands Communication (Pty) Ltd, since 2010. Thoko is known in both the private and public sectors as a staunch advocate for transformation. Her passion for transformation began in the late 80s when she worked for a Johannesburg based NGO which focused on community development.
Prudence Lebina (43) (BCom, Higher Diploma (Accounting), Certificate in Business Leadership, CA (SA))
Independent Non-executive Director
•Chairperson: Risk Committee
•Member: Audit Committee, Investment Committee and Nominations Committee
Prudence Lebina was appointed independent non-executive director on 3 May 2019. She's a chartered accountant with over 20 years' working experience in corporate finance, business development, financial reporting and stakeholder management in the mining and financial services sectors.
Prudence is CEO of TriAlpha Investment Management Proprietary Limited, a specialist fixed income investment house managing local and international fixed income portfolios for institutional clients. She was previously CEO and Interim Finance Director of Mahube Infrastructure Limited (previously GAIA Infrastructure Capital Limited) listed on the Main Board of JSE Limited. Prudence is also an independent non-executive of Growthpoint Properties Limited and Telkom SA SOC Limited.
Charmel Flemming (41) (BAcc (Hons), CA (SA))
Independent Non-executive Director
•Member: Audit Committee; Risk Committee and Social and Ethics Committee
Charmel Flemming, appointed as an independent non-executive director on 1 August 2020 is the Founder and CEO of FTwelve, a boutique cloud-based accounting firm. She previously held positions at Acorn Agri & Food Limited, MixTelematics, KPMG and De Beers. At the latter, she served as a non-executive director for Acorn Agri & Food Limited and MixTelematics and as a trustee on the boards of both the De Beers Benefit Society Medical Aid and De Beers Pension Fund from 2014 to 2018. She is a qualified Chartered Accountant and non-executive director serving on JSE-listed boards and an advocate for diversity in the financial industry and inclusivity in the boardroom.
Senior Management and Prescribed Officers
Jaco Schoeman (50) (National Diploma (Analytical Chemistry), BTech (Analytical Chemistry))
Chief Operating Officer
Jaco Schoeman joined DRDGOLD in 2011 as Executive Officer: Business Development to focus on expanding the group’s surface retreatment business and extracting maximum value from existing resources. In July 2014, he was appointed as an Executive Director of Ergo Mining Operations Proprietary Limited.
Shalin Naidoo (47) (BTech, MBA, Masters in Digital Business, MIT Applied Data Science)
Chief Information and Technology Officer
Shalin Naidoo joined DRDGOLD as Chief Information and Technology Officer on 2 November 2020. Ranked amongst South Africa’s Top 8 Visionary CIOs by the institute of IT Professionals in South Africa (IITPSA) and International Data Corporation CIO of the Year. He has over 13 years’ experience in leadership and strategy. He has worked previously in the platinum, gold and titanium dioxide mining sectors.
Henry Gouws (55) (National Higher Diploma (Extraction Metallurgy), MDP. EPD)
Head of Operations
Henry has over 35 years’ experience in the mining industry having served in managerial positions at Crown and Ergo. He graduated from Technikon Witwatersrand and obtained a National Diploma in Extraction Metallurgy in 1990 and a National Higher Diploma in Extraction Metallurgy in 1991. He completed a Management Development Programme in 2003 through Unisa School of Business Leadership and an Executive Development Programme in 2012 through the University of Stellenbosch Business School. Henry Gouws was promoted to Head of Production for DRDGOLD on 1 January 2024 with the responsibility to oversee the group’s production performance. He currently serves as a Director of Ergo and other DRDGOLD subsidiaries.
Refiloe Vengeni (35) (Admitted Attorney of the High Court of South Africa, LLB, BCom)
Legal Counsel
Refiloe Vengeni was appointed as DRDGOLD’s legal counsel in November 2022. She is an admitted attorney of the High Court of South Africa with ten years’ experience in the legal field, of which eight years was dedicated to the mining sector. Refiloe has practised law at various multidisciplinary law firms specialising in mining law.
Kevin Kruger (56) (BscEng (Mechanical Engineering), MDP, PMD, Government Certificate of Competency (Mines))
Head of Technical Services
Kevin Kruger has 34 years of experience in the mining industry in Africa. Kevin graduated from the University of Witwatersrand at the end of 1989 obtaining his BSc (Mechanical Engineering) and his government certificate of Competency (mines) during 1993. On 1 June 2024, Kevin was promoted to Head of Technical Services DRDGOLD responsible for the major group projects execution. Kevin previously was the Managing Director of FWGR, Technical Director for Ergo and held other engineering manager positions throughout his career. Kevin currently serves as a Director of FWGR.
Henriette Hooijer (44) (BCom (Hons), CA(SA))
General Manager Finance
Henriette Hooijer was promoted to the Group's General Manager: Finance on 1 June 2024 and is responsible for the financial and fiscal management of the group’s operations. She joined DRDGOLD in May 2016 and was appointed as Financial Director of FWGR in August 2018. Her career spans over 19 years, which 11 years was spent in the professional services industry at KPMG, performing, inter alia, audits of listed companies in the mining industry, including SEC registrants. Henriette currently serves as a Director of Ergo and FWGR.
Kgomotso Mbanyele (43) (ACG)
Company Secretary
Kgomotso Mbanyele was appointed as the Company Secretary of DRDGOLD on 25 October 2023. She has over 15 years' experience working in the company secretarial field, with over 12 years of these in the mining industry. Kgomotso previously was the assistant group company secretary of Sibanye-Stillwater Limited. She is a qualified Associate Company Secretary with the Chartered Governance Institute of Southern Africa.
There are no family relationships between any of our non-executive directors, executive directors or members of the group executive and senior management. There are no arrangements or understandings between any of our directors or executive officers and any other person by which any of our directors or executive officers has been so elected or appointed. Furthermore, none of the non-executive directors, executive directors, group executive and senior management members or other key management personnel are elected or appointed under any undertaking by, arrangement or understanding with any major shareholder, customer, supplier or otherwise.
6B. COMPENSATION
Our MOI provide that the directors' fees should be determined from time to time in a general meeting or by a quorum of Non-Executive Directors. The total amount of directors' remuneration paid and or accrued for the year ended June 30, 2024 was R38.9 million.
Non-Executive Directors received the following annual fees for fiscal year 2024:
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Fee per annum up to December 31, 2023 |
Fee per annum up to December 31, 2024 |
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R |
R |
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Chairman of the Board 1 |
1,575,000 |
|
1,669,500 |
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Lead Independent Director 1 |
892,500 |
|
946,050 |
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NEDs |
451,500 |
|
478,590 |
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Audit Committee chairman 2 |
189,000 |
|
200,340 |
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|
Audit Committee member |
147,000 |
|
155,820 |
|
|
Committee chairman 2,3 |
126,000 |
|
133,560 |
|
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Risk Committee and Remuneration Committee member |
105,000 |
|
111,300 |
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Nominations Committee and Social and Ethics Committee member |
94,500 |
|
100,170 |
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Investment Committee Chair - ad hoc fee per meeting |
25,000 |
|
26,500 |
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Investment Committee member - ad hoc fee per meeting |
37,000 |
|
39,220 |
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Ad hoc fee applicable for additional special meetings 4 |
25,000 |
|
26,500 |
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1 Fees per annum for the Chair of the Board and the Lead Independent Director are all-inclusive fees i.e. they will not receive Committee membership fees nor will they receive ad hoc fees in the event of additional special meetings required or as members of the Investment Committee.
2 This per annum fee is inclusive of both the NED's role as Chair of the Committee and as a member.
3 Per annum fees applicable for the Chairs of all Committees except the Audit Committee.
4 Ad hoc fees for additional work by a NED is only payable in out of the ordinary circumstances.
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The following table sets forth the compensation for our directors and prescribed officers for the year ended June 30, 2024. |
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The disclosure detailed in this table is consistent with the disclosure requirements of the Companies Act, 2008 (Act 71 of 2008) and the JSE Listings Requirements. |
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Directors / Prescribed Officers |
Total remuneration recognised during the year |
Short-Term Incentives recognised related to this cycle |
Discretionary Short-Term Incentives related to this cycle(1) |
Long-term Incentives settled during this cycle |
Other payments (4) |
Total remuneration related to this cycle |
|
R'000 |
R'000 |
R'000 |
R'000 |
|
R'000 |
|
Executive directors |
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|
|
|
|
|
|
D J Pretorius |
8,350 |
8,062 |
648 |
2,830 |
— |
19,890 |
|
A J Davel |
5,279 |
4,982 |
401 |
1,370 |
— |
12,032 |
|
|
13,629 |
13,044 |
1,049 |
4,200 |
— |
31,922 |
|
Non-executive directors |
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|
|
|
|
|
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T J Cumming |
1,713 |
— |
— |
— |
— |
1,713 |
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E A Jeneker |
971 |
— |
— |
— |
— |
971 |
|
J A Holtzhausen |
865 |
— |
— |
— |
— |
865 |
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T B V N Mnyango |
811 |
— |
— |
— |
— |
811 |
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J J Nel |
902 |
— |
— |
— |
— |
902 |
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K P Lebina |
891 |
— |
— |
— |
— |
891 |
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C D Flemming |
845 |
— |
— |
— |
— |
845 |
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|
6,998 |
— |
— |
— |
— |
6,998 |
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Prescribed officers (2) |
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|
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W J Schoeman |
5,149 |
4,982 |
401 |
1,370 |
— |
11,902 |
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E Beukes (3) |
129 |
— |
— |
— |
1,333 |
1,462 |
|
|
5,278 |
4,982 |
401 |
1,370 |
1,333 |
13,364 |
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Total |
25,905 |
18,026 |
1,450 |
5,570 |
1,333 |
52,284 |
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(1) Awarded after June 30, 2024 |
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(2) The Companies Act, 2008 (Act 71 of 2008), under section 30, requires the remuneration of prescribed officers, as defined in regulation 38 of Company Regulations 2008, to be disclosed with that of directors of the company. A person is a prescribed officer if they have general executive authority over the company, general responsibility for the financial management or management of legal affairs, general managerial authority over the operations of the company or directly or indirectly exercise or significantly influence the exercise of control over the general management and administration of the whole or a significant portion of the business and activities of the company.
During 2024 DRDGOLD determined that the members of the Executive Committee ("EXCO") comprise of the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, and that the Company Secretary no longer forms part of the EXCO.
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(3) Resigned July 31, 2023 |
(4) Other payments include encashed leave and gratuity payments |
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Also see Item 6E. Share Ownership for details of share options held by directors. |
Compensation of key management
Refer to Item 18. ‘‘Financial Statements – Note 19.2 – Directors' and prescribed officers' emoluments’’ for the total compensation paid to key management (including executive and non-executive directors as well as prescribed officers).
The Group applies a pool-based Short-Term Incentive scheme, based on modified free cash flow, because it drives a strong teamwork culture with all participants working primarily towards a single goal, maximising free cash flow which is an easy measure to understand. Salient features of the short-term incentive scheme are as follows:
• Participants include the executive directors, prescribed officers and senior management.
• The pool is calculated as 15% of the adjusted Free Cash Flow with 90% of the pool accruing to employees achieving a satisfactory performance rating;
• 10% of the pool is available for allocation at the discretion of the remuneration committee as recommended by the executive committee which provides the ability to recognise exceptional discretionary effort;
• A production modifier that can modify the pool upwards as well as downwards based on gold produced measured against budget;
• A safety and a fatality modifier, both supporting the Company’s strong commitment to its strategy of a renewed focus on employee safety, development, values and wellbeing; and
• The individual performance moderator model has been expanded to include employee performance ratings between 2 and 3 to participants in the STI scheme on a broader sliding scale set out below:
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Individual performance rating |
Individual performance modifier |
< 2 |
(100%) |
2 to 2.24 |
(80%) |
2.25 to 2.49 |
(60%) |
2.5 to 2.74 |
(40%) |
2.75 to 2.99 |
(20%) |
| >= 3 |
0% |
Performance measures
The STI is funded out of a pool created from the Adjusted Free Cash Flow (“Adjusted FCF”) generated by DRDGOLD in the financial year:
• Adjusted FCF is defined for the performance measure as cash generated from operations, less capital expenditure (“Capex”), and tax. In the budgeting process, if the Group believes that any Capex, Investment or other item/s should be excluded or amortised or treated in any different way for determining Adjusted FCF at the end of the year, they may make representations to the Remuneration Committee on the treatment of such item/s for the purposes of calculating Adjusted FCF for purposes of the STI pool. Remco has absolute discretion in approving the treatment of such items;
• The STI Pool is modified as per the Tables below.
Modifiers of the incentive pool
To drive strategic initiatives, the short-term incentive pool is modified by up to 20% for isolated non-achievements of targets and up to 50% for systemic or repetitive non-compliance. The modifiers are approved by the Remuneration Committee. These strategic initiatives and their measures are assessed at the beginning of each financial year to ensure that current strategies are driven in that year. These strategic modifiers and their weightings are communicated to participants at the beginning of each financial year to ensure understanding and compliance.
The Group performance measures set out by the Remuneration Committee and the weightings for FY2024 are as follows:
Strategic Initiatives Modifiers
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Environmental |
4% |
Safety |
4% |
Social development |
4% |
Labor development |
4% |
transformation |
4% |
Fatality Modifier
• Up to 25% per fatality, depending on the degree of culpability of the company, as assessed by the Remuneration Committee.
• If the fatality/ies is/are as a result of a breakdown in or disregard for a safety culture, the STI Pool can be modified by up to 100% at the Remuneration Committee’s discretion.
Production Modifier
The calculated STI Pool may be modified, upwards or downwards, based upon gold (kg) produced measured against budget, as follows:
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Gold (Kg) Produced: |
STI |
% of budget |
Pool Adjustment |
<93% |
-10% |
39% to <97% |
-5% |
97% to <103% |
0% |
103% to <107% |
+5% |
≥107% |
+10% |
Distribution of the Incentive pool
The STI pool, after any moderation, will be distributed as follows:
• 90% formulaically, pro-rata to each individual’s “% of STI Pool” (capped to each individuals all-inclusive package for the fiscal year) taking inter alia the following factors into account:
• All-inclusive package of the individual for the financial year;
• Market-related STI quanta applicable to the Category;
• The level of accountability and responsibility of the role of the individual.
• 10% on a discretionary basis allocated by the Executive Committee after recommendations from line management. The Remuneration Committee will approve any allocations from the 10% discretionary pool to Executive Committee members.
Distributions are moderated for individual performance as follows:
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Individual performance rating |
Modifier % |
< 2 |
(100%) |
2 to <2.25 |
(80%) |
2.25 to <2.5 |
(60%) |
2.5 to <2.75 |
(40%) |
2.75 to <3 |
(20%) |
| >= 3 |
0% |
In order to be able to reward exceptional individual performance appropriately, the formulaic plus discretionary allocations may exceed this amount which is capped to the all-inclusive remuneration for the fiscal year, but these instances, if any, would be subject to the Executive Committee’s and ultimately the Remuneration Committee’s approval.
Further considerations for the CEO and CFO
For the CEO and CFO (“executive directors”) the formulaically calculated STI amounts will be reviewed by the Remuneration Committee, who has absolute discretion to further modify the STI amounts, upwards or downwards:
• If compelling, exceptional and objective circumstances warrant such application of discretion; and
• To ensure that the STI amounts awarded are balanced and equitable.
Executive Directors’ STI amounts may be settled in a combination of cash and DRDGOLD shares (deferred bonus shares), with Remco having discretion to make up to 40% of the award in deferred bonus shares.
Deferred Bonus Shares will vest / be released to the Executive Directors as follows:
• 50% after 9 months;
• 50% after 18 months.
The following provisions apply to the deferred bonus shares:
• The Executive Director needs to be in active service and not under notice of resignation on the vesting dates in order to be eligible to receive the deferred bonus shares and any dividends accrued thereon; and
• The deferred bonus shares carry voting and dividend rights; however, the dividends will accrue and will only be paid out upon the vesting / release of the shares to which the dividends relate.
New single incentive plan
To remain aligned with the latest developments in remuneration policy and to stay current with the demands of governance as well as remain competitive within the industry, the Remuneration Committee conducted a review of the current short-term and long-term incentive schemes, with the assistance of external independent advisors. The outcome of the review informed the introduction of a new simplified, Single Incentive Plan incorporating a deferred share plan, intended to replace the existing scheme in fiscal year 2025. The new plan was subject to and approved by the shareholders at the 2023 AGM.
The Single Incentive Plan recognises the difficulties in setting stretched but realistic performance targets in a volatile economic environment. Its aim is to move beyond measurement criteria, which is focused chiefly on inflexible financial performance and give balanced weightings to financial and non-financial measures to ensure executives and senior management are held to appropriate pay-for-performance standards without being penalised unduly for factors outside their control.
The Remuneration Committee has approved and recommended for approval by the Board, the principles of the Single Incentive Plan which consists of a Single Incentive Policy ("Policy") and a Deferred Share Plan ("DSP").
Salient features of the DRDGOLD single incentive policy
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| Single incentive plan |
| Components and determination:
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Single Incentive = Free Cash Flow Portion + Scorecard Portion
whereby:
Free Cash Flow Portion = free cash flow for the relevant financial year x 10% x personal share*.
Scorecard Portion = personal cost-to-company x scorecard on-target percentage x performance multiplier.
*The personal share of the Free Cash Flow pool is capped at 50% of cost to Company for Executive Directors and Prescribed Officers and 67% for participants in D Lower to F Lower bands. Personal share is determined jointly by the Chief Executive Officer and the Chief Financial Officer and approved by Remco
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| Participants |
Full time employees from category 19 to 26 excluding non-executive directors. |
| Pay-out form |
Cash payment (short-term component)
Cash payment = Single Incentive x 67%
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DRDGOLD Shares (long-term component)
Deferred DRDGOLD shares =
Single Incentive x 33% + any approved retention award
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| Pay-out period |
Settled annually for all employees |
Vesting over 5 years at 20% per annum for Category 25 and 26 (F band) and over 3 years at 33% per year for Category 19 to 24 (E and D band) participants, without further performance conditions and subject to continued employment. |
| Basis of award |
Group and individual scorecards for initial award. Business unit scorecard may be introduced for subsequent awards. |
| Safeguards |
The quantum and award of the Single Incentive will be tested against certain safeguards including a specified percentage of EBIT and a 1% limitation on the total number of DRDGOLD shares in issue during that year. |
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| Scorecard On-target percentages and weightings |
Strategic Level |
Typical title |
Scorecard On-target Percentage |
Performance Multiplier Weighting |
| Company |
Business Unit* |
Personal |
| Top Management, Strategic Intent |
CEO |
90% |
90% |
0% |
10% |
| CFO |
75% |
90% |
0% |
10% |
| General Management, Strategic Execution |
General Managers |
60% |
90% |
0% |
10% |
Senior and Middle Management |
Heads of Department |
45% |
90% |
0% |
10% |
Group scorecard
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| Area |
Measure |
Weight |
Threshold |
Target |
Stretch |
Measures |
| 0% |
100% |
200% |
| Shareholders (20%) |
Relative Total Shareholder Return |
10% |
Median |
Halfway between median / UQ |
Upper quartile |
Relative to that of comparators |
| Return on Equity |
10% |
Cost of equity |
Cost of equity plus 3% |
Cost of equity plus 6% |
Return higher than Cost of equity |
| Financial (30%) |
Cash operating cost (R/ton) |
10% |
115% x Budget |
110% x Budget |
Budget |
Based on the achievement vs budget, noting that budget is already a stretch target since it is based on “nameplate” capacity without de-risking for probable downtime. |
| Cash operating cost (R/kg) |
10% |
| All-in Sustaining Cost (R per kg) |
10% |
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| Operations (30%) |
Production (kgs) |
15% |
85% x Budget |
90% x Budget |
Budget |
Based on the achievement vs budget, noting that budget is already a stretch target since it is based on “nameplate” capacity without de-risking for probable downtime. |
| Throughput (tons) |
15% |
| Current scorecard modifier evaluation (ESG factors) (20%) |
Environmental |
4% |
Amber Score (2) |
Green Score (3) |
Blue Score (5) |
Based on current scorecard modifier evaluation, a portfolio of evidence compiled. |
| Health & Safety |
4% |
| Local Economic Development |
4% |
| Human Resources Development |
4% |
| Transformation |
4% |
Performance will be assessed based on the following:
- For "threshold performance" , 0% will be scored for that performance area
- For "on-target performance" , 100% will be scored for that performance area
- For "stretch" , 200% will be scored for that performance area
-Linear vesting will be applied between threshold, on-target and stretch.
Notes
1.In addition to the financial conditions in the scorecard, free cash flow is reflected in the separate free cash flow portion of the incentive and in the determination of the cash vs deferred portion of the Single Incentive
2.Retention award means a discretionary award of deferred shares
3.In addition to the modifier scorecard evaluation, failures in governance and environmental compliance are considered in the malus and clawback provisions of the Single Incentive
4.In addition to the safety condition measured in terms of LTIFR, fatalities are considered in the malus and clawback provisions for the Single Incentive
Service Agreements
Service contracts negotiated with each executive and non-executive director incorporate their terms and conditions of employment and are approved by our Remuneration Committee.
The Company’s current executive directors, Mr. D.J. Pretorius and Mr. A.J. Davel, entered into agreements of employment with us, on January 1, 2009 and January 1, 2015, respectively. These agreements regulated the employment relationship with Messrs. D.J. Pretorius and A.J. Davel during the year ended June 30, 2024.
On July 1, 2022 Mr. D J Pretorius entered into a new agreement of employment for a period of 3 years and thereafter it continues indefinitely until terminated by either party on not less than three months’ written notice. Under the employment agreement effective up to June 30, 2025 Mr. D J Pretorius receives from us a guaranteed remuneration package of R8.3 million per annum. Mr. D J Pretorius was eligible under his employment agreement, for an incentive bonus of up to 100% of his annual remuneration package in respect of one bonus cycle per annum over the duration of his appointment, on the condition that DRDGOLD achieves certain key performance indicators, along with any discretionary bonus awarded by the Remuneration Committee. In addition, he is eligible to participate in the equity-settled long-term incentive scheme (awarded 799,595 conditional shares in October 2022, 436,959 conditional shares in October 2023 and 404,342 conditional shares in October 2024).
Mr. A J Davel entered into a new employment agreement effective from July 1, 2022 for a period of 3 years and thereafter it continues indefinitely until terminated by either party on not less than three months’ prior written notice. Mr. A J Davel receives from us a guaranteed remuneration package of R5.3 million per annum. Mr. A J Davel is eligible under his employment agreement, for a short term incentive of up to 100% of his annual remuneration package in respect of one bonus cycle per annum over the duration of his appointment, on the condition that DRDGOLD achieves certain key performance indicators, along with any discretionary bonus awarded by the Remuneration Committee. In addition, he is eligible to participate in the equity-settled long-term incentive scheme (awarded 425,680 conditional shares in October 2022, 232,624 conditional shares in October 2023 and 215,259 conditional shares in October 2024)
Mr. T J Cumming, Mr. E A Jeneker, Mrs. T B V N Mnyango, Mr. J A Holtzhausen, Mr. J J Nel, Ms. K P Lebina and Ms C D Flemming entered into a service agreement which continues indefinitely until terminated by the director not less than one months’ prior written notice, the director is not recommended for re-appointment by the Board, if the director is not reappointed at any AGM, or where grounds exist for termination.
The Company does not administer any pension, retirement or other similar scheme in which the directors receive a benefit.
6C. BOARD PRACTICES
Board of Directors
As at June 30, 2024 and as at September 30, 2024, the board of directors comprises two Executive Directors (Mr. D J Pretorius and Mr. A J Davel), and seven Non-Executive Directors (Messrs. T J Cumming, J J Nel, E A Jeneker, J A Holtzhausen and Mmes. K P Lebina, T B V N Mnyango, C D Flemming). The Non-Executive Directors are independent under the New York Stock Exchange, or NYSE, requirements (as affirmatively determined by the Board of Directors) and the South African King IV Report except Mr. T J Cumming who also serves as an independent non-executive director of Sibanye-Stillwater Limited, DRDGOLD’s controlling shareholder.
In accordance with the King IV Report on corporate governance, as encompassed in the JSE Listings Requirements, and in accordance with the United Kingdom Combined Code, the responsibilities of Chairman and Chief Executive Officer are separate. Mr. T J Cumming is the Non-Executive Chairman, Mr. D J Pretorius is the Chief Executive Officer and Mr. A J Davel is the Chief Financial Officer. The board has established a Nominations Committee, and it is our policy for details of a prospective candidate to be distributed to all directors for formal consideration at a full meeting of the board. A prospective candidate would be invited to attend a meeting and be interviewed before any decision is taken. In compliance with the NYSE rules a majority of independent directors will select or recommend director nominees.
The board’s main roles are to create value for shareholders, to provide leadership of the Company, to approve the Company’s strategic objectives and to ensure that the necessary financial and other resources are made available to management to enable them to meet those objectives. The board retains full and effective control over the Company, meeting on a quarterly basis with additional ad hoc meetings being arranged when necessary, to review strategy and planning and operational and financial performance. The board further authorizes acquisitions and disposals, major capital expenditure, stakeholder communication and other material matters reserved for its consideration and decision under its terms of reference. The board also approves the annual budgets for the various operational units.
The board is responsible for monitoring the activities of executive management within the company and ensuring that decisions on material matters are referred to the board. The board approves all the terms of reference for the various subcommittees of the board, including special committees tasked to deal with specific issues. Only the executive directors are involved with the day-to-day management of the Company.
To assist new directors, an induction program has been established by the Company, which includes background materials, meetings with senior management, presentations by the Company’s advisors and site visits. The directors are assessed annually, both individually and as a board, as part of an evaluation process, which is driven by an independent consultant, at least every two years. In addition, the Remuneration Committees formally evaluate the executive directors on an annual basis, based on objective criteria.
All directors, in accordance with the Company’s MOI, are subject to retirement by rotation and re-election by shareholders. In addition, all directors are subject to election by shareholders at the first annual general meeting following their appointment by directors. The appointment of new directors is approved by the board as a whole. The names of the directors submitted for re-election are accompanied by sufficient biographical details in the notice of the forthcoming annual general meeting to enable shareholders to make an informed decision in respect of their re-election.
All directors have access to the advice and services of the Company Secretary, who is responsible to the board for ensuring compliance with procedures and regulations of a statutory nature. Directors are entitled to seek independent professional advice concerning the affairs of the Company at the Company’s expense, should they believe that course of action would be in the best interest of the Company.
Board meetings are held quarterly in South Africa and occasionally abroad. The structure and timing of the Company’s board meetings, which are scheduled over two days, allows adequate time for the Non-Executive Directors to interact without the presence of the Executive Directors. The board meetings include the meeting of the Audit Committee, Risk Committee, Remuneration Committee & Nominations Committee as well as the Social & Ethics Committee which act as subcommittees to the board. Each subcommittee is chaired by one of the Independent Non-Executive Directors, except for the nominations committee, each of whom provides a formal report back to the board. Each subcommittee meets for approximately half a day. Certain senior personnel of the Company attend the subcommittee meetings as invitees.
The board sets the standards and values of the Company and much of this has been embodied in the Company’s Code of Conduct, which is available on our website at www.drdgold.com. The Code of Conduct applies to all directors, officers and employees, including the principal executive, financial and accounting officers, in accordance with Section 406 of the US Sarbanes-Oxley Act of 2002, the related US securities laws and the NYSE rules. The Code contains provisions for employees to report violations of Company policy or any applicable law, rule or regulation, including US securities laws.
A description of the significant ways in which our corporate governance practices differ from practices followed by U.S. companies listed on the NYSE can be found in Item 16G. Corporate Governance.
Directors' Terms of Service
The following table shows the date of appointment and number of years until expiration of the directors' current term of service since the latest AGM (November 29, 2023) of each of the directors as at June 30, 2024:
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| Director |
Title |
Year first appointed |
Term of current office since latest AGM1 |
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| D J Pretorius |
Chief Executive Officer |
2008 |
3 years |
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| A J Davel |
Chief Financial Officer |
2015 |
1 year |
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| T J Cumming |
Non-Executive Director |
2020 |
2 years |
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| E A Jeneker |
Non-Executive Director |
2007 |
1 year |
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| J A Holtzhausen |
Non-Executive Director |
2014 |
3 years |
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| T B V N Mnyango |
Non-Executive Director |
2016 |
3 years |
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| J J Nel |
Non-Executive Director |
2018 |
2 years |
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| K P Lebina |
Non-Executive Director |
2019 |
1 year |
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| C D Flemming |
Non-Executive Director |
2020 |
2 years |
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1In terms of clause 25 of the MOI, one third of the directors (executive and non-executive) for the time being shall retire from office by rotation at each AGM. The directors, eligible and available for re-election, will renew their term of service director with effect from the end of the AGM, if re-elected. |
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Executive Committee
As at June 30, 2024, Executive Committee ("EXCO") comprise of the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer. After a review was performed to confirm the makeup of the DRDGOLD EXCO, it was decided that the Company Secretary will no longer form part of the EXCO. The Executive Committee consisted of Mr. D J Pretorius (Chairman), Mr. A J Davel and Mr. W J Schoeman. Ms. E Beukes resigned as company secretary of the company effective July 31, 2023.
The EXCO meets bi-weekly basis to review current operations, develop strategy and policy proposals for consideration by the board of directors. Members of the EXCO, who are unable to attend the meetings in person, are able to participate via teleconference facilities, to allow participation in the discussion and conclusions reached. The subsidiary companies’ executives are permanent participants on the EXCO.
Board Committees
The board has established a number of standing committees to enable it to properly discharge its duties and responsibilities and to effectively fulfill its decision-making process. Each committee acts within written terms of reference which have been approved by the board and under which specific functions of the board are delegated. The terms of reference for all committees can be obtained by application to the Company Secretary at the Company’s registered office. Each committee has defined purposes, membership requirements, duties and reporting procedures. Minutes of the meetings of these committees are circulated to the members of the committees and made available to the board. Remuneration of Non-Executive Directors for their services on the committees concerned is determined by the board. The committees are subject to annual evaluation by the board with respect to their performance and effectiveness. The following information reflects the composition and activities of these committees.
The Board constituted an Investment Committee who had their first meeting on October 6, 2022 to consider prospective projects, acquisitions and disposals in line with DRDGOLD's strategy and to ensure that adequate due diligence procedures are followed. The Investment Committee also conducts other investment-related functions as delegated to it by the Board from time to time, as governance oversight increases as the DRDGOLD Group continues to grow. Members of this committee include J J Nel (Chairman), J A Holtzhausen, K P Lebina, E A Jeneker and T J Cumming. The CEO, CFO and COO are invitees.
Committees of the Board of Directors
Nominations Committee
As at June 30, 2024 the Nominations Committee consisted of T J Cumming (Chairman), E A Jeneker, J A Holtzhausen, T B V N Mnyango and K P Lebina.
The Nominations Committee meets on an ad hoc basis. All members of this committee are independent non-executive directors who are independent according to the definition set out in the NYSE Rules, except for T Cumming. It is chaired by the board chairman who is a non-executive director (“NED”).
The primary role of the committee is to execute the following functions:
•ensure the establishment of a formal process for the appointment of directors;
•ensure that inexperienced directors are developed through a mentorship programme;
•ensure that directors receive regular briefings on changes in risks, laws and the appropriate contribution;
•drive an annual process to evaluate the board, board committees and individual directors;
•ensure that succession plans for the board, chief executive officer and senior management appointments are developed and implemented.
The key responsibilities of the Nominations Committee include the following:
•make recommendations to the board on the appointment of new directors;
•make recommendations on the composition of the board and the balance between executive and non-executive directors appointed to the board;
•review board structure, size and composition on a regular basis;
•make recommendations on directors eligible to retire by rotation; and
•apply the principles of good corporate governance and best practice in respect of nominations matters.
Remuneration Committee
As at June 30, 2024 the Remuneration Committee consisted of J J Nel (Chairman), E A Jeneker, J A Holtzhausen, T B V N Mnyango and T J Cumming.
The Remuneration Committee meets on a quarterly basis. All members of this committee are independent non-executive directors who are independent according to the definition set out in the NYSE Rules, except for T J Cumming. It is chaired by an independent non-executive director.
The Remuneration Committee ensures the Company remunerates directors and executive management fairly and responsibly and that the disclosure of director and executive remuneration is accurate, complete and transparent. The committee evaluates performance in relation to reward. Its terms of reference provide the scope of responsibility, as delegated by the Board, to review and make decisions on the remuneration policy and its implementation. All members were elected by the Board and suitably qualified and have the necessary expertise required to discharge their responsibilities.
The key responsibilities of the Remuneration Committee include the following:
•Evaluate the remuneration structure for Executive Directors and Group Exco members and ensured that they are fairly rewarded, in the context of overall employee remuneration and taking into account the Company’s performance and remuneration philosophy;
•Conduct annual monitoring and review of the terms and conditions of Executive Directors’ service agreements;
•Determine grants to the Executive Directors and other Group Exco members made in terms of the Company’s short- and long-term incentive plans;
•Authorise the design of new Incentive Plan incorporating the Deferred Share Plan; and
•Adopted and implemented the Compensation Clawback Policy in accordance with the requirements of Section 303A.14 of the New York Stock Exchange Listed company manual.
Audit Committee
As at June 30, 2024 the Audit Committee consisted of J A Holtzhausen (Chairman), J J Nel, K P Lebina and C D Flemming.
All members of the Audit Committee are independent according to the definition set out in the NYSE Rules. The committee’s charter deals with all the aspects relating to its functioning.
The Audit Committee charter sets out the committee’s terms of reference which include responsibility for:
•appointment and oversight of external auditors, audit process and financial reporting;
•oversight of internal audit;
•overseeing the integrated reporting and assurance model;
The Audit Committee meets each quarter with the external auditors, the company’s manager: risk and internal audit, and the CFO. The committee reviews the audit plans of the internal auditors to ascertain the extent to which the scope of the audits can be relied upon to detect weaknesses in internal controls. It also reviews the annual and interim financial statements prior to their approval by the board.
The committee is responsible for making recommendations to appoint, reappoint or remove the external auditors, and the designated external audit partner as well as determining their remuneration and terms of engagement. In accordance with its policy, the committee preapproves all audit and non-audit services provided by the external auditors. BDO South Africa Inc. was reappointed by shareholders at the last AGM on November 29, 2023 to perform DRDGOLD’s external audit function, such appointment was made by the shareholders in accordance with the laws of South Africa and upon recommendation of the board following the Audit Committee. BDO South Africa Inc. has been the appointed auditors since 2023.
The internal audit function is performed in-house, with the assistance of Pro-Optima Audit Services Proprietary Limited. Internal audits are performed at all DRDGOLD operating units and are aimed at reviewing, evaluating and improving the effectiveness of risk management, internal controls and corporate governance processes.
Significant deficiencies, material weaknesses, instances of non-compliance and exposure to high risk and development needs are brought to the attention of operational management for resolution and reported to the Audit Committee. The committee members have access to all the records of the internal audit team.
DRDGOLD’s internal and external auditors have unrestricted access to the chairman of the Audit Committee and, where necessary, to the chairman of the board and the CEO. All significant findings arising from audit procedures are brought to the attention of the committee and, if necessary, to the board.
Section 404(a) of the Sarbanes-Oxley Act of 2002 stipulates that management is required to assess the effectiveness of the internal controls surrounding the financial reporting process. The results of this assessment are reported in the form of a management attestation report that is filed with the SEC as part of the Form 20-F. Additionally, DRDGOLD’s external auditors are required to express an opinion on the effectiveness of internal controls over financial reporting, which is also contained in the Company’s Form 20-F.
Risk Committee
As at June 30, 2024 the Risk Committee consisted of K P Lebina (Chairwoman), D J Pretorius, J J Nel, C D Flemming and T J Cumming.
Roles and responsibilities:
•Oversee the development and annual review of a policy and plan for risk management to recommend for approval to the Board
•Ensure that risk management assessments are performed on a continuous basis
•Ensure that reporting on risk management is complete, timely, accurate and accessible
•Oversee that the risk management plan is widely disseminated throughout the company and integrated in the day-to-day activities of the company
•Ensure that frameworks and methodologies are implemented to increase the possibility of anticipating unpredictable risks
•Ensure that management considers and implements appropriate risk responses
•Ensure co-ordination with the audit committee who will be responsible for the risk management process as far as internal controls, financial reporting and IT risks are concerned.
All members of the Risk Committee are independent according to the definition set out in the NYSE Rules, except for T J Cumming. It is chaired by an independent NED.
An important aspect of risk management is the transfer of risk to third parties to protect the company from disaster. DRDGOLD’s major assets and potential business interruption and liability claims are therefore covered by the group insurance policy, which encompasses all the operations. Most of these policies are held through insurance companies operating in the United Kingdom, Europe and South Africa. The various risk-management initiatives undertaken within the group as well as the strategy to reduce costs without compromising cover have been successful and resulted in substantial insurance cost savings for the Group.
Social and Ethics Committee
As at June 30, 2024, the Social and Ethics Committee consisted of E A Jeneker (Chairman), A J Davel, T B V N Mnyango and C D Flemming
The Social and Ethics Committee is a statutory body established in terms of section 72 of the Companies Act, 2008; the objectives of which are to facilitate transformation and sustainable development by, inter alia, promoting transformation within the Company and economic empowerment of previously disadvantaged communities particularly within the areas where the Company conducts business; striving towards achieving the goal of equality as the South African Constitution and other legislation require within the context of the demographics of the country at all levels of the Company and its subsidiaries; and conducting business in a manner which is conducive to internationally acceptable environmental and sustainability standards.
The following terms of reference were approved by the board to enable the committee to function effectively. These are to be responsible for and make recommendations to the board with respect to the following matters:
•monitor the Company’s activities regarding the 10 principles set out in the United Nations Global Compact Principles and the Organisation for Economic Co-operation and Development recommendations regarding Corruption, the Global Industry Standards on Tailings Management, the United Nations SDGs. the Employment Equity Act and the Broad Based Black Economic Empowerment Act;
•maintaining records of sponsorship, donations and charitable giving;
•reviewing matters relating to the environment, health and public safety, including the impact of the company’s activities and of its products or services;
•reviewing matters relating to labor and employment
•reviewing and recommending the company’s code of ethics;
•reviewing and recommending any corporate citizenship policies;
•reviewing significant cases of employee conflicts of interests, misconduct or fraud, or any other unethical activity by employees or the Company
Investment Committee
As at June 30, 2024, the Investment Committee consisted of J J Nel (Chairman), T J Cumming, J A Holtzhausen, E A Jeneker and K P Lebina
The Investment Committee assist the Board to oversee the allocation of capital and investment activities in line with the Company's strategy.
Roles and responsibilities:
•Assess capital projects and investment opportunities;
•Seek to ensure that project and investment guidelines and other procedures for the allocation of capital are consistently and properly applied;
•Consider and recommend to the Board potential projects, acquisitions and disposals in line with strategy
•Ensures due diligence procedures are followed
•Monitors progress throughout the project lifecycle and periodically reports any findings to the Board
6D. EMPLOYEES
Employees
The total number of employees at June 30, 2024, of 2,956 comprises 2,053 specialized service providers and 903 employees who are directly employed by us and our subsidiary companies. Of the 903 employees directly employed by us and our subsidiary companies, 22 employees are on a fixed term employment contract.
The total number of employees at June 30, 2023, of 3,082 comprises 2,155 specialized service providers and 927 employees who are directly employed by us and our subsidiary companies. Of the 927 employees directly employed by us and our subsidiary companies, 27 employees are on a fixed term employment contract.
The total number of employees at June 30, 2022, of 2,791 comprises 2,016 specialized service providers and 943 employees who are directly employed by us and our subsidiary companies. Of the 943 employees directly employed by us and our subsidiary companies, 34 employees are on a fixed term employment contract.
The total number of employees at September 30, 2024, of 3,365 comprises 2,480 specialized service providers and 885 employees who are directly employed by us and our subsidiary companies. Of the 885 employees directly employed by us and our subsidiary companies, 23 employees are on a fixed term employment contract.
All of our employees are based at our operations that operate exclusively in South Africa.
Labor Relations
As at June 30, 2024, approximately 84% of our Ergo employees and 75% of our FWGR employees are members of trade unions or employee associations. South Africa's labor relations environment remains a platform for social reform. The National Union of Mineworkers, (“NUM”), one of the main South African mining industry unions, is influential in the tripartite alliance between the ruling African National Congress, the Congress of South African Trade Unions, (“COSATU”), and the South African Communist Party as it is the biggest affiliate of COSATU. The relationship between management and labor unions remains cordial. The organized labor coordinating forum meets regularly to discuss matters pertinent to both parties.
A three-year wage agreement was reached with organized labor at FWGR in November 2021. FWGR is in the process of reaching a new wage agreement and is aiming to conclude on this in the second quarter of fiscal year 2025. Ergo reached a new three-year wage agreement in fiscal year 2022.
We recognize the need for transformation and have put systems and structures in place to address this at both management and board level. We aim to recruit in line with our transformational objectives. The composition of the Board of Directors specifically, changed significantly over the past two fiscal years and is more diverse and reflective of transformation and South Africa’s demographics.
Safety statistics
Due to the importance of our labor force, we continuously strive to create a safe and healthy working environment. The following are our fiscal 2024 overall safety statistics for our operations:
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| (Per million man hours) |
Ergo |
FWGR |
Consolidated |
|
Year ended June 30, |
Year ended June 30, |
Year ended June 30, |
|
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
Lost time injury frequency rate (LTIFR)1 |
1.18 |
1.44 |
0.92 |
1.87 |
1.15 |
1.50 |
Reportable incidence frequency rate (RIFR)1 |
0.53 |
0.96 |
— |
1.87 |
0.46 |
1.09 |
| Fatalities |
1 |
— |
— |
— |
1 |
— |
1 Calculated as follows: actual number of instances divided by the total number of man hours worked multiplied by one million. |
6E. SHARE OWNERSHIP
To the best of our knowledge, we believe that our ordinary shares held by prescribed officers and directors, in aggregate, do not exceed one percent of the Company’s issued ordinary share capital. For details of share ownership of directors and prescribed officers see Item 7A. Major Shareholders.
As of June 30, 2024, directors and prescribed officers do not hold any options to purchase ordinary shares.
Closed periods apply to share trading by directors, prescribed officers and other employees, whenever persons become or could potentially become aware of material price sensitive information, such as information relating to an acquisition, bi-annual results etc., which is not in the public domain. When these persons have access to this information an embargo is placed on share trading for those individuals concerned. The embargo need not involve the entire Company in the case of an acquisition and may only apply to the board of directors, executive committee, and the financial and new business teams, but in the case of interim and year-end results the closed-period is group-wide.
Equity-Settled Long-Term Incentive Scheme
On December 2, 2019 shareholders approved an Equity-Settled Long-Term Incentive Scheme (“Scheme”) for purposes of replacing the Cash-Settled Long-Term Incentive Scheme. Certain key features of the Scheme are:
Equity settled
The Scheme will be equity-settled. Equity-settlement will be implemented by way of market acquisition of DRDGOLD ordinary shares or through the issue of authorised but unissued shares or treasury shares.
Participants
Persons eligible to participate in the Scheme will be permanent employees (which, for the avoidance of doubt, includes an executive director, but excludes a non-executive director) of the Company and its subsidiaries, in Category 19 and above (“Participants”).
Award of Conditional Shares
Pursuant to the Scheme, the Company’s Remuneration Committee will resolve, on an annual basis, to award “Conditional Shares” (“Award”) which are comprised of:
•“Performance Shares” which are subject to conditions, as set out in the rules of the Scheme and performance conditions; and
•“Retention Shares” which are subject to conditions, as set out in the rules of the Scheme.
Participants are not required to pay for Awards or Shares Settled in terms of vested Awards.
Annual awards of Conditional Shares will be made, in two forms:
•80% of the Award will be comprised of Performance Shares
•20% of the Award will be comprised of Retention Shares
The target award value will be referenced to market-related award quanta, and will be adjusted based upon individual performance as follows:
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Individual Rating |
% of Target Value Awarded |
< 2.75 |
0% |
2.75 to < 3.00 |
50% |
3.0 to < 3.75 |
100% |
3.75 to < 4.5 |
133.33% |
4.5 to < 5.0 |
166.67% |
5.0 |
200% |
Dividend and Voting Rights
The Conditional Share Awards carry no dividend or voting rights, until Settled, and therefore any transfer and other rights associated with the Conditional Shares will only vest following settlement.
Vesting of the Conditional Shares
The first grant was made on December 2, 2019 and will vest in two tranches, 50% on the 2nd anniversary and the remaining 50% on the 3rd anniversary of the grant date respectively, provided the employee is still within the employment of the Group until the respective vesting dates.
Retention shares:
100% of the retention shares will vest if the employee remains in the employ of the Company at vesting date and individual performance criteria are met.
Performance shares:
Total shareholder’s return (“TSR”) measured against a hurdle rate of 15% referencing DRDGOLD’s Weighted Average Cost of Capital “WACC”:
• 50% of the performance shares are linked to this condition; and
• all of these performance shares will vest if DRDGOLD’s TSR exceeds the hurdle rate over the vesting period
TSR measured against a peer group of 3 peers (Sibanye-Stillwater, Harmony Limited and Pan-African Resources Limited):
• 50% of the performance shares are linked to this condition; and
• The number of performance shares which vest is based on DRDGOLD’s actual TSR performance in relation to percentiles of peer group’s performance as follows
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Percentile of Peers |
% of Conditional Shares Vesting |
< 25th percentile |
0% |
25th to < 50th percentile |
25% |
50th to < 75th percentile |
75% |
≥ 75th percentile |
100% |
Awarded Conditional Shares which do not Vest to the Participant, as a result of forfeiture or which lapse, revert back to the Scheme.
Share Limits
Overall Company Limit
The aggregate number of Shares at any one time which may be awarded for Settlements under the Scheme shall not exceed 34,500,000 (thirty four million, five hundred thousand) Shares (representing approximately 4.95% of the total issued share capital of the Company at the date of this Notice).
Individual Limit
Subject to certain dilution adjustments, the aggregate number of Shares at any one time which may be awarded under the Scheme to any one Participant shall not exceed 14,500,000 Shares.
6F. ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION
Not applicable.
.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7A. MAJOR SHAREHOLDERS
As of September 30, 2024, our issued capital consisted of:
•864,588,711 ordinary shares of no par value; and
•5,000,000 cumulative preference shares.
To our knowledge, as of June 30, 2024, we were not directly or indirectly owned or controlled by another corporation or any person or foreign government, other than the controlling interest held by Sibanye-Stillwater.
On July 31, 2018, 265 million ordinary shares were issued to Sibanye-Stillwater as settlement of the purchase consideration for the acquisition of the WRTRP Assets. On January 8, 2020, Sibanye-Stillwater exercised the option granted to it to subscribe for such number of new ordinary shares in the share capital of DRDGOLD for cash resulting in Sibanye-Stillwater holding in aggregate 50.1% of all DRDGOLD shares in issue (including treasury shares). Sibanye-Stillwater subscribed for 168,158,944 Subscription Shares at an aggregate subscription price of R1,086 million, on January 22, 2020. The Subscription Shares were allotted and issued at a price of R6.46 per share, being a 10% discount to the 30-day volume weighted average traded price.
Other than the above, there are no arrangements, the operation of which may at a subsequent date result in a change in control of us.
Based on information available to us, as of September 30, 2024:
•there were 12,837 record holders of our ordinary shares in South Africa, who held 584,144,356 or approximately 67.6% of our ordinary shares;
•there was one record holder of our cumulative preference shares in South Africa, who held 5,000,000 ordinary shares or 100% of our cumulative preference shares;
•there were 50 US record holders of our ordinary shares, who held approximately 42,224,170 ordinary shares or approximately 4.9% of our ordinary shares excluding those shares held as part of our ADR program; and
•there were 592 registered holders of our ADRs in the United States, who held approximately 211,083,186 shares (21,108,318) ADRs) or approximately 24.6% of our ordinary shares.
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of September 30, 2024, by:
•each of our directors and prescribed officers; and
•any person whom the directors are aware of as at September 30, 2024 who is interested directly or indirectly in 1% or more of our ordinary shares. There was significant change in the percentage ownership of the major shareholders over the preceding three years. During fiscal year 2020 Sibanye-Stillwater exercised the option granted to it to subscribe for such number of new ordinary shares in the share capital of DRDGOLD for cash resulting in Sibanye-Stillwater holding in aggregate 50.1% of all Shares in issue (including treasury shares). Sibanye-Stillwater subscribed for 168,158,944 ordinary shares.
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Shares Beneficially owned |
| Holder |
Number |
Percent of outstanding ordinary shares |
| Directors/prescribed officers |
|
|
| D.J. Pretorius |
999,816 |
* |
| A.J. Davel |
338,756 |
* |
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| Other |
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| SIBANYE GOLD PTY LTD |
433,158,944 |
50.1 |
% |
| THE BANK OF NEW YORK MELLON DR |
212,655,186 |
24.6 |
% |
| GOVERNMENT EMPLOYEES PENSION FUND P |
28,152,699 |
3.3 |
% |
| FRB ITF ALLAN GRAY BALANCED FUND |
10,116,920 |
1.2 |
% |
| CLEARSTREAM BANKING S.A LUXEMBOURG |
9,844,045 |
1.1 |
% |
| STATE STREET BANK AND TRUST CO-OMNI |
8,943,844 |
1.0 |
% |
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| * Indicates share ownership of less than 1% of our outstanding ordinary shares. |
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No ordinary shareholder has voting rights which differ from the voting rights of any other ordinary shareholder.
Cumulative Preference Shares
Randgold and Exploration Company Limited, or Randgold, owns 5,000,000 (100%) of our cumulative preference shares. Randgold's registered address is Suite 25, Katherine & West Building, Corner of Katherine and West Streets, Sandown, Sandton, 2196.
The holders of cumulative preference shares do not have voting rights unless any preference dividend is in arrears for more than six months. The terms of issue of the cumulative preference shares are that they carry the right, in priority to the Company's ordinary shares, to receive a dividend equal to 3% of the gross future revenue generated by the exploitation or the disposal of the Argonaut mineral rights acquired from Randgold in September 1997. Additionally, holders of cumulative preference shares may vote on resolutions which adversely affect their interests and on the disposal of all, or substantially all, of our assets or mineral rights. There is currently no active trading market for our cumulative preference shares. Holders of cumulative preference shares will only obtain their potential voting rights once the Argonaut Project becomes an operational gold mine, and dividends accrue to them. The prospecting rights have since expired and the Argonaut Project terminated. The development of the project is not expected to materialise and therefore no dividend is expected to be paid.
7B. RELATED PARTY TRANSACTIONS
Transactions with related parties are disclosed in Item 18. ‘‘Financial Statements - Note 5.1 – Cost of sales’’
Remuneration paid to key management is disclosed in Item 18. ‘‘Financial Statements - Note 19.2 – Directors' and prescribed officers' emoluments’’
7C. INTERESTS OF EXPERTS AND COUNSEL
Not applicable.
ITEM 8. FINANCIAL INFORMATION
8A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
1.Please refer to Item 18. Financial Statements.
2.Please refer to Item 18. Financial Statements.
3.Please refer to Item 18. Financial Statements.
4.The last year of audited financial statements is not older than 15 months.
5.Not applicable.
6.Not applicable.
7.Please refer to Item 4D. Property, plant and equipment—Legal aspects and permitting
8.DRDGOLD’s dividend policy is to return excess cash over and above the predetermined cash buffer and cash that has been reserved for specific capital projects to its shareholders. Dividends are proposed by the Audit Committee and approved by the Board based on the quarterly management accounts presented to the Board. Please refer to Item 10B. Memorandum and articles of association.
8B. SIGNIFICANT CHANGES
Significant changes that have occurred since June 30, 2024, the date of the last audited financial statements included in this Annual Report, are discussed in the relevant notes to the financial statements under Item 18. Financial Statements.
ITEM 9. THE OFFER AND LISTING
9A. OFFER AND LISTING DETAILS
The principal trading market for our equity securities is the Johannesburg Stock Exchange ("JSE") (symbol: DRD). Additionally, the A2X (listed on September 5, 2023) and our ADSs trade on the New York Stock Exchange (symbol: DRD). The ADRs are issued by The Bank of New York Mellon, as depository. Each ADR represents one ADS and each ADS represents ten of our ordinary shares. Until July 23, 2007, each ADS represented one of our ordinary shares.
The cumulative preference shares are not traded on any exchange.
There have been no trading suspensions with respect to our ordinary shares on the JSE during the past three years ended June 30, 2024, nor have there been any trading suspensions with respect to our ADRs on the New York Stock Exchange since our listing on that market.
9B. PLAN OF DISTRIBUTION
Not applicable.
9C. MARKETS
Nature of Trading Markets
See “Offer and Listing Details” above.
9D. SELLING SHAREHOLDERS
Not applicable.
9E. DILUTION
Not applicable.
9F. EXPENSES OF THE ISSUE
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
10A. SHARE CAPITAL
Not applicable.
10B. MEMORANDUM AND ARTICLES OF ASSOCIATION
As of June 30, 2024, we had authorized for issuance 1,500,000,000 ordinary shares of no par value (as of September 30, 2024: 1,500,000,000), and 5,000,000 cumulative preference shares of R0.10 par value (as of September 30, 2024: 5,000,000). On this date, we had issued 864,588,711 ordinary shares (as of September 30, 2024: 864,588,711) and 5,000,000 cumulative preference shares (as of September 30, 2024: 5,000,000).
Set out below are brief summaries of certain provisions of our Memorandum of Incorporation, or our MOI, the Companies Act of South Africa and the JSE Listings Requirements, all as in effect on June 30, 2024 and September 30, 2024. The summary does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the MOI, the Companies Act, and the JSE Listings Requirements.
We are registered under the Companies Act of South Africa under registration number 1895/000926/06. As set forth in our Memorandum of Incorporation, the main object and business of our company is mining and exploration for gold and other minerals.
Borrowing Powers
Our directors may from time to time borrow for the purposes of the Company, such sums as they think fit and secure the payment or repayment of any such sums, or any other sum, as they think fit, whether by the creation and issue of securities, mortgage or charge upon all or any of the property or assets of the Company. The directors shall procure that the aggregate principal amount at any one time outstanding in respect of monies so borrowed or raised by the Company and all the subsidiaries for the time being of the Company shall not exceed the aggregate amount at that time authorized to be borrowed or secured by the Company or the subsidiaries for the time being of the Company (as the case may be).
Share Ownership Requirements
Our directors are not required to hold any shares to qualify or be appointed as a director.
Voting by Directors
A director may authorize any other director to vote for him at any meeting at which neither he nor his alternate director appointed by him is present. Any director so authorized shall, in addition to his own vote, have a vote for each director by whom he is authorized.
The quorum necessary for the transaction of the business of the directors is a majority of the directors present at a meeting before a vote may be called at any meeting of directors.
Directors are required to notify our board of directors of interests in companies and contracts. If a director has a personal financial interest in respect of a matter to be considered at a meeting of the board he or she must disclose the interest and its nature, any material information relating to the matter and thereafter leave the meeting immediately after making the disclosure. Such director must not take part in consideration of the matter. He is not to be regarded as being present for the purpose of determining whether a resolution has sufficient support to be adopted.
The King IV Report on Corporate Governance for South Africa, 2016 (King IV) was published on 1 November 2016 and came into effect on 1 April 2017 for companies with financial years commencing thereafter. The application regime for King IV is "apply and explain", requiring companies to substantially and meaningfully strive towards good corporate governance. King IV is principles and outcomes based: a departure from mere compliance-based mindset. King IV recognises that sound governance outcomes, exemplified by integrity, competence, responsibility, accountability, fairness and transparency, are the cardinal pillars of good corporate citizenship. The JSE Limited has since made the adoption and application of King IV mandatory for all listed companies.
The remuneration of non-executive directors is typically determined by the board, but subject to approval by the shareholders at the AGM of the Company. In terms of section 65(11)(h) of the Companies Act, 2008 read with sections 66(8) and 66(9) thereof, remuneration may only be paid to directors for their services as directors in accordance with a special resolution approved by the shareholders within the previous 2 (two) years. A special resolution was passed at the 2022 AGM on November 28, 2022 to change the structure of the NED remuneration.
Under South African common law, directors are required to comply with certain fiduciary duties to the company and to exercise proper care and skill in discharging their responsibilities. These common law duties have now been codified by the Companies Act.
Age Restrictions
There is no age limit for directors.
Election of Directors
Each director shall be appointed by election by way of an ordinary resolution of shareholders at a general or annual meeting of company (“elected director (s)”) and no appointment of a director by way of a written circulated shareholders resolution in terms of section 60 of the Companies Act shall be competent.
One third of our directors, on a rotating basis, are subject to re-election at each annual general shareholder’s meeting. Retiring directors usually make themselves available for re-election. An amendment to the MOI which also subjects executive directors to re-election by rotation was approved by shareholders at the 2014 annual general meeting.
General Meetings
On the request of any shareholder or shareholders holding not less than 10 percent of our share capital which carries the right of voting at general meetings, we shall issue a notice to shareholders convening a general meeting for a date not less than 15 days from the date of the notice. Directors may convene general meetings at any time.
Our annual general meeting and a meeting of our shareholders for the purpose of passing a special resolution may be called by giving 15 days advance written notice of that meeting. For any other general meeting of our shareholders, 15 days advance written notice is required.
Our MOI provides that if at a meeting convened upon request by our shareholders, a quorum is not present within fifteen minutes after the time selected for the meeting, such meeting shall be postponed for one week. However the chairman has the discretion to extend the fifteen minutes for a reasonable period on certain grounds. The necessary quorum is three members present with sufficient voting powers in person or by proxy to exercise in aggregate 25% of the voting rights.
Voting Rights
The holders of our ordinary shares are generally entitled to vote at general meetings and on a show of hands have one vote per person and on a poll have one vote for every share held. The holders of our cumulative preference shares are not entitled to vote at a general meeting unless any preference dividend is in arrears for more than six months at the date on which the notice convening the general meeting is posted to the shareholders. Additionally, holders of cumulative preference shares may vote on resolutions which adversely affect their interests and on resolutions regarding the disposal of all or substantially all of our assets or mineral rights. When entitled to vote, holders of our cumulative preference shares are entitled to one vote per person on a show of hands and that portion of the total votes which the aggregate amount of the nominal value of the shares held by the relevant shareholder bears to the aggregate amount of the nominal value of all shares issued by us.
Dividends
We may, in certain circumstances in a general meeting, or our directors may, from time to time, declare a dividend to be paid to the shareholders in proportion to the number of shares they each hold. No dividend shall be declared except out of our profits. Dividends may be declared either free or subject to the deduction of income tax or duty in respect of which we may be charged. Holders of ordinary shares are entitled to receive dividends as and when declared by the directors.
Ownership Limitations
There are no limitations imposed by our MOI or South African law on the rights of shareholders to hold or vote on our ordinary shares or securities convertible into our ordinary shares.
Winding-up
If we are wound-up, then the assets remaining after payment of all of our debts and liabilities, including the costs of liquidation, shall be applied to repay to the shareholders the amount paid up on our issued capital and thereafter the balance shall be distributed to the shareholders in proportion to their respective shareholdings. On a winding up, our cumulative preference shares rank, in regard to all arrears of preference dividends, prior to the holders of ordinary shares. As of June 30, 2024 and September 30, 2024, no such dividends have been declared. Except for the preference dividend and as described in this Item our cumulative preference shares are not entitled to any other participation in the distribution of our surplus assets on winding-up.
Reduction of Capital
We may, by special resolution, reduce the share capital authorized by our MOI, or reduce our issued share capital including, without limitation, any stated capital, capital redemption reserve fund and share premium account by making distributions and buying back our shares.
Amendment of the MOI
Our MOI may be altered by the passing of a special resolution or in compliance with a court order. The Company may also amend the MOI by increasing or decreasing the number of authorized shares, classifying or reclassifying shares, or determining the terms of shares in a class. A special resolution is passed when the shareholders holding at least 25% of the total votes of all the members entitled to vote are present or represented by proxy at a meeting and, if the resolution was passed on a show of hands, at least 75% of those shareholders voted in favor of the resolution and, if a poll was demanded, at least 75% of the total votes to which those shareholders are entitled were cast in favor of the resolution. An amendment to the MOI to increase the number of authorized shares was approved by shareholders at the 2018 general meeting on March 28, 2018.
Consent of the Holders of Cumulative Preference Shares
The rights and conditions attaching to the cumulative preference shares may not be cancelled, varied or added, nor may we issue shares ranking, regarding rights to dividends or on winding up, in priority to or equal with our cumulative preference shares, or dispose of all or part of the Argonaut mineral rights without the consent in writing of the registered holders of our cumulative preference shares or the prior sanction of a resolution passed at a separate class meeting of the holders of our cumulative preference shares.
Distributions
We are authorized to make payments in cash or in specie to our shareholders in accordance with the provisions of the Companies Act and other consents required by law from time to time. We may, for example, in a general meeting, upon recommendation of our directors, resolve that any surplus funds representing capital profits arising from the sale of any capital assets and not required for the payment of any fixed preferential dividend, be distributed among our ordinary shareholders. However, no such profit shall be distributed unless we have sufficient other assets to satisfy our liabilities and to cover our paid up share capital. We also need to consider the solvency and liquidity requirements stated in the Companies Act of South Africa.
Directors’ power to vote compensation to themselves
The remuneration of non-executive directors may not exceed in any financial year the amount fixed by the Company in a general meeting. The Companies Act requires that remuneration to non-executive directors may be paid only in accordance with a special resolution approved by shareholders within the previous two years.
Time limit for dividend entitlement
All unclaimed monies that are due to any shareholder/s shall be held by the company in trust for an indefinite period until lawfully claimed by such shareholder/s, subject to the Prescription Act, 1969 as amended or any other law which governs the law of prescription.
Staggered director elections & cumulative voting
At each annual general meeting of the Company one-third of the directors shall retire and be eligible for re-election. No provision is made for cumulative voting.
Sinking fund provisions and liability to further capital calls
There are no sinking fund provisions in the MOI attaching to any class of the company shares, and the company does not subject shareholders to liability to further capital calls.
Provision that would delay/prevent change of control
The Companies Act provides that companies which propose to merge or amalgamate must enter into a written agreement setting out the terms thereof. They must prove that upon implementation of the amalgamation or merger each will satisfy the solvency and liquidity test. Companies involved in disposals, amalgamations or mergers, or schemes of arrangement must obtain a compliance certificate from the Takeover Regulation Panel, pass special resolutions and in some instances they must obtain an independent expert report.
10C. MATERIAL CONTRACTS
ZAR500 million General Banking Facility and ZAR1,500 million Revolving Credit Facility
DRDGOLD secured a R500 million general bank facility ("GBF") with Nedbank Limited (acting through its Corporate and Investment banking division) ("Nedbank") on June 28, 2024, as we embark on our expanded capital programme for repositioning in 2028. In addition to the GBF, on July 31, 2024, DRDGOLD entered into a 5-year R1 billion Revolving Credit facility (“RCF”) with a R500 million accordion option with Nedbank.
The GBF bears interest at the South African Prime Interest Rate less 250 basis points nominal annual compounded monthly. DRDGOLD is required to pay a 20 basis points (excluding VAT) per annum unutilised facility fee calculated on the average monthly unutilised portion of the GBF. There are no financial covenants related to the GBF. Pursuant to the conclusion of the RCF described below, an amended and restated facility letter was entered into on August 8, 2024 in order to incorporate the terms of the RCF.
DRDGOLD may elect an interest period of one or three months for a loan drawn down against the RCF facility. Loans with a one month interest period bear interest at JIBAR plus a margin of 1.5779% and loans with a three month interest period bear interest at JBAR plus 1.58%. A commitment fee of 30% of the margin that applies to loans with an interest period of 3 months per annum applies on the available commitment for the availability period. A utilization fee of 0.1% per annum applies on each loan for each day that the aggregate of the loans is more than 33.33% but less than 66.67% of the commitment and 0.2% per annum on each loan for each day that the aggregate of the loans is equal to or more than 66.67% of the commitment. A debt origination fee of 0.25% of the committed R1 billion was applicable.
Relevant financial covenants pertaining to the RCF include that at each measurement date and for the measurement period(1) to which such measurement date relates(i) the interest cover ratio(2) shall not be less than 4 times and (ii) the leverage ratio shall not exceed 2 times net debt(3) to adjusted EBITDA Ratio shall not exceed 2 times.
(1) "Interest Cover" means the ratio of EBITDA to Net Finance Charges in respect of any Relevant Period.
(2) "Total Net Debt" means, at any time, the aggregate amount of all obligations of members of the Group for or in respect of Borrowings
The description of the GBF and the RCF is qualified by reference to the GBF and the RCF agreements filed herewith as Exhibits.
Agreement to construct the RTSF
FWGR is currently constructing the RTSF to complete phase 2 of its life of mine plan and to generate sufficient tailings capacity for further expansion to the western side of Johannesburg by acquiring more resources. In June 2024, FWGR entered into an agreement with Stefanutti Stocks Inland, a division of Stefanutti Stocks Proprietary Limited ("Stefanutti Stocks"), pursuant to which Stefanutti Stocks will construct the RTSF.
The contract price for the construction amounts to R1.3 billion and will be settled based on certain specified payment milestones. Each payment milestone will be determined based on percentage of work completed and a bill of quantities and is expected to be settled in full by fiscal year 2027.
Agreement to purchase BESS
Ergo is currently developing the Solar Power Project to address the existing impact of load shedding, potential future power shortages and escalating electricity prices. The Solar Power Project includes the installation of a battery energy storage system. In May 2023, Ergo entered into an agreement with Nidec ASI SA (“Nidec”), pursuant to which Nidec will supply a Battery Energy Storage System (“BESS”) of the Solar Plant. The BESS forms an integral part of keeping the Ergo plant and Brakpan/Withok TSF operating at planned capacity.
The contract price for the BESS amounts to €62.5 million and will be settled based on certain specified payment milestones. Each payment milestone ranges from 5% to 20% of the contract price and is expected to be settled in full by fiscal year 2025.
10D. EXCHANGE CONTROLS
The following is a summary of the material South African exchange control measures, which has been derived from publicly available documents. The following summary is not a comprehensive description of all the exchange control regulations. The discussion in this section is based on the current law and positions of the South African Government. Changes in the law may alter the exchange control provisions that apply, possibly on a retroactive basis.
Introduction
Dealings in foreign currency, the export of capital and revenue, payments by residents to non-residents and various other exchange control matters in South Africa are regulated by the South African exchange control regulations, or the Regulations. The Regulations form part of the general monetary policy of South Africa. The Regulations are issued under Section 9 of the Currency and Exchanges Act, 1933 (as amended). In terms of the Regulations, the control over South African capital and revenue reserves, as well as the accruals and spending thereof, is vested in the Treasury (Ministry of Finance), or the Treasury.
The Treasury has delegated the administration of exchange controls to the Exchange Control Department of the South African Reserve Bank, or SARB, which is responsible for the day to day administration and functioning of exchange controls. SARB has a wide discretion. Certain banks authorized by the Treasury to co-administer certain of the exchange controls, are authorized by the Treasury to deal in foreign exchange. Such dealings in foreign exchange by authorized dealers are undertaken in accordance with the provisions and requirements of the exchange control rulings, or Rulings, and contain certain administrative measures, as well as conditions and limits applicable to transactions in foreign exchange, which may be undertaken by authorized dealers. Non-residents have been granted general approval, in terms of the Rulings, to deal in South African assets, to invest and disinvest in South Africa.
The Regulations provide for restrictions on exporting capital from the Common Monetary Area consisting of South Africa, Namibia, and the Kingdoms of Lesotho and Swaziland. Transactions between residents of the Common Monetary Area are not subject to these exchange control regulations.
There are many inherent disadvantages to exchange controls, including distortion of the price mechanism, problems encountered in the application of monetary policy, detrimental effects on inward foreign investment and administrative costs associated therewith. The South African Finance Minister has indicated that all remaining exchange controls are likely to be dismantled as soon as circumstances permit. Since 1998, there has been a gradual relaxation of exchange controls. The gradual approach to the abolition of exchange controls adopted by the Government of South Africa is designed to allow the economy to adjust more smoothly to the removal of controls that have been in place for a considerable period of time. The stated objective of the authorities is equality of treatment between residents and non-residents with respect to inflows and outflows of capital. The focus of regulation, subsequent to the abolition of exchange controls, is expected to favor the positive aspects of prudential financial supervision.
The present exchange control system in South Africa is used principally to control capital movements. South African companies are not permitted to maintain foreign bank accounts without SARB approval and, without the approval of SARB, are generally not permitted to export capital from South Africa or hold foreign currency. In addition, South African companies are required to obtain the approval of the SARB prior to raising foreign funding on the strength of their South African statements of financial position, which would permit recourse to South Africa in the event of defaults. Where 75% or more of a South African company's capital, voting power, power of control or earnings is directly or indirectly controlled by non-residents, such a corporation is designated an “affected person” by the SARB, and certain restrictions are placed on its ability to obtain local financial assistance. We are not, and have never been, designated an “affected person” by the SARB.
Foreign investment and outward loans by South African companies are also restricted. In addition, without the approval of the SARB, South African companies are generally required to repatriate to South Africa profits of foreign operations and are limited in their ability to utilize profits of one foreign business to finance operations of a different foreign business. South African companies establishing subsidiaries, branches, offices or joint ventures abroad are generally required to submit financial statements on these operations as well as progress reports to the SARB on an annual basis. As a result, a South African company's ability to raise and deploy capital outside the Common Monetary Area is restricted.
Although exchange controls have been gradually relaxed since 1998, unlimited outward transfers of capital are not permitted at this stage. Some of the more salient changes to the South African exchange control provisions over the past few years have been as follows:
•corporations wishing to invest in countries outside the Common Monetary Area, in addition to what is set out below, apply for permission to enter into corporate asset/share swap and share placement transactions to acquire foreign investments. The latter mechanism entails the placement of the locally quoted corporation's shares with long-term overseas holders who, in payment for the shares, provide the foreign currency abroad which the corporation then uses to acquire the target investment;
•corporations wishing to establish new overseas ventures are permitted to transfer offshore up to R500 million to finance approved investments abroad and up to R500 million to finance approved new investments in African countries on an annual bases. Approval from the SARB is required in advance for investments in excess of R500 million. On application to the SARB, corporations are also allowed to use part of their local cash holdings to finance up to 10% of approved new foreign investments where the cost of these investments exceeds the current limits;
•as a general rule, the SARB requires that more than 10% of equity of the acquired off-shore venture is acquired within a predetermined period of time, as a prerequisite to allowing the expatriation of funds. If these requirements are not met, the SARB may instruct that the equity be disposed of. In our experience the SARB has taken a commercial view on this, and has on occasion extended the period of time for compliance; and
•remittance of directors' fees payable to persons permanently resident outside the Common Monetary Area may be approved by authorized dealers, in terms of the Rulings.
Authorized dealers in foreign exchange may, against the production of suitable documentary evidence, provide forward cover to South African residents in respect of fixed and ascertained foreign exchange commitments covering the movement of goods.
Persons who emigrate from South Africa are entitled to take limited amounts of money out of South Africa as a settling-in allowance. The balance of the emigrant's funds will be blocked and held under the control of an authorized dealer. These blocked funds may only be invested in:
•blocked current, savings, interest bearing deposit accounts in the books of an authorized dealer in the banking sector;
•securities quoted on the JSE and financial instruments listed on the Bond Exchange of South Africa which are deposited with an authorized dealer and not released except temporarily for switching purposes, without the approval of the SARB. Authorized dealers must at all times be able to demonstrate that listed or quoted securities or financial instruments which are dematerialized or immobilized in a central securities depository are being held subject to the control of the authorized dealer concerned; or
•mutual funds.
Aside from the investments referred to above, blocked rands may only be utilized for very limited purposes. Dividends declared out of capital gains or out of income earned prior to emigration remain subject to the blocking procedure. It is not possible to predict when existing exchange controls will be abolished or whether they will be continued or modified by the South African Government in the future.
Sale of Shares
Under present exchange control regulations in South Africa, our ordinary shares and ADRs are freely transferable outside the Common Monetary Area between non-residents of the Common Monetary Area. In addition, the proceeds from the sale of ordinary shares on the JSE on behalf of shareholders who are not residents of the Common Monetary Area are freely remittable to such shareholders. Share certificates held by non-residents will be endorsed with the words “non-resident,” unless dematerialized.
Dividends
Dividends declared in respect of shares held by a non-resident in a company whose shares are listed on the JSE are freely remittable.
Any cash dividends paid by us are paid in rands. Holders of ADRs on the relevant record date will be entitled to receive any dividends payable in respect of the shares underlying the ADRs, subject to the terms of the deposit agreement entered on August 12, 1996, and as amended and restated, between the Company and The Bank of New York, as the depository. Subject to exceptions provided in the deposit agreement, cash dividends paid in rand will be converted by the depositary to dollars and paid by the depositary to holders of ADRs, net of conversion expenses of the depositary, in accordance with the deposit agreement. The depositary will charge holders of ADRs, to the extent applicable, taxes and other governmental charges and specified fees and other expenses.
Voting rights
There are no limitations imposed by South African law or by our MOI on the right of non-South African shareholders to hold or vote our ordinary shares.
10E. TAXATION
Material South African Income Tax Consequences
The following is a summary of material income tax considerations under South African income tax law. No representation with respect to the consequences to any particular purchaser of our securities is made hereby. Prospective purchasers are urged to consult their tax advisers with respect to their particular circumstances and the effect of South African or other tax laws to which they may be subject.
South Africa imposes tax on worldwide income of South African residents. Generally, individuals not resident in South Africa do not pay tax in South Africa except in the following circumstances:
Income Tax and Withholding Tax on Dividends
Non-residents will pay income tax on any amounts received by or accrued to them from a source within (or deemed to be within) South Africa. Interest earned by a non-resident on a debt instrument issued by a South African company will be regarded as being derived from a South African source but will be regarded as exempt from taxation in terms of Section 10(1)(i) of the South African Income Tax Act, 1962 (as amended), or the Income Tax Act. This exemption applies to so much of any interest and dividends (which are not otherwise exempt) received from a South African source not exceeding (a) R34,500 if the taxpayer is 65 years of age or older or (b) R23,800 if the taxpayer is younger than 65 years of age at the end of the relevant tax year.
No withholding tax is deductible in respect of interest payments made to non-resident investors.
Section 64F of the amendments to the Income Tax Act as set out in Part VIII in Chapter II of the Income Tax Act sets out beneficial owners who are exempt from the dividend tax which includes resident companies receiving a dividend after the effective date, being April 1, 2012. The Convention between the United States of America and the Republic of South Africa for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains, or the Tax Treaty, would limit the rate of this tax with respect to dividends paid on ordinary shares or ADRs to a U.S. resident (within the meaning of the Tax Treaty) to 5% of the gross amount of the dividends if such U.S. resident is a company which holds directly at least 10% of our voting stock and 20% of the gross amount of the dividends in all other cases.
The above provisions shall not apply if the beneficial owner of the dividends is resident in the United States, carries on business in South Africa through a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed base situated in South Africa, and the dividends are attributable to such permanent establishment or fixed base.
In fiscal years 2024 and 2023, the tax rates for taxable mining income for Ergo was nil and 14% respectively and for FWGR was 25% and 30% respectively. The gold mining tax formula for determining the South African gold mining tax rate for fiscal 2023 was Y = 33 - 165/X (fiscal year 2022: Y = 34 - 170/X) where Y is the percentage rate of tax payable and X is the ratio of taxable income, net of any qualifying capital expenditure that bears to gold mining income derived, expressed as a percentage. The tax rate for non-mining taxable income was 27% and 28% for fiscal years 2023 and 2022 respectively.
On February 23, 2022, the Minister of Finance announced that the corporate income tax (“CIT”) rate will be lowered from 28% to 27% for companies with years of assessment commencing on or after April 1, 2022. The mining operations of the Group accounts for income tax using the gold mining tax formula as opposed to the CIT rate. The gold mining tax formula was changed to Y = 33 - 165/X for years of assessment commencing on or after April 1, 2022. It was further announced that the lowering of the CIT rate will be implemented alongside additional amendments to broaden the CIT base by limiting interest deductions and assessed losses. Section 23M which limits the deduction of interest payable to certain parties who are not subject to tax was significantly widened. A maximum of R1 million or 80% of assessed losses (whichever is greater) is permitted to be set-off against taxable income.
With effect from April 1, 2014, Section 8F of the Income Tax Act results in any amount of interest which is incurred in respect of a “hybrid debt instrument” is deemed to be a dividend in specie declared by the payor and received by the recipient which is exempt from income tax, as opposed to interest which is taxable. The terms of some of our intercompany loans cause the affected loans to be deemed as “hybrid debt instruments” and the interest thereof to be deemed to be an exempt dividend in specie. This characterization of the affected loans as a “hybrid debt instrument” was not impacted by subsequent amendments to Section 8F of the Income Tax Act that became effective in fiscal year 2017.
U.S. Federal Income Tax Considerations
The following is a summary of the U.S. federal income tax considerations generally applicable to the U.S. Holder ownership and disposition of ordinary shares or ADRs. Unless otherwise indicated, this discussion addresses only U.S. Holders who hold ordinary shares or ADRs as capital assets (generally, property held for investment) for U.S. federal income tax purposes. This discussion is based upon the provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations promulgated thereunder, judicial decisions, published rulings of the Internal Revenue Service (the “IRS”), administrative pronouncements and other relevant authorities, as well as on the income tax treaty between the United States and South Africa (the “Treaty”), all as in effect on the date hereof and all of which are subject to differing interpretations and change, possibly on a retroactive basis. There can be no assurance that the IRS would not assert, or that a court would not sustain, a position contrary to any of the considerations discussed herein.
This summary does not address U.S. federal estate, gift or other non-income tax considerations, the alternative minimum tax, the Medicare tax on certain net investment income, or any state, local or non-U.S. tax considerations, relating to the ownership or disposition of ordinary shares or ADRs, nor does it address all aspects of U.S. federal income taxation that may be relevant to U.S. Holders in light of their particular circumstances or that may be relevant to certain types of U.S. Holders subject to special treatment under U.S. federal income tax law (such as dealers in securities or currencies, partnerships or other pass-through entities, banks and other financial institutions, traders in securities that elect mark-to-market treatment, insurance companies, tax-exempt organizations (including private foundations), certain expatriates or former long-term residents of the United States, persons holding ordinary shares or ADRs as part of a “hedge,” “conversion transaction,” “synthetic security,” “straddle,” “constructive sale” or other integrated investment, persons who acquired the ordinary shares or ADRs upon the exercise of employee stock options or otherwise as compensation, persons whose functional currency is not the U.S. dollar, or persons that actually or constructively own ten percent or more of the voting power or value of our shares).
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of ordinary shares or ADRs that is, for U.S. federal income tax purposes:
•a citizen or individual resident of the United States;
•a corporation (or any entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia;
•an estate the income of which is subject to U.S. federal income tax without regard to its source; or
•a trust (i) if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) if the trust has made a valid election to be treated as a U.S. person.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) owns any ordinary shares or ADRs, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Partnerships (or other entities or arrangements treated as partnerships for U.S. federal income tax purposes) holding any ordinary shares or ADRs and their partners should consult their tax advisors regarding an investment in ordinary shares or ADRs.
U.S. Holders of ordinary shares or ADRs should consult their tax advisors regarding the U.S. federal income tax considerations applicable to the ownership and disposition of ordinary shares or ADRs in light of their particular circumstances as well as any considerations to them arising under the tax laws of any foreign, state or local taxing jurisdiction.
U.S. Holders of ADRs
For U.S. federal income tax purposes, a U.S. Holder of ADRs will be treated as the owner of the ordinary shares represented by such ADRs. Exchanges of ordinary shares for ADRs and ADRs for ordinary shares will generally not be subject to U.S. federal income tax.
Distributions
Subject to the discussion below under the heading “Passive Foreign Investment Company”, the gross amount of any distributions received by a U.S. Holder on ordinary shares or ADRs (including any amounts withheld in respect of South African withholding taxes) will generally be subject to tax to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, and will be includible in the gross income of a U.S. Holder on the day actually or constructively received. For U.S. federal income tax purposes, the gross amount of any distributions received by a U.S. Holder will generally equal the U.S. dollar value of the sum of the South African rand payments made (including any amounts withheld in respect of South African withholding taxes), determined at the “spot rate” on the date the dividend distribution is includable in such U.S. Holder's income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date a U.S. Holder includes the dividend payment in income to the date such holder converts the payment into U.S. dollars will be treated as ordinary income or loss.
Distributions, if any, in excess of our current or accumulated earnings and profits will constitute a non-taxable return of capital and will be applied against and reduce the U.S. Holder's basis in the ordinary shares or ADRs. To the extent that distributions exceed the U.S. Holder's tax basis in the ordinary shares or ADRs, as applicable, the excess generally will be treated as capital gain, subject to the discussion below under the heading “Passive Foreign Investment Company”. We do not intend to calculate our earnings or profits for U.S. federal income tax purposes. U.S. Holders should therefore assume that any distributions on our ordinary shares or ADRs will constitute dividend income.
An individual or other non-corporate U.S. Holder may be subject to tax on any such dividends at the lower capital gain tax rate applicable to “qualified dividend income,” provided that certain conditions are satisfied, including that (1) the ordinary shares or ADRs are readily tradable on an established securities market in the United States, or we are eligible for the benefits of a qualifying income tax treaty, (2) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for the taxable year in which the dividend is paid and the preceding taxable year, and (3) certain holding period requirements are met. Dividend income derived with respect to the ordinary shares or ADRs will not be eligible for the dividends received deduction generally allowed to a U.S. corporation. U.S. Holders should consult their tax advisors regarding the U.S. federal income tax rate that will be applicable to their receipt of any dividends paid with respect to the ordinary shares and ADRs.
For U.S. foreign tax credit purposes, dividends received on ordinary shares or ADRs common shares will generally be treated as income from foreign sources and will generally constitute passive category income. Subject to certain conditions and limitations, a U.S. Holder eligible for the benefits of an applicable income tax treaty may be eligible to claim a foreign tax credit in respect of any South African income taxes paid or withheld with respect to dividends on ordinary shares or ADRs to the extent such taxes are nonrefundable under the Treaty. The rules governing foreign tax credits are complex, and recently issued final U.S. Treasury regulations (“Final FTC Regulations”) have imposed additional requirements that must be met for a foreign tax to be creditable for U.S. Holders that do not elect to apply, or do not qualify for, the benefits of the Treaty. A recent notice from the IRS indicates that the U.S. Treasury and the IRS are considering proposing amendments to such regulations and allows taxpayers, subject to certain conditions, to defer the application of many aspects of such regulations for taxable years ending on or before December 31, 2023 (the notice also indicates that the U.S. Treasury and the IRS are considering whether, and under what conditions, to provide additional temporary relief for later taxable years). Alternatively, a U.S. Holder may elect to deduct such taxes in computing its taxable income for U.S. federal income tax purposes. A U.S. Holder’s election to deduct foreign taxes instead of claiming foreign tax credits applies to all creditable foreign income taxes paid or accrued in the relevant taxable year. The rules regarding foreign tax credits and the deductibility of foreign taxes are complex. All U.S. Holders should consult their tax advisors regarding the availability of foreign tax credits and the deductibility of foreign taxes in light of their particular circumstances.
Passive Foreign Investment Company
A non-U.S. corporation, such as our company, will be classified as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for any taxable year if either (i) 75% or more of our gross income for such year, including our pro rata share of the gross income of any company in which we are considered to own 25% or more of the shares by value, consists of certain types of “passive income” or (ii) 50% or more of the value of our assets (determined on the basis of a quarterly average) during such year, including our pro rata share of the assets of any company in which we are considered to own 25% or more of the shares by value, is attributable to assets that produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. Passive assets are those which give rise to passive income and include assets held for investment, as well as cash, assets readily convertible into cash, and (subject to certain exceptions) working capital.
If we are a PFIC for any taxable year during which a U.S. Holder holds ordinary shares or ADRs, the U.S. Holder would be subject to special rules with respect to any (i) gain recognized upon the disposition of the ordinary shares or ADRs and (ii) receipt of an excess distribution (generally, any distributions to a U.S. Holder during a taxable year that is greater than 125% of the average amount of distributions received by such U.S. Holder during the three preceding taxable years in respect of the ordinary shares or ADRs or, if shorter, such U.S. Holder's holding period for the ordinary shares or ADRs). Under these rules:
•the gain or excess distribution will be allocated ratably over a U.S. Holder's holding period for the ordinary shares or ADRs, as applicable;
•amounts allocated to the taxable year of the excess distribution or of the sale or other disposition and to any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxed as ordinary income;
•amounts allocated to each prior year (other than the current taxable year or a pre-PFIC year) will be taxed at the highest tax rate in effect applicable to the U.S. Holder for that year; and
•such amounts will be increased by an additional tax equal to interest on the resulting tax deemed deferred with respect to such years (other than the current taxable year or a pre-PFIC year).
Although we generally will be treated as a PFIC as to any U.S. Holder if we are a PFIC for any year during a U.S. Holder's holding period, if we cease to be a PFIC, the U.S. Holder may avoid PFIC classification for subsequent years if such holder elects to recognize gain based on the unrealized appreciation in the ordinary shares or ADRs through the close of the tax year in which we cease to be a PFIC.
A U.S. Holder of a PFIC is required to file an annual report with the IRS containing such information as the U.S. Secretary of Treasury may require.
A U.S. Holder of ordinary shares or ADRs that are treated as “marketable stock” may be able to avoid the imposition of the special tax and interest charge described above by making a mark-to-market election. Pursuant to this election, the U.S. Holder would include in ordinary income or loss for each taxable year an amount equal to the difference between, as of the close of the taxable year, the fair market value of the ordinary shares or ADRs and the U.S. Holder's adjusted tax basis in such ordinary shares or ADRs. Losses would be allowed only to the extent of net mark-to-market gain previously included by the U.S. Holder under the election for prior taxable years. If a U.S. Holder makes a mark-to-market election, then, in any taxable year for which we are classified as a PFIC, tax rules that apply to distributions by corporations that are not PFICs would apply to distributions by us (except that the lower applicable capital gains rate for qualified dividend income would not apply). If a U.S. Holder makes a valid mark-to-market election and we subsequently cease to be classified as a PFIC, the U.S. Holder will not be required to take into account the mark-to-market income or loss described above during any period that we are not classified as a PFIC. In addition, because, as a technical matter, a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. U.S. Holders should consult their tax advisors with respect to the application and effect of making the mark-to-market election for their ordinary shares or ADRs.
In the case of a U.S. Holder who holds ordinary shares or ADRs and who does not make a mark-to-market election, the special tax and interest charge described above will not apply if such holder makes an election to treat us as a “qualified electing fund” in the first taxable year in which such holder owns the ordinary shares or ADRs and if we comply with certain reporting requirements. However, we do not intend to provide the information necessary for U.S. Holders to make qualified electing fund elections.
We believe that we were not a PFIC for our taxable year ended June 30, 2023. There can be no assurance regarding our PFIC status for the current taxable year or foreseeable future taxable years, however, because our PFIC status is a factual determination made annually that will depend, in part, upon the composition of our income and assets. The value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined in part by reference to the market price of our ordinary shares or ADRs from time to time (which may be volatile). Because we will generally take into account our current market capitalization in estimating the value of our goodwill and other unbooked intangibles, our PFIC status for the current taxable year and foreseeable future taxable years may be affected by our market capitalization.
The rules relating to PFICs are complex. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to their investments in our ordinary shares or ADRs.
Disposition of Ordinary Shares or ADRs
A U.S. Holder will generally recognize gain or loss on the sale, exchange, or other taxable disposition of ordinary shares or ADRs in an amount equal to the difference between the U.S. dollar value of the amount realized on the disposition and such holder's adjusted tax basis in the ordinary shares or ADRs. Subject to the discussion above under the heading “Passive Foreign Investment Company”, such gain or loss will generally be long-term capital gain or loss if the U.S. Holder’s holding period in the ordinary shares or ADRs exceeds one year. Long-term capital gains of individuals and certain other non-corporate U.S. Holders are generally eligible for a reduced rate of taxation. The deductibility of capital losses is subject to limitations.
Gain or loss recognized by a U.S. Holder on the taxable disposition of ordinary shares or ADRs will generally be treated as U.S. source gain or loss for U.S. foreign tax credit purposes. As a result of recent changes to the foreign tax credit rules (and subject to the IRS notice described above), South African taxes (if any) imposed on disposition gains generally will not be creditable against a U.S. Holder’s U.S. federal income tax liability. U.S. Holders should consult their own tax advisors as to their ability to obtain an exemption from any South African taxes imposed on disposition gains, and the U.S. federal income tax implications of any South African taxes on disposition gains in their particular circumstances.
In the case of a cash basis U.S. Holder who receives rands in connection with the taxable disposition of ordinary shares or ADRs, the amount realized will be based on the spot rate as determined on the settlement date of such exchange. A U.S. Holder who receives payment in rand and converts rand into U.S. dollars at a conversion rate other than the rate in effect on the settlement date may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss.
An accrual basis U.S. Holder may elect the same treatment required of cash basis taxpayers with respect to a taxable disposition of ordinary shares or ADRs, provided that the election is applied consistently from year to year. Such election may not be changed without the consent of the IRS. In the event that an accrual basis U.S. Holder does not elect to be treated as a cash basis taxpayer, such U.S. Holder may have a foreign currency gain or loss for U.S. federal income tax purposes because of the differences between the U.S. dollar value of the currency received prevailing on the trade date and the settlement date. Any such currency gain or loss will be treated as ordinary income or loss and would be in addition to gain or loss, if any, recognized by such U.S. Holder on the disposition of such ordinary shares or ADRs.
Backup Withholding and Information Reporting
Payments of dividends on, and proceeds from the sale or other taxable disposition of, ordinary shares or ADRs by a U.S. paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable regulations. Backup withholding may apply to these payments if the U.S. Holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to comply with applicable certification requirements. Certain U.S. Holders are not subject to backup withholding. U.S. Holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.
Information with respect to Foreign Financial Assets
Certain U.S. Holders may be required to report on IRS Form 8938 information relating to an interest in ordinary shares or ADRs, subject to certain exceptions (including an exception for assets held in accounts maintained by certain financial institutions, although the account itself may be reportable if held at a non-U.S. financial institution). U.S. Holders should consult their tax advisors regarding the effect, if any, of this reporting requirement on their acquisition, ownership and disposition of ordinary shares or ADRs.
10F. DIVIDENDS AND PAYING AGENTS
Not applicable.
10G. STATEMENT BY EXPERTS
Not applicable.
10H. DOCUMENTS ON DISPLAY
DRDGOLD files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may access this information at the SEC’s home page (http://www.sec.gov). Copies of the documents referred to herein may be inspected at DRDGOLD Limited’s offices by contacting DRDGOLD Limited, P.O. Box 390, Maraisburg, Johannesburg, South Africa 1700. Attn: Company Secretary. Tel No. +27-11-470-2600.
10I. SUBSIDIARY INFORMATION
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
General
In the normal course of our operations, we are exposed to market risk, including commodity price, foreign currency, interest and credit risks. Refer to Item 18. ‘‘Financial Statements - Note 27 - Financial instruments’’ of the consolidated financial statements for a qualitative and quantitative discussion of our exposure to these market risks.
Our long-term strategy is to remain unhedged and to keep borrowings to a minimum. During fiscal year 2024 we did not hold or issue derivative financial instruments for speculative purposes, nor did we hedge forward gold sales. However, in instances where we need to incur medium-term borrowings to finance growth projects that introduce some liquidity risk to the Group, we may mitigate this liquidity risk by entering into an arrangement to provide price protection against a possible decrease in the rand gold price while borrowings are in place. For example in fiscal 2019 we entered into a hedging instrument in the form of a collar in respect of 50,000 ounces of gold that expired at the end of May 2019.
Commodity price risk
The rand market price of gold has a significant effect on our results of operations, our ability and the ability of our subsidiaries to pay dividends and undertake capital expenditures, and the market price of our ordinary shares or ADSs. Historically, rand gold prices have fluctuated widely and are affected by numerous industry factors over which we have no control. The aggregate effect of these factors on the rand gold price is impossible for us to predict. The rand price of gold may not remain at a level allowing us to economically exploit our reserves.
It is our long-term policy not to hedge this commodity price risk. However, in instances where we need to incur medium-term borrowings to finance growth projects that introduce some liquidity risk to the Group, we may mitigate this liquidity risk by entering into an arrangement to provide price protection against a possible decrease in the rand gold price while borrowings are in place.
Concentration of credit risk
Credit risk is the risk of financial loss to us if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from our trade and other receivables from customers.
The Group manages its exposure to credit risk on cash and cash equivalents and Guardrisk Cell Captive (classified as investments in rehabilitation and other funds in the statement of financial position), mandating the Guardrisk Cell Captive to diversify the funds across a number of major financial institutions, as well as investing funds in low-risk, interest-bearing cash and cash equivalents.
The Group manages its exposure to credit risk on trade receivables by selling gold on a cash on delivery basis. The Group manages its exposure to credit risk on other receivables by dealing with a number of counterparties, ensuring that these counterparties are of good credit standing and transacting on a secured or cash basis where considered required. Receivables are regularly monitored and assessed for recoverability.
Foreign currency risk
Our reporting and functional currency is South African rand. Although gold is sold in US dollars, the Company is obliged to convert this into rands. No hedges were entered into during fiscal year 2024. We are thus exposed to fluctuations in the US dollar/rand exchange rate. Foreign exchange fluctuations affect the cash flow that we will realize from our operations as gold is sold in US dollars, while production costs are incurred primarily in rands. Our results are positively affected when the US dollar strengthens against the rand and adversely affected when the US dollar weakens against the rand. Our cash and cash equivalent balances are mostly held in South African rands.
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| Liquidity risk - Long-term debt |
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Set out below is an analysis of our debt as at June 30, 2024 consisting of capital and interest related to lease liabilities. All of our long-term debt is denominated in South African rand. |
|
Interest rate |
|
|
|
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Total |
|
|
6.4% - 10.5% |
|
|
|
|
R'm |
|
Repayment period |
|
|
|
|
2025 |
|
|
9.5 |
|
2026 |
|
|
9.5 |
|
2027 |
|
|
5.6 |
|
2028 |
|
|
3.9 |
|
2029 |
|
|
2.4 |
|
2030 |
|
|
0.9 |
|
2031 |
|
|
0.9 |
|
2032 |
|
|
0.9 |
|
2033 |
|
|
0.9 |
|
2034 |
|
|
0.9 |
|
2035 |
|
|
0.9 |
|
2036 |
|
|
0.9 |
|
2037 |
|
|
0.9 |
|
Total |
|
|
38.1 |
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|
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|
Based on our fiscal year 2024 financial results, a hypothetical 100 basis points (increase)/decrease in interest rate activity would (increase)/decrease our interest expense by R0.3 million. |
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
See Item 9. "The Offer and Listing Details".
12A. DEBT SECURITIES
Not applicable.
12B. WARRANTS AND RIGHTS
Not applicable.
12C. OTHER SECURITIES
Not applicable.
12D. AMERICAN DEPOSITARY SHARES
Depositary Fees and Charges
DRDGOLD’s American Depository Shares, or ADSs, each representing ten of DRDGOLD’s ordinary shares, are traded on the New York Stock Exchange, or NYSE under the symbol “DRD” (until December 29, 2011 our ADSs were traded on the Nasdaq Capital Market under the symbol “DROOY”). The ADSs are evidenced by American Depository Receipts, or ADRs, issued by The Bank of New York Mellon, as Depository under the Amended and Restated Deposit Agreement dated as of August 12, 1996, as amended and restated as of October 2, 1996, as further amended and restated as of August 6, 1998, as further amended and restated July 23, 2007, among DRDGOLD Limited, The Bank of New York Mellon and owners and beneficial owners of ADRs from time to time. ADR holders may have to pay the following service fees to the Depositary:
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| Service |
|
Fees (USD) |
| Issuance of ADSs, including issuances resulting from a distribution of ordinary shares or rights |
$5.00 (or less) per 100 ADSs (or portion thereof)1 |
| Cancellation of ADSs for the purpose of withdrawal, including if the Deposit Agreement terminates |
$5.00 (or less) per 100 ADSs (or portion thereof)1 |
| Distribution of cash dividends or other cash distributions |
2 cents (or less) per ADS (or portion thereof) |
| Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS registered holders |
$5.00 (or less) per 100 ADSs (or portion thereof) |
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|
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1 These fees are typically paid to the Depositary by the brokers on behalf of their clients receiving the newly-issued ADSs from the Depositary or delivering the ADSs to the Depositary for cancellation. The brokers in turn charge these transaction fees to their clients. |
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In addition, ADR holders are responsible for certain fees and expenses incurred by the Depositary on their behalf including |
| (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of ordinary shares generally on the share register and applicable to transfers of ordinary shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, and (4) such expenses as are incurred by the Depositary in the conversion of foreign currency to U.S. Dollars. |
The Depositary collects its fees for delivery and surrender of ADSs directly from investors depositing or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary, collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The Depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
Depositary Payments
The Bank of New York Mellon, as Depositary, has agreed to reimburse DRDGOLD an annual amount of $75,000 mainly consisting of accumulated contributions towards the Company’s investor relations activities (including investor meetings, conferences and fees of investor relations service vendors). After the deduction of other fees, the annual reimbursement for the year ended June 30, 2024 amounts to approximately $75,000 (June 30, 2023: $75,000, June 30, 2022: $11,721). DRDGOLD is also entitled to a 25% share of the dividend fees which amounts to approximately $90,988 for the year ended June 30, 2024 (June 30, 2023: $90,779, June 30, 2022: $93,565).
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
There have been no material defaults in the payment of principal, interest, a sinking or purchase fund installment, or any other material defaults with respect to any indebtedness of ours.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None
ITEM 15. CONTROLS AND PROCEDURES
15A. Disclosure Controls and Procedures
As of June 30, 2024, our management, with the participation of our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as this term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2024.
Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms and that such information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
There are inherent limitations in the effectiveness of any system of disclosure controls and procedures. These limitations include the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, any such system can only provide reasonable assurance of achieving the desired control objectives.
15B. Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Under Section 404(a) of the Sarbanes Oxley Act of 2002, management is required to assess our internal controls surrounding the financial reporting process as at the end of each fiscal year. Based on that assessment, management is to determine whether or not our internal controls over financial reporting are effective.
Internal control over financial reporting includes those policies and procedures that:
•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that our receipts and expenditures are being made only in accordance with authorizations of our management and board; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Instead, it must be noted that even those systems that management deems to be effective can only provide reasonable assurance with respect to the preparation and presentation of our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or the degree of compliance with the policies and procedures.
Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2024. In making this assessment, our management used the criteria set forth by the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment and those criteria, our management concluded that as of June 30, 2024 our internal control over financial reporting was effective.
15C. Attestation Report of the independent registered public accounting firm
The effectiveness of internal control over financial reporting as of June 30, 2024 was audited by BDO South Africa Inc., independent registered public accounting firm, as stated in their report on page F-1 of this Form 20-F.
15D. Changes in Internal Control Over Financial Reporting
During the year ended June 30, 2024, there have not been any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Mr. J.A. Holtzhausen, Chairman of the Audit Committee, has been determined by our board to be an audit committee financial expert within the meaning of the Sarbanes-Oxley Act, in accordance with the Rules of the New York Stock Exchange, or NYSE, and rules promulgated by the SEC and independent both under the New York Stock Exchange Rules and the South African Johannesburg Stock Exchange Rules. The board is satisfied that the skills, experience and attributes of the members of the Audit Committee are sufficient to enable those members to discharge the responsibilities of the Audit Committee.
ITEM 16B. CODE OF ETHICS
We have adopted a Code of Conduct that applies to all senior executives including our Non-Executive Chairman, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Directors at our mining operations as well as all other employees. In the 2022 fiscal year we updated the Code of Compliance in compliance with the South African Protection of Personal Information Act. The Code of Conduct can be accessed on the Company’s website at the following web address: www.drdgold.com/about-us/governance.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
BDO South Africa Inc. has served as our independently registered public accountant for the fiscal years ended June 30, 2024 and 2023. The audited financial statements appear in this Annual Report. The Annual General Meeting elects the auditors annually.
The following table presents the aggregate fees for professional audit services and other services rendered by BDO South Africa Inc. to us in fiscal year 2024 and 2023 respectively:
Audit Fees
Audit fees billed for the annual audit services engagement, which are those services that the external auditor reasonably can provide, include the company audit; statutory audits; comfort letters and consents; attest services; and assistance with and review of documents filed with the SEC.
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Auditors' remuneration |
Year ended June 30, |
|
2024 |
2023 |
|
R m |
R m |
| Audit fees |
8.0 |
7.9 |
Audit related fees |
— |
— |
Tax fees |
— |
— |
| All other fees |
0.6 |
0.6 |
| Total |
8.6 |
8.5 |
All Other Fees
The all other fees during fiscal year 2024 consist of the following:
•R0.6 million with respect to limited assurance provided by BDO Advisory Services (Pty) Ltd on specified items contained in our Integrated Report for fiscal year 2024;
The all other fees during fiscal year 2023 consist of the following:
•R0.6 million with respect to limited assurance provided by BDO Advisory Services (Pty) Ltd on specified items contained in our Integrated Report for fiscal year 2023.
The Audit Committee is directly responsible for recommending the appointment, re-appointment and removal of the external auditors as well as the remuneration and terms of engagement of the external auditors. The committee pre-approves, and has pre-approved, all non-audit services provided by the external auditors. The Audit Committee considered all of the fees mentioned above and determined that such fees are compatible with maintaining BDO South Africa Inc's independence.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not applicable
ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
As a foreign private issuer with shares listed on the NYSE, we are subject to corporate governance requirements imposed by NYSE. Under section 303A.11 of the NYSE Listing Standards, a foreign private issuer such as us may follow its home country corporate governance practices in lieu of certain of the NYSE Listing Standards on corporate governance. DRDGOLD's home country corporate governance practices are regulated by the Listing Requirements of the JSE (the "JSE Listing Requirements"). We are also exempt from certain NYSE corporate governance requirements as a "controlled company". The following paragraphs summarize the significant ways in which DRDGOLD's home country corporate governance standards and its corporate governance practices differ from those followed by domestic companies under the NYSE Listing Standards.
Shareholder meeting quorum requirements
•Section 310.00 of the NYSE Listing Standards provides that the quorum required for any meeting of holders of common stock should be sufficiently high to insure a representative vote. Consistent with the practice of companies incorporated in South Africa, our Memorandum of Incorporation requires a quorum of three members present with sufficient voting powers in person or by proxy to exercise in aggregate 25% of the voting rights and we have elected to follow our home country rule.
•The NYSE Listing Standards require that the non-management directors of US-listed companies meet at regularly scheduled executive sessions without management. The JSE Listings Requirements do not require such meetings of listed company non-executive directors. The board has unrestricted access to all company information, records, documents and property. Directors may, if necessary, take independent professional advice at the Company’s expense and non-executive directors have access to management and may meet separately with management, without the attendance of executive directors.
•The NYSE Listing Standards require U.S. listed companies to have a nominating/corporate governance committee composed entirely of independent directors. The JSE Listing Requirements also require the appointment of such a committee, and stipulate that all members of this committee must be non-executive directors, the majority of whom must be independent. DRDGOLD has a Nominations Committee which currently comprises five non-executive directors, all of whom are independent under the NYSE Listing Standards and the JSE Listing Requirements, except for T.J. Cumming. The Nominations Committee is chaired by the Chairman of DRDGOLD.
•The NYSE Listing Standards require U.S. listed companies to have a compensation committee composed entirely of independent directors. The JSE Listing Requirements merely require the appointment of such a committee but not that its members be independent. DRDGOLD has appointed a Remuneration Committee, currently comprising five board members, all of whom are independent under both the JSE Listing Requirements and the NYSE Listing Standards, except for T.J. Cumming.
ITEM 16H. MINE SAFETY DISCLOSURES
Not applicable
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
ITEM 16J. INSIDER TRADING POLICIES
DRDGOLD has adopted an insider trading policy that aims to ensure compliance with applicable trading laws, rules, regulations and applicable listing requirements. The policy governs the purchase, sale and other dispositions of DRDGOLD's securities by directors, senior management and employees. Refer to "Directors' and Employees' Dealing Policy and Procedures" as contained in Exhibit 11.1 for further details.
ITEM 16K. CYBERSECURITY
Cybersecurity risk management and strategy
DRDGOLD relies on various IT systems and physical infrastructure to support its mining operations including the solar plant and administrative activities which includes data capturing, processing, and storage. In certain instances, such data may be classified as confidential. This reliance exposes to cybersecurity risks including breaches or damage to our systems by computer viruses and system attacks and unauthorised physical or electronic access. Any system failure, accident or security breach could result in business disruption, theft of our intellectual property, disclosure of confidential information, reputational damage or litigation. Refer to item 3D. Risk factors risk entitled “A disruption in our information technology systems, including incidents related to cyber security, could adversely affect our business operations” for a full description.
The Group’s strategy toward cybersecurity is to employ a comprehensive and integrated approach to risk management to identify and evaluate cybersecurity risks and where required disclose cyber incidents. These risks are included in the strategic and operational profiles of the organisation, integrating cyber risks in the enterprise risk management process. To further facilitate the integration, the IT department and Risk and Assurance department engage on a periodic basis to review the risks and implementation of assurance over the design and effectiveness of controls implemented to prevent, mitigate and detect cybersecurity threats.
Employees are mandated to complete cyber security training on a regular basis.
To facilitate the identification and evaluation of cyber security risks, a business intelligence platform which is aligned to internationally recognised standards and frameworks including ISO-27002, NIST 800- 53, NIST CSF and CIS-CSC is used for the following:
•Identification of cybersecurity threats to physical IT infrastructure, systems and networks
•Identification of controls to prevent, mitigate and detect these threats
•Facilitate internal self-assessments on these controls
An external cybersecurity assurance provider is appointed as part of the organisation’s combined assurance program to assess the robustness of the cybersecurity risk assessment process and provide additional assurance over the design and effectiveness of controls implemented.
Use of third-party vendors
Vendor management is considered a very important aspect of cyber security, given the level of digital connectivity applicable to DRDGOLD and its various systems. The Business Intelligence platform is also used to facilitate third party risk assessment for critical vendors which is also integrated into the wider enterprise risk program. In this regard we expect service providers and vendors who access our systems to provide assurance regarding their cyber security posture. We rely on either independent SOC reports or assurance provided by them completing assessments on the cyber security business intelligent platform for cybersecurity described above.
Governance
Role of management
DRDGOLD has an appointed Chief Information and Technology Officer (“CITO”) who is accountable and a head of Cyber Security (“HCS”) who is responsible for the assessment and management of material risks from cyber security threats. The HCS is also responsible for ensuring that any remedial actions reported through the combined assurance program are adequately addressed.
The CITO has over 15 years of experience. The CITO is an invitee to the DRDGOLD executive committee which meets on a bi-weekly basis where he reports back on cybersecurity matters.
Role of the board of directors
DRDGOLD’s board of directors are responsible for providing oversight into the processes implemented by management for the effective management of cybersecurity threats facing the organisation. The board of directors has delegated this responsibility to the Risk Committee. The Audit Committee is kept informed on material cyber risks facing the organisation through the reporting of the general information technology controls in accordance with the Company’s COSO 2013 program.
The Risk department reports quarterly to the Risk Committee on its enterprise risk assessment processes which include cybersecurity risks and reportable cybersecurity incidents.
Incident disclosure
For the year ended June 30, 2024, there were no incidents or risks from cyber security related threats that had, or are reasonably likely to have, a material impact on DRDGOLDs strategy, results of operations or financial condition.
PART III
ITEM 17. FINANCIAL STATEMENTS
Not applicable.
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| ITEM 18 FINANCIAL STATEMENTS |
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| The following annual financial statements and related auditor’s report are filed as part of this Annual Report |
Page |
Report of Independent Registered Public Accounting Firm |
Firm ID: |
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Report for the years ended June 30, 2024 and 2023 - BDO South Africa Inc. |
1368 |
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Report for the year ended June 30, 2022 - KPMG Inc. |
1025 |
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Consolidated statement of profit or loss and other comprehensive income for the years ended June 30, 2024, 2023 and 2022 |
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Consolidated statement of financial position at June 30, 2024 and 2023 |
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Consolidated statement of changes in equity for the years ended June 30, 2024, 2023 and 2022 |
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Consolidated statement of cash flows for the years ended June 30, 2024, 2023 and 2022 |
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| Notes to the consolidated financial statements |
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Note |
About these consolidated financial statements |
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1 |
Use of accounting assumptions, estimates and judgements |
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2 |
New standards, amendments to standards and interpretations |
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3 |
| Performance |
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Revenue |
|
4 |
Results from operating activities |
|
5 |
| Cost of sales |
|
5.1 |
| Other income |
|
5.2 |
| Administration expenses and other costs |
|
5.3 |
Finance income |
|
6 |
Finance expense |
|
7 |
Earnings per share |
|
8 |
| Resource assets and related liabilities |
|
|
Property, plant and equipment |
|
9 |
Right of use assets and lease liabilities |
|
10 |
Provision for environmental rehabilitation |
|
11 |
Investments in rehabilitation and other funds |
|
12 |
| Working capital |
|
|
Cash and cash equivalents |
|
13 |
Cash generated from operations |
|
14 |
Trade and other receivables |
|
15 |
Trade and other payables |
|
16 |
Inventories |
|
17 |
| Tax |
|
|
Income tax |
|
18 |
| Income tax expense |
|
18.1 |
| Deferred tax |
|
18.2 |
| Employee matters |
|
|
Employee benefits |
|
19 |
| Equity settled tong-term incentive scheme |
|
19.1 |
|
|
|
|
|
|
|
|
|
| Transactions with key management personnel |
|
19.2 |
| Capital and equity |
|
Capital management |
|
20 |
Equity |
|
21 |
Stated Share Capital |
|
21.1 |
Dividends |
|
21.2 |
| Disclosure items |
|
|
Interest in subsidiaries |
|
22 |
Operating segments |
|
23 |
Payments made under protest |
|
24 |
Other investments |
|
25 |
Rand Refinery |
|
25.1 |
Contingencies |
|
26 |
| Contingent liability for occupational lung diseases |
|
26.1 |
| Contingent liability for environmental rehabilitation |
|
26.2 |
Contingencies regarding Ekurhuleni Metropolitan Municipality electricity tariff dispute |
|
26.3 |
Contingent liability for the summons received from Benoni Gold Mine |
|
26.4 |
Financial instruments |
|
27 |
Related parties |
|
28 |
Subsequent events |
|
29 |
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
DRDGOLD Limited
Johannesburg, Republic of South Africa
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement of financial position of DRDGOLD Limited (the “Company”) as of June 30, 2024 and 2023, and the related consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for the two years in the period ended June 30, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2024 and 2023, and the results of its operations and its cash flows for the two years in the period ended June 30, 2024, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated October 30, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of the provision for environmental rehabilitation
At June 30, 2024, the Company’s provision for environmental rehabilitation totaled R 616.8 million. As discussed in note 11 to the consolidated financial statements, the Company estimates of the future environmental rehabilitation costs are determined with the assistance of an independent expert and are based on the Company’s environmental management plans, the Company’s life-of-mine (“LOM”) plan which influences the estimated timing of the rehabilitation cash outflows, and the planned method of rehabilitation which in turn is influenced by developments in trends and technology.
We identified the evaluation of the provision for environmental rehabilitation as a critical audit matter. The computation of the net present value of the estimated rehabilitation costs required significant auditor judgment, subjectivity and effort in evaluating (i) management’s determination of the discount rate used in the computation of the present value; (ii) estimates of quantities of economically recoverable gold as indicated in the LOM plan; and (iii) undiscounted rehabilitation cost, which required the use of professionals with specialized skill and knowledge.
The primary procedures we performed to address this critical audit matter included:
•With the support of our valuation specialists, we assessed management’s macro-economic assumptions in their environmental rehabilitation provision by comparing these to available market information. The most significant of these macro-economic assumptions were the risk-free interest rates used in determining the discount rates used in calculating the net present value of the environmental rehabilitation provision.
•Utilizing environmental rehabilitation professionals with specialized skills and knowledge, who assisted in evaluating the results of the Company’s undiscounted estimated environmental costs detailed in the independent environmental expert’s reports. This was performed by:
◦evaluating the objectivity, knowledge, skills and ability of the Company’s independent expert by comparing their professional qualifications, experience and affiliations against industry norms and obtained an understanding of their scope of work; and
◦evaluating the undiscounted estimated environmental costs for a selection of sites by performing site inspections and challenging the planned method of rehabilitation that was determined for each selected site. This was performed by comparing the planned method of rehabilitation to the approved LOM plan, confirming that it is compliant with the environmental management plans as approved by the Department of Mineral Resources and Energy, where applicable, aligned with current industry practices and regulatory requirements.
•Evaluating the objectivity, knowledge, skills and ability of the Company’s independent mineral resources experts, that reviewed management’s mineral reserves and resources estimates, by comparing their professional qualification, experience and affiliation against industry norms.
•Evaluating the mineral resources experts’ reports by vouching a selection of the reported reclamation sites to environmental approvals or mining rights and evaluated the methodology and certain key assumptions used to measure the quantities of economically recoverable gold against industry norms.
•Evaluating the reasonableness of the total estimated quantities of economically recoverable gold as indicated in the LOM plan by agreeing a selection of period-to-period movements to the current period actual recovered gold and increments or adjustments to the data in the mineral resources expert’s report as well as assessing these movements considering our knowledge of the Company’s business and the industry.
•Involving valuation professionals with specialized skills and knowledge, who assisted in evaluating the estimated rand gold price by comparing it to an independently developed range of rand gold prices based on analyst reports.
Evaluation of deferred tax liabilities related to the Ergo and FWGR operations.
At June 30, 2024, the Company’s net deferred tax liability totaled R 934.6 million. As discussed in note 18.2 to the consolidated financial statements, the Company’s deferred tax liabilities related to the Ergo and FWGR operations are calculated by applying a forecast weighted average tax rate to the temporary differences. The calculation of the forecast weighted average tax rate requires the use of assumptions and estimates and are inherently uncertain and could change materially over time, including the Company’s life-of-mine (“LOM”) plan (as discussed in note 9 to the consolidated financial statements) that is applied to calculate the expected future profitability.
We identified the valuation of deferred tax liabilities related to the Ergo and FWGR operations as a critical audit matter. Subjective auditor judgment and specialized skills and knowledge were required to evaluate the expected future profitability, that is based on the LOM plan, which includes certain key assumptions about the estimated quantities of economically recoverable gold and the estimated rand gold price.
The primary procedures we performed to address this critical audit matter included:
•Assessing the objectivity, knowledge, skills and ability of the Company’s independent mineral resources experts, who reviewed management’s mineral reserves and resources estimates, by comparing their professional qualifications, experience and affiliations against industry norms.
•Testing the mineral resources experts’ reports by vouching a selection of the reported reclamation sites to environmental approvals or mining rights and evaluated the methodology and certain key assumptions used to measure the quantities of economically recoverable gold against industry norms.
•Evaluating the reasonableness of the total estimated quantities of economically recoverable gold as indicated in the LOM plan by agreeing a selection of period-to-period movements to the current period actual recovered gold and increments or adjustments to the data in the expert’s report, as well as assessing these movements considering our knowledge of the Company’s business and the industry.
•Utilizing valuation professionals with specialized skills and knowledge, who assisted in evaluating the estimated rand gold price by comparing it to an independently developed range of rand gold prices based on analyst reports.
•Evaluating the Company’s ability to accurately forecast its expected future profitability by comparing the historical projections of the rand gold price and estimated quantities of economically recoverable gold to actual results.
•Performing a sensitivity analyses to assess the impact that changes in the estimated rand gold price and estimated quantities of economically.
/s/ BDO South Africa Inc.
We have served as the Company’s auditor since 2023.
Johannesburg, Republic of South Africa
October 30, 2024
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
DRDGOLD Limited
Johannesburg, Republic of South Africa
Opinion on Internal Control over Financial Reporting
We have audited DRDGOLD Limited (the “Company’s”) internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated statement of financial position of the Company as of June 30, 2024 and 2023, the related consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for the two years in the period ended June 30, 2024, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated October 30, 2024, expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 15B, Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ BDO South Africa Inc.
We have served as the Company’s auditor since 2023.
Johannesburg, Republic of South Africa
October 30, 2024
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
DRDGOLD Limited
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows of DRDGOLD Limited and subsidiaries (the Company), for the year ended June 30, 2022 and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended June 30, 2022, in conformity with the International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ KPMG Inc.
We served as the Company’s auditor from 2003 to 2022.
Johannesburg, Republic of South Africa
October 28, 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended June 30, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
| Revenue |
4 |
6,239.7 |
|
5,496.3 |
|
5,118.5 |
| Cost of sales |
5.1 |
(4,429.9) |
|
(3,911.0) |
|
(3,741.5) |
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit from operating activities |
|
1,809.8 |
|
1,585.3 |
|
1,377.0 |
| Other income |
5.2 |
2.0 |
|
10.4 |
|
91.3 |
| Administration expenses and other costs |
5.3 |
(199.3) |
|
(172.9) |
|
(161.2) |
|
|
|
|
|
|
|
|
|
|
|
| Results from operating activities |
|
1,612.5 |
|
1,422.8 |
|
1,307.1 |
| Finance income |
6 |
280.8 |
|
334.3 |
|
225.8 |
| Finance expense |
7 |
(76.4) |
|
(70.7) |
|
(74.8) |
|
|
|
|
|
|
|
|
|
|
|
| Profit before tax |
|
1,816.9 |
|
1,686.4 |
|
1,458.1 |
| Income tax |
18.1 |
(488.2) |
|
(405.0) |
|
(334.3) |
|
|
|
|
|
|
| Profit for the year |
|
1,328.7 |
|
1,281.4 |
|
1,123.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income |
|
|
|
|
| Items that will not be reclassified to profit or loss, net of tax |
|
|
|
|
| Net fair value adjustment on equity investments at fair value through other comprehensive income |
|
11.7 |
|
17.9 |
|
(9.1) |
|
|
|
|
|
|
| Fair value adjustment on equity investments at fair value through other comprehensive income |
25 |
11.8 |
|
17.2 |
|
(15.7) |
|
| Deferred tax thereon |
18.2 |
(0.1) |
|
0.7 |
|
6.6 |
|
|
|
|
|
|
| Total other comprehensive income for the year |
|
11.7 |
|
17.9 |
|
(9.1) |
|
|
|
|
|
| Total comprehensive income for the year |
|
1,340.4 |
|
1,299.3 |
|
1,114.7 |
|
|
|
|
|
| Earnings per share |
|
|
|
|
|
|
|
|
|
| Basic earnings per share (SA cents per share) |
8 |
154.3 |
|
149.1 |
|
131.2 |
| Diluted basic earnings per share (SA cents per share) |
8 |
153.5 |
|
148.2 |
|
130.6 |
|
|
|
|
|
|
|
|
|
|
| The accompanying notes are an integral part of these consolidated financial statements. |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at June 30, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts in R million |
Note |
2024 |
2023 |
|
|
|
|
| ASSETS |
|
|
|
| Non-current assets |
|
7,956.8 |
4,940.3 |
| Property plant and equipment |
9 |
6,794.9 |
3,909.5 |
| Investments in rehabilitation and other funds |
12 |
912.5 |
789.7 |
| Payments made under protest |
24 |
45.6 |
39.7 |
| Other investments |
25 |
180.4 |
168.6 |
| Deferred tax asset |
18.2 |
23.4 |
32.8 |
|
|
|
|
| Current Assets |
|
1,493.6 |
3,214.2 |
| Inventories |
17 |
460.0 |
413.6 |
| Current tax receivable |
|
33.1 |
40.6 |
| Trade and other receivables |
15 |
479.0 |
288.6 |
| Cash and cash equivalents |
13 |
521.5 |
2,471.4 |
|
|
|
|
| TOTAL ASSETS |
|
9,450.4 |
8,154.5 |
|
|
|
|
| EQUITY AND LIABILITIES |
|
|
|
| Equity |
|
6,889.4 |
6,274.1 |
| Ordinary share capital |
21.1 |
6,192.2 |
6,187.9 |
| Retained earnings |
|
697.2 |
|
86.2 |
|
|
|
|
|
| Non-current liabilities |
|
1,607.5 |
1,161.7 |
| Provision for environmental rehabilitation |
11 |
616.8 |
562.1 |
| Deferred tax liability |
18.2 |
958.0 |
560.7 |
| Post retirement employee benefits |
|
10.4 |
10.5 |
| Lease liabilities |
10.2 |
22.3 |
28.4 |
|
|
|
|
| Current liabilities |
|
953.5 |
718.7 |
| Trade and other payables |
16 |
917.4 |
700.5 |
| Current portion of lease liabilities |
10.2 |
6.9 |
11.3 |
| Current tax liability |
|
29.2 |
6.9 |
|
|
|
|
| Total Liabilities |
|
2,561.0 |
1,880.4 |
|
|
|
|
| TOTAL EQUITY AND LIABILITIES |
|
9,450.4 |
8,154.5 |
|
| The accompanying notes are an integral part of these consolidated financial statements. |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended June 30, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stated |
|
|
|
|
|
share |
|
Retained |
Total |
| Amounts in R million |
Note |
capital |
|
earnings |
equity |
|
|
|
|
|
|
Balance at June 30, 2021 |
|
6,157.9 |
|
(1,337.5) |
|
4,820.4 |
|
|
|
|
|
|
| Total comprehensive income |
|
|
|
|
|
| Profit for the year |
|
|
|
1,123.8 |
1,123.8 |
| Other comprehensive income |
|
|
|
(9.1) |
(9.1) |
| Total comprehensive income |
|
— |
|
1,114.7 |
1,114.7 |
|
|
|
|
|
|
| Transactions with the owners of the parent |
|
|
|
|
|
| Contributions and distributions |
|
|
|
|
|
| Dividend on ordinary shares |
21.2 |
|
|
(513.6) |
|
(513.6) |
|
| Treasury shares disposed of for the vesting of the equity-settled share-based payment |
21.1, 19.1 |
15.4 |
|
|
(15.4) |
— |
|
| Equity settled share-based payment |
19.1 |
|
|
18.4 |
18.4 |
| Total contributions and distributions |
|
15.4 |
|
(510.6) |
(495.2) |
Balance at June 30, 2022 |
|
6,173.3 |
|
(733.4) |
5,439.9 |
|
|
|
|
|
|
| Total comprehensive income |
|
|
|
|
|
| Profit for the year |
|
|
|
1,281.4 |
1,281.4 |
| Other comprehensive income |
|
|
|
17.9 |
|
17.9 |
|
| Total comprehensive income |
|
— |
|
1,299.3 |
1,299.3 |
|
|
|
|
|
|
| Transactions with the owners of the parent |
|
|
|
|
|
| Contributions and distributions |
|
|
|
|
|
| Treasury shares disposed of for the vesting of the equity-settled share-based payment |
21.1, 19.1 |
14.6 |
|
|
(14.6) |
|
— |
|
| Dividend on ordinary shares |
21.2 |
|
|
(515.3) |
|
(515.3) |
|
| Equity-settled share-based payment expense |
19.1 |
|
|
22.0 |
22.0 |
| Equity-settled share based payment income tax impact on equity |
|
|
|
27.7 |
27.7 |
| Equity-settled share based payment vesting impact on equity |
|
|
|
0.5 |
0.5 |
| Total contributions and distributions |
|
14.6 |
|
(479.7) |
|
(465.1) |
|
Balance at June 30, 2023 |
|
6,187.9 |
|
86.2 |
|
6,274.1 |
|
|
|
|
|
|
| Total comprehensive income |
|
|
|
|
|
| Profit for the year |
|
|
|
1,328.7 |
1,328.7 |
| Other comprehensive income |
|
|
|
11.7 |
|
11.7 |
|
| Total comprehensive income |
|
— |
|
1,340.4 |
1,340.4 |
|
|
|
|
|
|
| Transactions with the owners of the parent |
|
|
|
|
|
| Contributions and distributions |
|
|
|
|
|
| Treasury shares disposed of for the vesting of the equity-settled share-based payment |
21.1, 19.1 |
4.3 |
|
|
(4.3) |
|
— |
|
| Dividend on ordinary shares |
21.2 |
|
|
(731.7) |
|
(731.7) |
| Equity-settled share-based payment expense |
19.1 |
|
|
26.4 |
26.4 |
| Equity-settled share based payment income tax impact on equity |
|
|
|
(20.5) |
(20.5) |
| Equity-settled share based payment vesting impact on equity |
|
|
|
0.7 |
0.7 |
| Total contributions and distributions |
|
4.3 |
|
|
(729.4) |
|
(725.1) |
|
Balance at June 30, 2024 |
21.1 |
6,192.2 |
|
|
697.2 |
|
6,889.4 |
|
|
|
|
|
|
| The accompanying notes are an integral part of these consolidated financial statements. |
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended June 30, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
| Cash generated from operations |
14 |
1,738.3 |
1,708.7 |
1,585.6 |
| Finance income received |
|
154.6 |
188.6 |
111.1 |
| Dividends received |
|
29.3 |
78.3 |
71.5 |
| Finance expense paid |
|
(4.5) |
|
(5.2) |
|
(7.7) |
|
| Income tax paid |
|
(72.5) |
|
(314.8) |
|
(262.7) |
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| Net cash inflow from operating activities |
|
1,845.2 |
1,655.6 |
1,497.8 |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
| Acquisition of property, plant and equipment |
9, 15 |
(2,985.7) |
|
(1,145.2) |
|
(584.1) |
|
| Proceeds on disposal of property, plant and equipment |
|
0.3 |
|
0.9 |
|
12.2 |
|
| Investment in other funds |
12 |
(33.8) |
|
(28.4) |
(28.9) |
| Environmental rehabilitation payments to reduce decommissioning liabilities |
11 |
(23.4) |
|
(13.8) |
(25.4) |
| Net cash outflow from investing activities |
|
(3,042.6) |
(1,186.5) |
(626.2) |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends paid on ordinary share capital |
21.2 |
(731.7) |
|
(515.3) |
|
(513.3) |
|
|
|
|
|
|
| Repayment of lease liabilities |
10.2 |
(19.0) |
|
(16.9) |
|
(19.7) |
|
| Net cash outflow from financing activities |
|
(750.7) |
|
(532.2) |
|
(533.0) |
|
|
|
|
|
|
|
|
|
|
|
| NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
(1,948.1) |
(63.1) |
338.6 |
| Impact of fluctuations in exchange rate on cash held in foreign currencies |
|
(1.8) |
8.9 |
|
7.0 |
|
| Cash and cash equivalents at the beginning of the year |
|
2,471.4 |
2,525.6 |
2,180.0 |
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR |
13 |
521.5 |
2,471.4 |
2,525.6 |
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|
|
|
|
|
|
|
|
| The accompanying notes are an integral part of these consolidated financial statements. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended June 30, 2024
1 ABOUT THESE CONSOLIDATED FINANCIAL STATEMENTS
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Reporting entity
The DRDGOLD Group is primarily involved in the retreatment of surface gold. The consolidated financial statements comprise DRDGOLD Limited (“DRDGOLD” or the “Company”) and its subsidiaries who are all wholly owned subsidiaries and solely operate in South Africa (collectively the “Group” and individually “Group Companies”). The Company is domiciled in South Africa with a registration number of 1895/000926/06. The registered address of the Company is Constantia Office Park, Cnr 14th Avenue and Hendrik Potgieter Road, Cycad House, Building 17, Ground Floor, Weltevreden Park, 1709.
DRDGOLD is 50.1% held by Sibanye Gold Proprietary Limited, which in turn is a wholly owned subsidiary of Sibanye-Stillwater Limited (“Sibanye-Stillwater”)
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Basis of accounting
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS Accounting Standards”) and its interpretations issued by the International Accounting Standards Board (“IASB”), SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council (“FRSC”) as well as the requirements of the Companies Act of South Africa. The consolidated financial statements were approved by the board of directors of the Company (“Board”) for issuance on October 30, 2024.
The directors believe that the Group has adequate resources to continue as a going concern for the foreseeable future. The consolidated financial statements have been prepared on a going concern basis.
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Functional and presentation currency
The functional and presentation currency of DRDGOLD and its subsidiaries is South African Rand (“Rand”). The amounts in these consolidated financial statements are rounded to the nearest million unless stated otherwise. Significant exchange rates during the year are set out in the table below:
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Rand / US dollar |
2024 |
2023 |
2022 |
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Spot rate at year end |
18.19 |
18.83 |
16.27 |
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Average prevailing rate for the financial year |
18.70 |
17.76 |
15.21 |
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Basis of measurement
The consolidated financial statements are prepared on the historical cost basis, unless otherwise stated.
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Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
Transactions eliminated on consolidation
Intra-group balances, transactions and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
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2 USE OF ACCOUNTING ASSUMPTIONS, ESTIMATES AND JUDGEMENTS
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The preparation of the consolidated financial statements requires management to make accounting assumptions, estimates and judgements that affect the application of the Group's accounting policies and reported amounts of assets and liabilities, income and expenses.
Accounting assumptions, estimates and judgements are reviewed on an ongoing basis. Revisions to reported amounts are recognised in the period in which the revision is made and in any future periods affected. Actual results may differ from these estimates.
Information about assumptions and estimates in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are included in the notes:
NOTE 9 PROPERTY, PLANT AND EQUIPMENT
NOTE 11 PROVISION FOR ENVIRONMENTAL REHABILITATION
NOTE 18 INCOME TAX
NOTE 24 PAYMENTS MADE UNDER PROTEST
NOTE 25 OTHER INVESTMENTS
Information about significant judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are included in the notes:
NOTE 24 PAYMENTS MADE UNDER PROTEST
NOTE 25 OTHER INVESTMENTS
NOTE 26 CONTINGENCIES
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
3 NEW STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS
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New standards, amendments to standards and interpretations effective for the year ended 30 June 2024
During the financial year, the following new and revised accounting standards, amendments to standards and new interpretation were adopted by the Group:
Definition of Accounting Estimate (Amendments to IAS 8) (Effective 1 July 2023)
The amendments introduce a new definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty.
The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. The amendment did not have a significant impact on the Group.
Deferred Tax related to Assets and Liabilities Arising from a single transaction – Amendments to IAS 12 Income Taxes (Effective 1 July 2023)
IAS 12 Income taxes clarifies how companies should account for deferred tax on certain transactions – e.g. leases and decommissioning provisions. The amendments narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. As a result, companies will need to recognise a deferred tax asset and a deferred tax liability for temporary differences arising on initial recognition of a lease and a decommissioning provision.
The Group has determined the impact of adopting the standard on 1 July 2023 as follows:
Decommissioning provision
•A detailed assessment was performed by the Group to which resulted in an immaterial increase in the gross deferred tax assets and liabilities for the Group. Deferred tax was recognised on the decommissioning asset and liability which was previously not recognised under the initial recognition exemption. As the amendment did not result in a material impact, no adjustment was recognised in retained earnings and reserves as at 1 July 2023 and no restatements were made.
Disclosure of Accounting Policy (Amendments to IAS 1 and IFRS Practice Statement 2) (Effective 1 July 2023)
The Board has recently issued amendments to IAS 1 Presentation of Financial Statements and an update to IFRS Practice Statement 2 Making Materiality Judgements to help companies provide useful accounting policy disclosures.
The key amendments to IAS 1 include:
•requiring companies to disclose their material accounting policies rather than their significant accounting policies;
•clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and as such need not be disclosed; and
•clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material to a company’s financial statements.
The amendments are applied prospectively. The amendment did not have a material impact on the Group's disclosures.
New standards, amendments to standards and interpretations not yet effective
At the date of authorisation of these consolidated financial statements, the following relevant standards, amendments to standards and interpretations that may be applicable to the business of the Group were in issue but not yet effective and may therefore have an impact on future consolidated financial statements. These new standards, amendments to standards and interpretations will be adopted at their effective dates.
Classification of liabilities as current or non-current (Amendments to IAS 1 Presentation of Financial Statements) (Effective 1 July 2024)
To promote consistency in application and clarify the requirements on determining if a liability is current or non-current, the IASB has amended IAS 1 as follows:
Right to defer settlement must have substance
Under existing IAS 1 requirements, companies classify a liability as current when they do not have an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
As part of its amendments, the IASB has removed the requirement for a right to be unconditional and instead, now requires that a right to defer settlement must have substance and exist at the end of the reporting period.
Classification of debt may change
A company classifies a liability as non-current if it has a right to defer settlement for at least twelve months after the reporting period. The IASB has now clarified that a right to defer exists only if the company complies with conditions specified in the loan agreement at the end of the reporting period, even if the lender does not test compliance until a later date.
The amendment is not expected to have a significant impact on the Group.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
3 NEW STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS continued
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New standards, amendments to standards and interpretations not yet effective continued
Amendment – Non-current Liabilities with Covenants (Amendment to IAS 1) (Effective 1 July 2024)
Subsequent to the release of amendments to IAS 1 Classification of Liabilities as Current or Non-Current, the IASB amended IAS 1 further in October 2022.
If an entity’s right to defer is subject to the entity complying with specified conditions, such conditions affect whether that right exists at the end of the reporting period, if the entity is required to comply with the condition on or before the end of the reporting period and not if the entity is required to comply with the conditions after the reporting period.
The amendments also provide clarification on the meaning of ‘settlement’ for the purpose of classifying a liability as current or non-current.
The amendment is not expected to have a significant impact on the Group.
IFRS 18 Presentation and Disclosure in Financial Statements (Effective 1 July 2027)
IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1 Presentation of Financial Statements. IFRS 18, which was published by the IASB on 9 April 2024, sets out significant new requirements for how financial statements are presented with particular focus on:
•The statement of profit or loss, including requirements for mandatory sub-totals to be presented.
•Aggregation and disaggregation of information, including the introduction of overall principles for how information should be aggregated and disaggregated in financial statements.
•Disclosures related to management-defined performance measures ("MPMs"), which are measures of financial performance based on a total or sub-total required by IFRS with adjustments made (e.g. ‘adjusted profit or loss’). Entities will be required to disclose MPMs in the financial statements with disclosures, including reconciliations of MPMs to the nearest total or sub-total calculated in accordance with IFRS.
The impact on the financial statements is still being assessed.
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4 REVENUE
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ACCOUNTING POLICIES
Revenue comprises the sale of gold bullion and silver bullion (produced as a by-product).
Up to April 11, 2022 revenue is measured based on the consideration specified in a contract with the customer, which is based on the London Bullion Market fixing price on the date when the Group transfers control over the goods to the customer. The Group recognises revenue at a point in time when Rand Refinery Proprietary Limited (“Rand Refinery”), acting as an agent for the sale of all gold produced by the Group, delivers the Gold to the buyer and the sales price is fixed, as evidenced by the certificate of sale. It is at this point that the revenue can be measured reliably and the recovery of the consideration is probable. Rand Refinery is contractually obliged to make payment to the Group within two business days after the sale of the gold and silver and therefore no significant financing component exists.
Subsequent to April 11, 2022 revenue is measured based on the consideration specified in a contract with the customer, being South African bullion banks. The consideration is based on the gold price derived on the gold market on the day a contract is entered into with the bulion bank. The Group recognises revenue at a point in time when the Group transfers the gold bullion and silver bullion to the bullion bank and the sale price is fixed, as evidenced by deal confirmations.
It is at this point that the customer obtains control of the gold bullion and silver bullion, which is the settlement date specified in the contract. On the settlement date the revenue can be measured reliably and the recovery of the consideration is probable. The customer is contractually obliged to make payment to the Group on the same day that the Group settles the contract and therefore no significant financing component exists.
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Amounts in R million |
|
2024 |
2023 |
2022 |
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Gold revenue |
|
6,229.7 |
5,489.7 |
5,110.7 |
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Silver revenue |
|
10.0 |
6.6 |
7.8 |
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Total revenue |
|
6,239.7 |
5,496.3 |
5,118.5 |
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A disaggregation of revenue by operating segment is presented in note 23 OPERATING SEGMENTS.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
4 REVENUE continued
MARKET RISK
Commodity price sensitivity
The Group's profitability and the cash flows are significantly affected by changes in the market price of gold which is sold in US Dollars. The Group did not enter into any hedging arrangements during the year.
A change of 20% in the average US Dollar gold price received during the financial year would have increased/(decreased) equity and profit/(loss) by the amounts shown below. This analysis assumes that all other variables remain constant and specifically excludes the impact on income tax.
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Amounts in R million |
|
2024 |
2023 |
2022 |
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|
|
|
|
|
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|
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|
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20% increase in the US Dollar gold price |
|
1,247.9 |
1,099.3 |
1,023.7 |
|
20% decrease in the US Dollar gold price |
|
(1,247.9) |
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(1,099.3) |
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(1,023.7) |
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Exchange rate sensitivity
The Group's profitability and the cash flows are significantly affected by changes in the rand to the US Dollar exchange rate. The Group did not enter into any hedging arrangements during the year.
A change of 20% in the average rand to US Dollar exchange rate received during the financial year would have increased/(decreased) equity and profit/(loss) by the amounts shown below. This analysis assumes that all other variables remain constant and specifically excludes the impact on income tax.
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Amounts in R million |
|
2024 |
2023 |
2022 |
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20% increase in the US Dollar exchange rate |
|
1,247.9 |
1,099.3 |
1,023.7 |
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20% decrease in the US Dollar exchange rate |
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(1,247.9) |
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(1,099.3) |
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(1,023.7) |
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5 RESULTS FROM OPERATING ACTIVITIES
5.1 COST OF SALES
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Amounts in R million |
Note |
2024 |
2023 |
2022 |
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Cost of sales |
|
(4,429.9) |
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(3,911.0) |
|
(3,741.5) |
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Operating costs (a) |
|
(4,206.0) |
|
(3,711.4) |
|
(3,506.5) |
|
|
Movement in gold in process and finished inventories - Gold Bullion |
|
34.9 |
|
10.8 |
|
30.4 |
|
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Depreciation |
9 |
(270.4) |
|
(217.5) |
(267.6) |
|
Change in estimate of environmental rehabilitation |
11 |
11.6 |
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7.1 |
|
2.2 |
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(a) The most significant components of operating costs include: |
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Consumable stores |
|
(1,303.3) |
|
(1,199.9) |
|
(1,014.9) |
|
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Labour including short term incentives |
|
(734.9) |
|
(663.4) |
|
(649.6) |
|
|
Electricity |
|
(586.1) |
|
(544.4) |
|
(547.3) |
|
|
Specialist service providers |
|
(851.7) |
|
(633.9) |
|
(610.2) |
|
|
Machine hire |
|
(198.4) |
|
(152.3) |
|
(139.0) |
|
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Security expenses |
|
(167.2) |
|
(153.6) |
|
(133.0) |
|
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Water |
|
(32.5) |
|
(61.8) |
|
(54.2) |
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RELATED PARTY TRANSACTIONS
Far West Gold Recoveries Proprietary Limited (“FWGR”) entered into an agreement with Sibanye-Stillwater effective 31 July 2018 for the pumping and supply of water and electricity to the FWGR operations for which FWGR is invoiced based on metered usage of water and electricity.
FWGR also entered into a smelting agreement with Sibanye-Stillwater effective 31 July 2018 to smelt and recover gold from gold loaded carbon produced at FWGR, and deliver the gold to Rand Refinery. As consideration for this service, Sibanye-Stillwater receives a fee based on the smelting costs plus 10% of the smelting costs.
Rand Refinery up to 10 April 2022, performed the final refinement and marketing of all gold and silver produced by the Group. As consideration for this service, Rand Refinery receives a variable refining fee plus fixed marketing and administration fees. From 11 April 2022, Rand Refinery only performs the final refinement and administration of the gold bars delivered. As a result of this, the marketing fee was no longer incurred by the Group. Rand Refinery is a related party to the Group through Sibanye-Stillwater’s shareholding in Rand Refinery.
All transactions and outstanding balances with related parties are to be settled in cash within 30 days of the invoice date. None of the balances are secured. No expense has been recognised in the current year as a credit loss allowance in respect of amounts charged to related parties.
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
5 RESULTS FROM OPERATING ACTIVITIES continued
5.1 COST OF SALES continued
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Amounts in R million |
|
2024 |
2023 |
2022 |
|
|
|
|
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|
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Services rendered by related parties and included in operating costs: |
|
|
|
|
|
Supply of water and electricity 1 |
|
114.5 |
79.2 |
79.2 |
|
Gold smelting and related charges 1 |
|
22.5 |
21.1 |
19.1 |
|
Other charges 1 |
|
0.3 |
0.3 |
0.3 |
|
Gold refining and related charges 2 |
|
7.6 |
7.2 |
6.9 |
|
|
|
144.9 |
107.8 |
105.5 |
|
1 Paid to Sibanye-Stillwater by FWGR |
|
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2 Paid to Rand Refinery by Ergo |
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5.2 OTHER INCOME
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ACCOUNTING POLICIES
Other income is recognised where it is probable that the economic benefits associated with a transaction will flow to the Group and it can be reliably measured.
Other income is generally income earned from transactions outside the course of the Group’s ordinary activities and may include COVID-19 and other insurance payouts, gains on disposal of property, plant and equipment and gains on financial instruments at fair value through profit or loss.
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Amounts in R million |
|
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
Gain on disposal of property, plant and equipment |
|
0.6 |
10.3 |
6.6 |
|
Insurance claim refund(a) |
|
1.2 |
— |
84.7 |
|
Sundry income |
|
0.2 |
0.1 |
— |
|
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|
2.0 |
10.4 |
91.3 |
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(a) Insurance claim |
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During the FY2020, a complex insurance claim process was initiated for business interruption caused by the regulatory lockdowns pursuant to the COVID-19 pandemic. R84.7 million was included in other income in profit or loss in FY2022. R53.0 million was received before 30 June 2022 and the balance of R31.7 million was received in FY2023. |
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5.3 ADMINISTRATION EXPENSES AND OTHER COSTS
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Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
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|
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Included in administration expenses and other costs are the following: |
|
|
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|
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Share based payment expense |
19.1 |
(26.4) |
|
(22.0) |
(18.4) |
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Exploration expenses and transaction costs1 |
|
(6.8) |
|
(4.6) |
|
(15.2) |
|
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Other costs and administration expenses2 |
|
(108.6) |
|
(88.8) |
|
(81.0) |
|
|
1 FY2022 includes exploration expenses of R8.2 million paid to Sibanye-Stillwater. |
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|
|
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|
2 Other costs and administration expenses are mostly made up of short-term incentives, corporate salaries, discretionary bonuses and information technology costs. (2023 and 2022 was adjusted to include corporate salaries) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
6 FINANCE INCOME
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|
ACCOUNTING POLICY
Finance income includes interest received, growth in cash and cash equivalents in environmental rehabilitation trust funds, growth in investment in Guardrisk, growth in the reimbursive right for environmental rehabilitation guarantees, dividends received, the unwinding of the payments made under protest and foreign exchange gains.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
Interest earned on cash and cash equivalents |
13 |
148.5 |
190.2 |
111.8 |
|
Growth in cash and cash equivalents in environmental rehabilitation trust funds |
|
— |
— |
14.8 |
|
Growth in reimbursive right for environmental rehabilitation guarantees |
|
— |
— |
1.8 |
|
Growth in investment in Guardrisk |
12 |
84.5 |
50.5 |
13.1 |
|
Dividends received |
25 |
29.3 |
78.3 |
71.5 |
|
Unwinding of payments made under protest |
24 |
7.2 |
5.7 |
5.8 |
|
Realised/unrealised foreign exchange gain |
|
10.4 |
9.0 |
7.0 |
|
Other finance income |
|
0.9 |
0.6 |
— |
|
|
|
280.8 |
334.3 |
225.8 |
7 FINANCE EXPENSE
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|
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|
|
ACCOUNTING POLICY
Finance expenses comprise interest payable on financial instruments measured at amortised cost calculated using the effective interest method, unwinding of the provision for environmental rehabilitation, interest on lease liabilities, the discount recognised on payments made under protest and foreign exchange losses.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
Interest on financial liabilities measured at amortised cost |
|
(1.5) |
|
(1.4) |
|
(2.6) |
|
|
Unwinding of provision for environmental rehabilitation |
11 |
(56.3) |
|
(46.2) |
|
(45.0) |
|
|
Discount recognised on payments made under protest |
24 |
(14.0) |
|
(19.0) |
|
(21.1) |
|
|
Interest on lease liabilities |
10.2 |
(3.0) |
|
(3.8) |
|
(4.2) |
|
|
Realised foreign exchange loss |
|
(1.6) |
— |
|
— |
|
|
Other finance expenses |
|
— |
|
(0.3) |
|
(1.9) |
|
|
|
|
(76.4) |
|
(70.7) |
|
(74.8) |
|
|
|
|
|
|
|
8 EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
The calculations of basic and diluted earnings per ordinary share are based on the following: |
|
|
|
|
|
Profit for the year |
|
1,328.7 |
1,281.4 |
1,123.8 |
|
|
|
|
|
|
|
Reconciliation of weighted average number of ordinary shares to diluted weighted average number of ordinary shares |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
Weighted average number of ordinary shares in issue adjusted for treasury shares |
|
861,240,788 |
859,538,847 |
856,760,797 |
|
|
|
|
|
|
|
Effect of equity-settled share-based payment |
|
4,306,645 |
5,423,357 |
4,203,336 |
|
|
|
|
|
|
|
Dilutive weighted average issued shares |
|
865,547,433 |
864,962,204 |
860,964,133 |
|
|
|
|
|
|
|
SA cents per share |
|
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
Basic EPS |
|
154.3 |
149.1 |
131.2 |
|
Diluted EPS |
|
153.5 |
148.2 |
130.6 |
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
9 PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
SIGNIFICANT ACCOUNTING ASSUMPTIONS AND ESTIMATES
Mineral resources and mineral reserves estimates
The Group is required to determine and report mineral resources and mineral reserves in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (“SAMREC Code”) 2016 edition. In order to calculate mineral resources and mineral reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. Estimating the quantity and/or grade of mineral resources and mineral reserves requires the size, shape and depth of reclamation sites to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgements and calculations to interpret the data. Because the assumptions used to estimate mineral resources and mineral reserves change from period to period and because additional geological data is generated during the course of operations, estimates of mineral resources and mineral reserves may change from period to period. Mineral resources and mineral reserves estimates prepared by management are reviewed by independent mineral resources and mineral reserves experts.
Changes in reported mineral resources and mineral reserves may affect the Group’s life-of-mine plan, financial results and financial position in a number of ways including the following:
•asset carrying values may be affected due to changes in estimated future cash flows;
•depreciation charged to profit or loss may change where such charges are determined by the units-of-production method, or where the useful lives of assets change;
•decommissioning, site restoration and environmental provisions may change where changes in estimated mineral resources and mineral reserves affect expectations about the timing or cost of these activities; and
•the carrying value of deferred tax assets and liabilities may change due to changes in estimates of the likely recovery of the tax benefits and charges.
Depreciation
The calculation of the units-of-production rate of depreciation could be affected if actual production in the future varies significantly from current forecast production. This would generally arise when there are significant changes in any of the factors or assumptions used in estimating mineral resources and mineral reserves. These factors could include:
•changes in mineral resources and mineral reserves;
•the grade of mineral resources and mineral reserves may vary from time to time;
•differences between actual commodity prices and commodity price assumptions;
•unforeseen operational issues at mine sites including planned extraction efficiencies; and
•changes in capital, operating, mining processing and reclamation costs, discount rates and foreign exchange rates.
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
9 PROPERTY, PLANT AND EQUIPMENT continued
|
|
|
|
ACCOUNTING POLICIES
Recognition and measurement
Property, plant and equipment comprise mine plant facilities and equipment, mine property and development (including mineral rights) and exploration assets. These assets (excluding exploration assets) are initially measured at cost, whereafter they are measured at cost less accumulated depreciation and accumulated impairment losses. Exploration assets are initially measured at cost, whereafter they are measured at cost less accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition or construction of the asset, borrowing costs capitalised, as well as the costs of dismantling and removing an asset and restoring the site on which it is located. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Exploration and evaluation costs are capitalised as exploration assets on a project-by-project basis, pending determination of the technical feasibility and commercial viability of the project.
Exploration assets consists of costs of acquiring rights, activities associated with converting a mineral resource to a mineral reserve - the process thereof includes drilling, sampling and other processes necessary to evaluate the technical feasibility and commercial viability of a mineral resource to prove whether a mineral reserve exists. Exploration assets also include geological, geochemical and geophysical studies associated with prospective projects and tangible assets which comprise property, plant and equipment used for exploratory activities. Costs are capitalised to the extent that they are a directly attributable exploration expenditure and classified as a separate class of assets on a project by project basis. Once a mineral reserve is determined or the project ready for development, the asset attributable to the mineral reserve or project is assessed for impairment and then reclassified to the appropriate class of assets. Depreciation commences when the assets are available for use. Exploration and evaluation expenses prior to acquiring rights to explore is recognised in profit or loss.
Depreciation
Depreciation of mine plant facilities and equipment, as well as mining property and development (including mineral rights) are calculated using the units of production method which is based on the life-of-mine of each site. The life-of-mine is primarily based on proved and probable mineral reserves. It reflects the estimated quantities of economically recoverable gold that can be recovered from reclamation sites based on the estimated gold price. Changes in the life-of-mine will impact depreciation on a prospective basis. The life-of-mine is prepared using a methodology that takes account of current information to assess the economically recoverable gold from specific reclamation sites and includes the consideration of historical experience.
The depreciation method, estimated useful lives and residual values are reassessed annually and adjusted if appropriate. The current estimated useful lives are based on the life-of-mine of each site, currently between one year (2023: one year; 2022: two years) and 18 years (2023: 19 years; 2022: 19 years) for mining assets of Ergo Mining Proprietary Limited (“Ergo”) and between one year (2023: two years; 2022: two years) and 17 years (2023: 18 years; 2022: 20 years) for FWGR mining assets.
|
|
|
|
|
Impairment
The carrying amounts of property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If any such indication exists, the asset’s recoverable amount is estimated. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (“CGUs”). The key assets of a surface retreatment operation which constitutes a CGU are a reclamation site, a metallurgical plant and a tailings storage facility. These key assets operate interdependently to produce gold. The Ergo and FWGR operations each have separately managed and monitored reclamation sites, metallurgical plants and tailings storage facilities and are therefore separate CGUs. The Ergo solar power plant with integrated BESS which is currently under construction has been evaluated to form part of the Ergo CGU as there is currently no active market for its cash flows which can be generated independently.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. The estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised in profit or loss if the carrying amount of an asset or CGU exceeds its recoverable amount.
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
9 PROPERTY, PLANT AND EQUIPMENT continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
Mine plant facilities and equipment |
Mine property and development |
Exploration assets |
Capital work in progress |
Total |
|
|
|
|
|
|
|
|
|
30 June 2024 |
|
|
|
|
|
|
|
Cost |
|
3,106.6 |
2,944.0 |
19.2 |
3,219.6 |
9,289.4 |
|
Balance at the beginning of the year |
|
2,901.6 |
2,788.6 |
16.2 |
498.0 |
6,204.4 |
|
Additions - property, plant and equipment owned1 |
|
193.1 |
196.2 |
3.0 |
2,721.6 |
3,113.9 |
|
Additions - right-of-use assets |
10.1 |
— |
4.5 |
— |
— |
4.5 |
|
Lease modifications |
10.1 |
— |
4.4 |
— |
— |
4.4 |
|
Lease derecognitions |
10.1 |
(1.3) |
|
(3.2) |
— |
— |
|
(4.5) |
|
|
Disposals and scrapping |
|
(9.6) |
|
(58.4) |
|
— |
|
— |
|
(68.0) |
|
|
Change in estimate of decommissioning asset |
11 |
22.8 |
|
11.9 |
|
— |
— |
|
34.7 |
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
(1,206.6) |
|
(1,278.2) |
|
(9.7) |
|
— |
|
(2,494.5) |
|
|
Balance at the beginning of the year |
|
(1,108.7) |
|
(1,176.5) |
|
(9.7) |
|
— |
|
(2,294.9) |
|
|
Depreciation |
5.1 |
(110.3) |
|
(160.1) |
|
— |
— |
(270.4) |
|
|
Lease derecognitions |
|
4.0 |
— |
— |
— |
4.0 |
|
Disposals and scrapping |
|
8.4 |
58.4 |
— |
— |
66.8 |
|
|
|
|
|
|
|
|
|
Carrying value at end of the year |
|
1,900.0 |
1,665.8 |
9.5 |
3,219.6 |
6,794.9 |
|
|
|
|
|
|
|
|
|
Comprising: |
|
|
|
|
|
|
|
Property, plant and equipment owned |
|
1,894.1 |
1,646.0 |
9.5 |
3,219.6 |
6,769.2 |
|
Right-of-use assets |
10.1 |
5.9 |
19.8 |
— |
— |
25.7 |
|
|
|
|
|
|
|
|
|
Carrying value at end of the year |
|
1,900.0 |
1,665.8 |
9.5 |
3,219.6 |
6,794.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2023 |
|
|
|
|
|
|
|
Cost |
|
2,901.6 |
2,788.6 |
16.2 |
498.0 |
6,204.4 |
|
Balance at the beginning of the year |
|
2,733.9 |
2,419.6 |
14.2 |
— |
5,167.7 |
|
Additions - property, plant and equipment owned |
|
157.5 |
365.1 |
2.0 |
498.0 |
1,022.6 |
|
Additions - right-of-use assets |
10.1 |
— |
6.1 |
— |
— |
6.1 |
|
Lease modifications |
10.1 |
(0.6) |
— |
— |
— |
(0.6) |
|
Lease derecognitions |
10.1 |
(4.2) |
|
(0.8) |
— |
— |
|
(5.0) |
|
|
Disposals and scrapping |
|
(6.6) |
|
(0.2) |
|
— |
— |
|
(6.8) |
|
|
Change in estimate of decommissioning asset |
11 |
21.6 |
(1.2) |
— |
|
— |
20.4 |
|
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
(1,108.7) |
|
(1,176.5) |
|
(9.7) |
|
— |
|
(2,294.9) |
|
|
Balance at the beginning of the year |
|
(1,017.0) |
|
(1,056.9) |
|
(9.7) |
|
— |
|
(2,083.6) |
|
|
Depreciation |
5.1 |
(97.9) |
|
(119.6) |
|
— |
— |
|
(217.5) |
|
|
Lease derecognitions |
|
4.0 |
— |
— |
— |
4.0 |
|
Disposals and scrapping |
|
2.2 |
— |
— |
— |
2.2 |
|
|
|
|
|
|
|
|
|
Carrying value at end of the year |
|
1,792.9 |
1,612.1 |
6.5 |
498.0 |
3,909.5 |
|
|
|
|
|
|
|
|
|
Comprising: |
|
|
|
|
|
|
|
Property, plant and equipment owned |
|
1,783.2 |
1,587.0 |
6.5 |
498.0 |
3,874.7 |
|
Right-of-use assets |
10.1 |
9.7 |
25.1 |
— |
— |
34.8 |
|
|
|
|
|
|
|
|
|
Carrying value at end of the year |
|
1,792.9 |
1,612.1 |
6.5 |
498.0 |
3,909.5 |
|
1 Capital work in progress mainly relates to the Ergo solar power plant and integrated BESS of R2,606.6 million (2023: R498.0 million) and the FWGR RTSF construction of R603.8 million (2023: Rnil) |
|
2 This amount includes cash additions of R2,862.2 million (2023: R959.7 million) |
CONTRACTUAL COMMITMENTS
Contractual commitments not provided for in the consolidated financial statements at June 30, 2024 amounted to R2,136.8 million (2023: R1,730.8 million).
Capital expenditure related to material growth projects are financed on a project-by-project basis which may include bank facilities and existing cash resources. Sustaining capital expenditure is financed from cash generated from operations and existing cash resources cash resources.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
10 RIGHT OF USE ASSETS AND LEASE LIABILITIES
|
|
|
|
|
|
|
ACCOUNTING JUDGEMENTS
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains a lease, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The contract must also be enforceable. To assess whether a contract conveys the right to control the use of an identified asset, requires judgement particularly on contracts with service contractors, which may contain embedded leases.
The Group assesses whether:
•the contract involves the use of an identified asset;
•the Group has the right to obtain substantially all the economic benefits from use of the asset throughout the period of use; and
•the Group has the right to direct the use of the asset.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relevant stand-alone prices. However, for the lease of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease component as a single lease component.
Some property leases contain options to renew under the contract. Judgement is applied in whether the renewable option periods must be included in the lease term i.e. it is reasonably certain that the option to renew will be exercised. In applying judgement, the Group also considers whether the lease term is commensurate with estimated future mine plan requirements and environmental rehabilitation obligations associated with the property post reclamation.
|
|
|
|
|
|
|
|
ACCOUNTING POLICIES
Right of use assets
The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability and is adjusted by any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The Group recognises a right of use asset and lease liability at the lease commencement date.
The right of use asset is subsequently depreciated using the straightline method from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term. The right of use asset carrying value is allocated to the CGU it belongs to and the CGU is reviewed at each reporting date to determine whether there is any indication of impairment. The carrying value is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
Lease liability
The lease liability is initially measured at the present value of the outstanding lease payments at commencement date over the lease term, discounted using the interest rate implicit in the lease or if that rate is undeterminable, the Group’s incremental borrowing rate. The lease term includes the non-cancellable period for which the lessee has the right to use an underlying asset including optional periods when the Group is reasonably certain to exercise an option to extend a lease.
Lease payments comprise fixed payments, variable lease payments that depend on an index or rate, initially measured using the index or rate as at the commencement date, and the exercise price under a purchase option that the Group is reasonably certain to exercise.
The lease liability is measured using the effective interest rate method. The Group re-measures the lease liability when the lease contract is modified and this does not give rise to modification accounting, when the lease term has been changed or when the lease payments have changed as a result of a change in an index or rate or a change in the assessment of a purchase option. Upon remeasurement, a corresponding adjustment is made to the carrying amount of the right of use asset or is recorded in profit or loss if the carrying amount of the right of use asset has been reduced to zero.
Right of use assets are presented in “property, plant and equipment” and lease liabilities are separately disclosed in the statement of financial position.
Short term leases and leases of low value assets
The Group has elected not to recognise right of use assets and lease liabilities for short-term leases of machinery and equipment that have a lease term of 12 months or less and leases of low value assets which include IT equipment, security equipment and administration equipment.
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
10 RIGHT OF USE ASSETS AND LEASE LIABILITIES continued
10.1 RIGHT OF USE ASSETS
Included in property, plant and equipment are the following leased assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
Mine plant facilities and equipment |
Mine property and development |
Total |
|
|
|
|
|
|
|
|
|
30 June 2024 |
|
|
|
|
|
|
Cost |
|
25.1 |
69.4 |
94.5 |
|
|
Balance at the beginning of the year |
|
26.4 |
63.7 |
90.1 |
|
|
Additions |
|
— |
4.5 |
4.5 |
|
|
Lease modifications |
|
— |
4.4 |
4.4 |
|
|
Lease derecognitions |
|
(1.3) |
|
(3.2) |
(4.5) |
|
|
|
Accumulated depreciation and impairment |
|
(19.2) |
|
(49.6) |
|
(68.8) |
|
|
|
Opening balance |
|
(16.7) |
|
(38.6) |
|
(55.3) |
|
|
|
Depreciation |
|
(6.5) |
|
(11.0) |
|
(17.5) |
|
|
|
Lease derecognitions |
|
4.0 |
— |
4.0 |
|
|
|
|
|
|
|
|
|
Carrying value at the end of the year |
|
5.9 |
19.8 |
25.7 |
|
|
|
|
|
|
|
|
|
30 June 2023 |
|
|
|
|
|
|
Cost |
|
26.4 |
63.7 |
90.1 |
|
|
Balance at the beginning of the year |
|
31.2 |
58.4 |
89.6 |
|
|
Additions |
|
— |
6.1 |
6.1 |
|
|
Lease modifications |
|
(0.6) |
— |
(0.6) |
|
|
Lease derecognitions |
|
(4.2) |
|
(0.8) |
(5.0) |
|
|
|
Accumulated depreciation and impairment |
|
(16.7) |
|
(38.6) |
|
(55.3) |
|
|
|
Opening balance |
|
(13.0) |
|
(28.9) |
|
(41.9) |
|
|
|
Depreciation |
|
(7.7) |
|
(9.7) |
|
(17.4) |
|
|
|
Lease derecognitions |
|
4.0 |
— |
4.0 |
|
|
|
|
|
|
|
|
|
Carrying value at the end of the year |
|
9.7 |
25.1 |
34.8 |
|
|
|
|
|
|
|
|
10.2 LEASE LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
2024 |
2023 |
|
|
|
|
|
|
Reconciliation of the lease liabilities balance: |
|
|
|
|
Balance at the beginning of the year |
|
39.7 |
52.3 |
|
New leases |
10.1 |
4.5 |
6.1 |
|
Lease modifications |
10.1 |
4.4 |
(0.6) |
|
Lease derecognitions |
10.1 |
(0.4) |
(1.2) |
|
Interest charge on lease liabilities |
7 |
3.0 |
3.8 |
|
Repayment of lease liabilities |
|
(19.0) |
|
(16.9) |
|
|
Interest repaid |
|
(3.0) |
|
(3.8) |
|
|
|
|
|
|
|
Balance at the end of the year |
|
29.2 |
39.7 |
|
|
|
|
|
|
Current portion of lease liabilities |
|
(6.9) |
|
(11.3) |
|
|
|
|
|
|
|
Non-current portion of lease liabilities |
|
22.3 |
28.4 |
|
|
|
|
|
|
Maturity analysis of undiscounted contractual cash flows: |
|
|
|
|
Less than a year |
|
9.5 |
16.7 |
|
One to five years |
|
21.3 |
24.8 |
|
More than five years |
|
7.3 |
8.5 |
|
|
|
|
|
|
Total undiscounted lease liabilities at the end of the year |
|
38.1 |
50.0 |
|
|
|
|
|
|
Lease payments not recognised as a liability but expensed during the year: |
|
|
|
|
Short-term leases |
|
(2.2) |
|
(6.4) |
|
|
Leases of low value assets |
|
(8.9) |
|
(9.7) |
|
|
|
|
|
|
|
Cash flows included in cash generated from operating activities |
|
(11.1) |
|
(16.1) |
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
11 PROVISION FOR ENVIRONMENTAL REHABILITATION
|
|
|
|
|
|
|
SIGNIFICANT ACCOUNTING ASSUMPTIONS AND ESTIMATES
Estimates of future environmental rehabilitation costs are determined with the assistance of an independent expert and are based on the Group’s environmental management plans which are developed in accordance with regulatory requirements as well as the life-of-mine plan (as discussed in note 9 to the consolidated financial statements) which influences the estimated timing of the rehabilitation cash outflows and the planned method of rehabilitation which in turn is influenced by developments in trends and technology.
An average discount rate ranging between 10.1% and 10.6% (2023: between 10.8% and 11.1%), average inflation rate of 5.6% (2023: 5.7%) and the discount periods as per the expected life-of-mine were used in the calculation of the estimated net present value of the rehabilitation liability.
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ACCOUNTING POLICIES
The net present value of the estimated rehabilitation cost as at reporting date is provided for in full. These estimates are reviewed annually and are discounted using a pre-tax risk-free rate that is adjusted to reflect the current market assessments of the time value of money and the risks specific to the obligation.
Annual changes in the provision consist of financing expenses relating to the change in the present value of the provision and inflationary increases in the provision, as well as changes in estimates.
The present value of dismantling and removing the asset created (decommissioning liabilities) are capitalised to PPE against an increase in the rehabilitation provision. If a decrease in the liability exceeds the carrying amount of the asset, the excess is recognised in profit or loss. If the asset value is increased and there is an indication that the revised carrying value is not recoverable, an impairment test is performed in accordance with the accounting policy dealing with impairments of property, plant and equipment. Over time, the liability is increased to reflect an interest element, and the capitalised cost is depreciated over the life of the related asset. Cash costs incurred to rehabilitate these disturbances are charged to the provision and are presented as investing activities in the statement of cash flows.
The present value of environmental rehabilitation costs relating to the production of inventories and sites without related assets (restoration liabilities) as well as changes therein are expensed as incurred and presented as operating costs. Cash costs incurred to rehabilitate these disturbances are presented as operating activities in the statement of cash flows. The cost of ongoing rehabilitation is recognised in profit or loss as incurred.
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Amounts in R million |
Note |
2024 |
2023 |
|
|
|
|
|
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Balance at the beginning of the year |
|
562.1 |
517.7 |
|
Unwinding of provision |
7 |
56.3 |
46.2 |
|
Change in estimate of environmental rehabilitation recognised in profit or loss (a) |
5.1 |
(11.6) |
|
(7.1) |
|
|
Change in estimate of environmental rehabilitation recognised to decommissioning asset (b) |
9 |
34.7 |
|
20.4 |
|
Environmental rehabilitation payments (c) |
|
(24.7) |
|
(15.1) |
|
|
To reduce decommissioning liabilities |
|
(23.4) |
|
(13.8) |
|
|
To reduce restoration liabilities |
14 |
(1.3) |
|
(1.3) |
|
|
|
|
|
|
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Balance at the end of the year |
|
616.8 |
562.1 |
|
|
|
|
|
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Environmental rehabilitation payments to reduce the liability |
|
(24.7) |
|
(15.1) |
|
|
Ongoing rehabilitation expenditure1 |
|
(16.1) |
|
(26.8) |
|
|
|
|
|
|
|
Total cash spent on environmental rehabilitation |
|
(40.8) |
|
(41.9) |
|
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1 The Group also performs ongoing environmental rehabilitation arising from its current activities concurrently with production. These costs do not represent a reduction of the above liability and are expensed as operating costs. |
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(a)Change in estimate of environmental rehabilitation recognised in profit or loss
Decreases in provision for environmental rehabilitation mainly as result of updated survey results on remaining historical spills at Ergo.
(b)Change in estimate of environmental rehabilitation recognised to decommissioning asset
Increases mainly as a result of double digit inflationary increases on vegetation rates driven by higher machine hire rates and cost of lime.
(c)Environmental rehabilitation payments
25ha of the Brakpan/Withok Tailings Storage Facility ("TSF") and 15.1ha of the Driefontein 4 TSF were vegetated during the year.
GROSS COST TO REHABILITATE
The Group estimates that, based on current environmental and regulatory requirements, the total undiscounted rehabilitation cost is approximately R972.0 million (2023: R897.8 million).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
12 INVESTMENTS IN REHABILITATION AND OTHER FUNDS
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ACCOUNTING POLICIES
Investments in Guardrisk Cell Captive
Funds invested in the Guardrisk Cell Captive, held within Guardrisk Insurance Company Limited (“GICL”) or “Guardrisk” are non-derivative financial assets categorised as financial assets measured at fair value through profit and loss as the funds are invested by Guardrisk in liquid money market funds. These assets are initially measured at fair value and subsequent changes in fair value are recognised in profit or loss as they arise and included in finance income. The investments in GICL are for the sole use of environmental financial guarantees, Directors’ and Officers’ insurance and other insurance requirements.
The investment in the Guardrisk Cell Captive are for the sole use as determined in the insurance policies and are therefore included in non-current assets.
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Investment in Guardrisk Cell Captive – Funding of environmental rehabilitation activities (refer note 11)
A ring-fenced policy, issued by GICL who issued rehabilitation financial guarantees, replaced the old environmental rehabilitation policy which lapsed in FY2022. The funds are ring-fenced for the sole objective of future rehabilitation during and at the end of the relevant life of mine.
Environmental rehabilitation payments to reduce the environmental rehabilitation obligations and ongoing rehabilitation expenditure are mostly funded by cash generated from operations.
GICL has guarantees in issue amounting to R951.8 million (2023: R951.8 million) to the DMRE on behalf of DRDGOLD related to the environmental obligations. The funds for environmental rehabilitation in the cell captive serve as collateral for these guarantees.
Investment in Guardrisk Cell Captive – Directors’ and Officers’ insurance
During the current year premiums were paid into the Guardrisk Cell Captive for the creation of self-insurance for the Group’s Directors and Officers. The policy came to an end on June 30, 2024. The funds remain within the cell captive for future insurance applications.
Investment in Guardrisk Cell Captive – Other funds
These are existing funds within the cell captive which were previously part of the old environmental rehabilitation policy held for purposes of obtaining environmental rehabilitation guarantees. The funds remain within the cell captive for future insurance applications.
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Amounts in R million |
Note |
2024 |
2023 |
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|
|
|
|
|
|
|
|
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|
|
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|
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|
|
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Investment in Guardrisk Cell Captive (a) |
|
912.5 |
789.7 |
|
Balance at the beginning of the year |
|
789.7 |
710.8 |
|
|
|
|
|
|
Contributions |
|
38.3 |
28.4 |
|
Growth |
6 |
84.5 |
50.5 |
|
Investments in rehabilitation and other funds |
|
912.5 |
789.7 |
|
|
|
|
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(a) Investment in Guardrisk Cell Captive |
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The investment in the cell captive is allocated as follows: |
|
912.5 |
789.7 |
|
Environmental rehabilitation |
|
697.5 |
630.6 |
|
Directors’ and Officers’ insurance |
|
108.5 |
61.3 |
|
Other funds |
|
106.5 |
97.8 |
|
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CREDIT RISK
The Group is exposed to credit risk on the total carrying value of the investments held in the environmental rehabilitation trust funds and the Guardrisk Cell Captive.
The Group manages its exposure to credit risk by mandating the Guardrisk Cell Captive to diversify the funds across a number of funds in low-risk, interest-bearing cash and cash equivalents.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
12 INVESTMENTS IN REHABILITATION AND OTHER FUNDS continued
MARKET RISK
Interest rate risk
A change of 100 basis points (bp) in interest rates at the reporting date would have increased/(decreased) equity and profit/(loss) by the amounts shown below. This analysis assumes that all other variables, in particular the balance of the funds, remain constant. The analysis excludes income tax.
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Amounts in R million |
|
2024 |
2023 |
|
|
|
|
|
|
100bp increase |
|
9.1 |
7.9 |
|
100bp (decrease) |
|
(9.1) |
(7.9) |
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|
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|
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FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of investment in Guardrisk Cell Captive approximate their carrying value due to the short-term maturities of the underlying funds invested by Guardrisk.
13 CASH AND CASH EQUIVALENTS
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ACCOUNTING POLICIES
Cash and cash equivalents are short-term, highly liquid investments that are readily convertible to cash without significant risk of changes in value and comprise cash on hand, demand deposits, and highly liquid investments which are readily convertible to known amounts of cash.
Cash and cash equivalents are non-derivative financial assets categorised as financial assets measured at amortised cost. Cash and cash equivalents are initially measured at fair value. Subsequent to initial recognition, cash and cash equivalents are measured at amortised cost, which is equivalent to their fair value.
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Amounts in R million |
Note |
2024 |
2023 |
|
|
|
|
|
|
Cash on hand |
|
116.8 |
131.3 |
|
Access deposits and income funds1 |
|
392.4 |
2,328.7 |
|
Restricted cash2 |
|
12.3 |
11.4 |
|
|
|
|
|
|
|
|
521.5 |
2,471.4 |
|
|
|
|
|
|
Interest earned on cash and cash equivalents |
6 |
148.5 |
190.2 |
|
1These consist of access deposit notes and conservatively managed income funds that are diversified across the major financial institutions in South Africa. |
|
At reporting date all of these instruments had same day or next day liquidity and effective annualised yields of between 8.90% and 9.40% |
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2This consists of cash held on call as collateral for guarantees issued by the Standard Bank of South Africa Limited on behalf of the Group for environmental rehabilitation amounting to R5.2 million and various utilities amounting to R5.1 million |
CREDIT RISK
The Group is exposed to credit risk on the total carrying value of its cash and cash equivalents. The Group manages its exposure to credit risk by investing cash and cash equivalents across several major financial institutions, considering the credit ratings of the respective financial institutions, funds and underlying instruments.
Impairment on cash and cash equivalents, if any, are measured on a 12-month expected loss basis and reflects the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties which are rated between AA- and AA+.
MARKET RISK
Interest rate risk
A change of 100 basis points (bp) in the interest rates would have increased/(decreased) equity and profit/(loss) by the amounts shown below. This analysis is performed on the average balance of cash and cash equivalents for the year and assumes that all other variables remain constant. The analysis excludes income tax.
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|
|
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|
|
|
|
|
|
|
|
Amounts in R million |
|
2024 |
2023 |
|
|
|
|
|
|
100bp increase |
|
15.0 |
25.0 |
|
100bp (decrease) |
|
(15.0) |
(25.0) |
|
|
|
|
|
|
|
|
|
|
Foreign denominated cash is held in a foreign currency bank account accruing negligible interest and is usually converted to South African rand on the day of receipt. Foreign cash is therefore not exposed to significant interest rate risk.
Foreign currency risk
US Dollars received on settlement of the trade receivables are exposed to fluctuations in the US Dollar/South African rand exchange rate until it is converted to South African rands.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
13 CASH AND CASH EQUIVALENTS continued
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US Dollars not converted to South African rands at reporting date are as follows: |
|
|
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|
|
|
|
|
|
Figures in USD million |
|
2024 |
2023 |
|
|
|
|
|
|
Foreign denominated cash at 30 June |
|
— |
3.7 |
|
|
|
|
|
|
A 10% strengthening of the rand against the US Dollar at 30 June 2024 would have increased/(decreased) equity and profit/(loss) by the amounts shown below. This analysis assumes that all other variables remain constant. |
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|
|
|
|
|
Amounts in R million |
|
2024 |
2023 |
|
|
|
|
|
|
Strengthening of the Rand against the US Dollar |
|
— |
(7.0) |
|
Weakening of the Rand against the US Dollar |
|
— |
7.0 |
|
|
|
|
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of cash and cash equivalents approximates their carrying value due to their short-term maturities.
14 CASH GENERATED FROM OPERATIONS
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|
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|
|
|
Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
Profit for the year |
|
1,328.7 |
1,281.4 |
1,123.8 |
|
Adjusted for: |
|
|
|
|
|
Income tax |
18.1 |
488.2 |
405.0 |
334.3 |
|
Depreciation |
9 |
270.4 |
217.5 |
267.6 |
|
|
|
|
|
|
|
Movement in gold in process and finished inventories - Gold Bullion |
5.1 |
(34.9) |
|
(10.8) |
|
(30.4) |
|
|
Change in estimate of environmental rehabilitation recognised in profit or loss |
11 |
(11.6) |
|
(7.1) |
|
(2.2) |
|
|
Environmental rehabilitation payments to reduce the restoration liabilities |
11 |
(1.3) |
(1.3) |
|
(3.3) |
|
|
Share based payment expense |
5.3 |
26.4 |
|
22.0 |
18.4 |
|
Gain on disposal of property, plant and equipment |
5.2 |
(0.6) |
|
(10.3) |
|
(6.6) |
|
|
Insurance claim (receivable)/received |
5.2 |
(1.2) |
31.7 |
(31.7) |
|
|
Finance income |
6 |
(280.8) |
|
(334.3) |
|
(225.8) |
|
|
Finance expense |
7 |
76.4 |
70.7 |
|
74.8 |
|
|
Other non-cash items |
|
2.4 |
|
— |
|
3.8 |
|
|
|
|
|
|
|
|
Operating cash flows before working capital changes |
|
1,862.1 |
1,664.5 |
1,522.7 |
|
|
|
|
|
|
|
Changes in: |
|
(123.8) |
44.2 |
62.9 |
|
|
Trade and other receivables |
|
(296.2) |
19.9 |
25.7 |
|
Inventories |
|
(12.9) |
|
(13.6) |
|
(18.9) |
|
|
Payment made under protest |
24 |
(12.8) |
|
(12.6) |
|
(15.2) |
|
|
Trade and other payables and employee benefits |
|
198.1 |
|
50.5 |
|
71.3 |
|
|
|
|
|
|
|
|
Cash generated by operations |
|
1,738.3 |
1,708.7 |
1,585.6 |
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
15 TRADE AND OTHER RECEIVABLES
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ACCOUNTING POLICIES
Recognition and measurement
Trade and other receivables, excluding Value Added Tax ("VAT")and prepayments, are non-derivative financial assets categorised as financial assets at amortised cost.
These assets are initially measured at fair value plus directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method less any expected credit losses using the Group’s business model for managing its financial assets.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Impairment
The Group recognises loss allowances for trade and other receivables at an amount equal to expected credit losses (“ECLs”). The Group uses the simplified ECL approach. When determining whether the credit risk of a financial asset has increased since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on informed credit assessments and including forward-looking information. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
ECLs are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). The Group assesses whether the financial asset is credit impaired at each reporting date. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred, including but not limited to financial difficulty or default of payment. The Group will write off a financial asset when there is no reasonable expectation of recovering it after considering whether all means to recovery the asset have been exhausted, or the counterparty has been liquidated and the Group has assessed that no recovery is possible.
Any impairment losses are recognised in the statement of profit or loss.
Trade receivables relate to gold sold to the bullion banks. Settlement is usually received on the gold sold date. Prior to April 11, 2022, trade receivables related to gold sold on the bullion market by Rand Refinery in its capacity as an agent for the Group. Settlement was usually received 2 working days from gold sold date.
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|
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|
|
|
Amounts in R million |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
|
|
|
Value Added Tax (including VAT on imported goods)1 |
|
273.3 |
56.6 |
|
Other receivables |
|
52.2 |
33.8 |
|
Prepayments2 |
|
159.1 |
199.1 |
|
Allowance for impairment |
|
(5.6) |
|
(0.9) |
|
|
|
|
479.0 |
288.6 |
|
|
|
|
|
|
|
|
|
|
|
1 Value Added Tax includes, monies paid over to clearing agent for the VAT on import of the BESS for payment to the South African Revenue Service ("SARS"). Subsequent to year end these monies were received from SARS. |
|
2 Prepayments includes prepayments made towards capital projects of R123.5 million mainly relating to the RTSF, solar power project and other asset acquisitions (2023: solar power project of R185.5 million) |
|
|
|
|
|
|
|
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|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
15 TRADE AND OTHER RECEIVABLES continued
CREDIT RISK
The Group is exposed to credit risk on the total carrying value of its trade receivables and other receivables excluding Value Added Tax and prepayments.
The Group manages its exposure to credit risk on trade receivables by selling gold on a cash on delivery basis. The Group manages its exposure to credit risk on other receivables by establishing a maximum payment period of 30 days, and ensuring that counterparties are of good credit standing and transacting on a secured or cash basis where considered necessary. The majority of other receivables, comprises balances with counterparties who have been transacting with the Group for over 5 years and in some of these cases, the counterparties are also suppliers of the Group. Receivables are regularly monitored and assessed for recoverability.
The balances of counterparties who have been assessed as being credit impaired at reporting date are as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
|
Amounts in R million |
Non-credit impaired |
Credit impaired |
Non-credit impaired |
Credit impaired |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivables |
46.6 |
5.6 |
32.9 |
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss allowance |
— |
(5.6) |
|
— |
(0.9) |
|
Movement in the allowance for impairment in respect of trade and other receivables during the year was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
2024 |
2023 |
|
|
|
|
|
Balance at the beginning of the year |
(0.9) |
|
(2.2) |
|
|
Credit loss allowance/impairments recognised included in operating costs |
(4.7) |
|
(2.0) |
|
|
Credit loss allowance/impairments reversed included in operating costs |
— |
0.6 |
|
Credit loss allowance written off against related receivable |
— |
2.7 |
|
Balance at the end of the year |
(5.6) |
|
(0.9) |
|
MARKET RISK
Interest rate risk
Trade and other receivables do not earn interest and are therefore not subject to interest rate risk.
Foreign currency risk
Gold is sold at spot rates and is denominated in US Dollars. Gold sales are therefore exposed to fluctuations in the US Dollar/South African Rand exchange rate. All foreign currency transactions entered into during the year ended June 30, 2024 were at spot rates and no foreign exchange rate hedges are entered into. The USD to be received from bullion sales are sold on the same date as the respective bullion sale to settle in ZAR to the Group. As a result, trade receivables are not exposed to fluctuations in the US Dollar/South African Rand exchange rate.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of trade and other receivables approximate their carrying value due to their short-term maturities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
16 TRADE AND OTHER PAYABLES
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|
|
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ACCOUNTING POLICIES
Trade and other payables, excluding Value Added Tax, payroll accruals, accrued leave pay and provision for performance-based incentives, are non-derivative financial liabilities categorised as financial liabilities measured at amortised cost.
These liabilities are initially measured at fair value plus directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method. The Group derecognises a financial liability when its contractual rights are discharged or cancelled or expire.
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
2024 |
2023 |
|
|
|
|
|
|
Trade payables and accruals1 |
|
720.6 |
525.1 |
|
Value Added Tax payable |
|
1.2 |
0.3 |
|
Provision for leave |
|
59.9 |
56.8 |
|
Accrual for short term performance based incentives |
|
99.0 |
89.8 |
|
Payroll creditors |
|
36.7 |
28.5 |
|
|
|
|
|
|
|
|
917.4 |
700.5 |
|
|
|
|
|
|
Interest relating to trade payables and accruals included in profit or loss |
|
(1.5) |
|
(1.1) |
|
|
|
|
|
|
|
RELATED PARTY BALANCES |
|
|
|
|
Trade payables and accruals include the following amounts payable to related parties: |
|
|
|
|
Sibanye-Stillwater |
|
35.1 |
16.5 |
|
Rand Refinery |
|
1.0 |
0.3 |
|
1 Included in trade payables and accruals is an amount of R96.2 million (2023: R76.7 million) related to capital projects. |
LIQUIDITY RISK
Trade payables and accruals are all expected to be settled within 12 months from reporting date.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of trade payables and accruals approximate their carrying value due to their short-term maturities.
17 INVENTORIES
|
|
|
|
|
|
|
ACCOUNTING POLICIES
Gold in process is stated at the lower of cost and net realisable value. Costs are assigned to gold in process on a weighted average cost basis. Costs comprise all costs incurred to the stage immediately prior to smelting, including costs of extraction and processing as they are reliably measurable at that point. Gold Bullion is stated at the lower of cost and net realisable value. Selling and general administration costs are excluded from inventory valuation.
Consumable stores are stated at cost less allowances for obsolescence. Cost of consumable stores and stockpile material is based on the weighted average cost principle and includes expenditure incurred in acquiring inventories and bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses.
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Amounts in R million |
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2024 |
2023 |
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Consumable stores |
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250.7 |
232.7 |
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Ore stockpiles |
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23.8 |
30.2 |
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Gold in process |
|
79.9 |
67.9 |
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Finished inventories - Gold Bullion |
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105.6 |
82.8 |
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Total inventories |
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460.0 |
413.6 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
18 INCOME TAX
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SIGNIFICANT ACCOUNTING ASSUMPTIONS AND ESTIMATES
Management periodically evaluates positions taken where tax regulations are subject to interpretation. This includes the treatment of both Ergo and FWGR as single mining operations respectively, pursuant to the relevant ring-fencing legislation.
The deferred tax liability is calculated by applying a forecast weighted average tax rate that is based on a prescribed formula. The calculation of the forecast weighted average tax rate requires the use of assumptions and estimates and are inherently uncertain and could change materially over time. These assumptions and estimates include expected future profitability and timing of the reversal of the temporary differences. Due to the forecast weighted average tax rate being based on a prescribed formula that increases the effective tax rate with an increase in forecast future profitability, and vice versa, the tax rate can vary significantly year on year and can move contrary to current period financial performance.
A 100 basis points increase in the effective tax rate will result in an increase in the net deferred tax liability at 30 June 2024 of approximately R35.8 million (2023: R22.8 million; 2022: R18.7 million).
The assessment of the probability that future taxable profits will be available against which the tax losses and unredeemed capital expenditure can be utilised requires the use of assumptions and estimates and are inherently uncertain and could change materially over time.
Capital expenditure is assessed by the South African Revenue Service (“SARS”) when it is redeemed against taxable mining income rather than when it is incurred. A different interpretation by SARS regarding the deductibility of these capital allowances may therefore become evident subsequent to the year of assessment when the capital expenditure is incurred.
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ACCOUNTING POLICIES
Income tax expense comprises current and deferred tax. Each company is taxed as a separate entity and tax is not set-off between the companies.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment on tax payable or receivable in respect of the previous year. Amounts are recognised in profit or loss except to the extent that it relates to items recognised directly in equity or other comprehensive income. The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax is not recognised on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit.
Deferred tax assets relating to unutilised tax losses and unutilised capital allowances are recognised to the extent that it is probable that future taxable profits will be available against which the unutilised tax losses and unutilised capital allowances can be utilised. The recoverability of these assets is reviewed at each reporting date and adjusted if recovery is no longer probable.
Deferred tax related to gold mining income is measured at a forecast weighted average tax rate that is expected to be applied to temporary differences when they reverse, using tax rates enacted or substantially enacted at the reporting date. The calculation of the forecast weighted average tax rate requires the use of assumptions and estimates, including the Group’s life-of-mine plan (as discussed in note 9 to the consolidated financial statements) that is applied to calculate the expected future profitability.
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Current tax on gold mining income for the periods presented was determined based on a formula: Y = 33 - 165/X (2022 and 2021: Y = 34 - 170/X) where Y is the percentage rate of tax payable and X is the ratio of taxable income, net of any qualifying capital expenditure that bears to gold mining income derived, expressed as a percentage. Non-mining income, which consists primarily of interest accrued and management fees, is taxed at a standard rate of 27% (2023: 27% and 2022: 28%) for the periods presented.
All mining capital expenditure is deducted in the year it is incurred to the extent that it does not result in an assessed loss. Capital expenditure not deducted from mining income is carried forward as unutilised capital allowances to be deducted from future mining income.
Deferred tax is recognised using the gold mining tax formula to calculate a forecast weighted average tax rate considering the expected timing of the reversal of temporary differences. The formula is calculated as: Y = 33 – 165/X where Y is the percentage rate of tax payable and X is the ratio of taxable income, net of any qualifying capital expenditure that bears to mining income derived, expressed as a percentage.
Due to the forecast weighted average tax rate being based on the expected future profitability, the tax rate can vary significantly year-on-year and can move contrary to current year financial performance.
The forecast weighted average deferred tax rate of Ergo increased to 25% due to an increase in profitability which was primarily driven by the increase in forecast gold prices and expected electricity savings from the solar power plant and battery energy storage system (2023: remained at 22%). The forecast weighted average deferred tax rate of FWGR remained unchanged at 29% (2023: remained at 29%).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
18 INCOME TAX continued
18.1 INCOME TAX EXPENSE
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Amounts in R million |
2024 |
2023 |
2022 |
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Current tax |
(99.7) |
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(286.3) |
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(261.6) |
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Mining tax |
(92.4) |
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(253.0) |
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(250.2) |
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Mining tax prior year over provision |
5.4 |
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— |
— |
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Non-Mining, company and capital gains tax |
(12.7) |
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(33.3) |
(11.4) |
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Deferred tax |
(388.6) |
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(118.7) |
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(72.7) |
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Deferred tax charge - Mining tax |
(327.5) |
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(121.6) |
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(119.9) |
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Deferred tax charge - Mining tax prior year over provision |
6.1 |
— |
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— |
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Deferred tax charge - Non-mining, company and capital gains tax |
0.2 |
2.9 |
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1.6 |
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Deferred tax rate adjustment |
(67.3) |
— |
45.6 |
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Recognition of previously unrecognised income losses |
— |
— |
0.4 |
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Recognition of previously unrecognised temporary differences |
— |
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— |
(0.4) |
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(488.2) |
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(405.0) |
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(334.3) |
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Tax reconciliation |
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Major items causing the Group's income tax expense to differ from the statutory rate were: |
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Tax on net profit before tax at the South African corporate tax rate of 27% (2023: 27% and 2022: 28%) |
(490.6) |
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(455.3) |
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(408.3) |
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Rate adjustment to reflect the actual realised company tax rates applying the gold mining formula (a) |
46.1 |
47.6 |
36.4 |
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Deferred tax rate adjustment (b) |
(67.3) |
|
— |
45.6 |
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Depreciation of property, plant and equipment exempt from deferred tax on initial recognition (c) |
(16.8) |
(16.3) |
(22.2) |
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Non-deductible expenses (d) |
(8.2) |
|
(7.0) |
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(7.3) |
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Exempt income and other non-taxable income (e) |
9.8 |
21.8 |
19.0 |
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(Derecognition of previously recognised)/Recognition of previously unrecognised deductible temporary differences |
— |
— |
(0.4) |
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Utilisation of tax losses for which deferred tax assets were previously unrecognised |
— |
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— |
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0.4 |
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Prior year over provision |
11.5 |
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2.0 |
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— |
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Current year losses for which no deferred tax asset was recognised |
1.4 |
|
0.4 |
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(1.4) |
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Other |
(1.6) |
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(0.1) |
|
3.6 |
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Tax incentives (f) |
27.5 |
|
1.9 |
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0.3 |
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Income tax |
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Income tax |
(488.2) |
|
(405.0) |
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(334.3) |
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(a) Rate adjustment to reflect the actual realised company tax rates applying the gold mining formula
Ergo's current income tax rate, calculated using the gold mining tax formula, is 0% (2023:14%; 2022: 6% ).
FWGR's current income tax rate, calculated using the gold mining tax formula, is 25% (2023:30%; 2022: 31% )
(b) Deferred tax rate adjustment
Ergo’s forecast weighted average deferred tax rate increased to 25% from 22% (2023: remained unchanged at 22%; 2022: decreased to 22% from 25%).
FWGR’s forecast weighted average deferred tax rate remained unchanged at 29% (2023: remained unchanged at 29%; 2022: decreased to 29% from 30%).
(c) Depreciation of property, plant and equipment exempt from deferred tax on initial recognition
Depreciation of R62.1 million (2023: R54.9 million; 2022: R72.1 million) on the fair value of FWGR’s property, plant and equipment that was exempt from deferred tax on initial recognition in terms of IAS 12 Income Taxes.
(d) Non-deductible expenditure
The most significant non-deductible expenditure incurred by the Group during the year includes:
•R14.0 million discount recognised on payments made under protest (2023: R19.0 million; 2022: R21.1 million);
•R13.7 million expenditure not incurred in generation of taxable income or capital in nature (2023: R14.5 million; 2022: R17.8 million); and
•R1.3 million net operating cost related to Ergo Business Development Academy Not for Profit Company that is not deductible as it is exempt from income tax (2023: Rnil; 2022: R5.8 million).
(e) Exempt income and other non-taxable income
The most significant exempt income earned by the Group during the year includes:
•R29.3 million dividends received (2023: R78.3 million; 2022: R71.5 million);
•R7.2 million million unwinding recognised on payments made under protest (2023: R5.7 million: 2022: R5.8 million); and
•Rnil million net operating income related to Ergo Business Development Academy Not for Profit Company that is not taxable as it is exempt from income tax (2023: R2.5 million; 2022: Rnil)
(f) Tax incentives
The most significant tax incentive the Group benefited from include:
•R81.2 million tax incentive relating to Ergo's solar power plant.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
18 INCOME TAX continued
18.2 DEFERRED TAX
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Amounts in R million |
2024 |
2023 |
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Included in the statement of financial position as follows: |
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Deferred tax assets |
23.4 |
32.8 |
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Deferred tax liabilities |
(958.0) |
|
(560.7) |
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Net deferred tax liabilities |
(934.6) |
|
(527.9) |
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Reconciliation of the deferred tax balance: |
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Balance at the beginning of the year |
(527.9) |
|
(437.4) |
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Recognised in profit or loss |
(388.6) |
|
(118.7) |
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Recognised in other comprehensive income |
(0.1) |
0.7 |
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Recognised in equity |
(18.0) |
27.5 |
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Balance at the end of the year |
(934.6) |
|
(527.9) |
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The detailed components of the net deferred tax liabilities which result from the differences between the amounts of assets and liabilities recognised for financial reporting and tax purposes are: |
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Amounts in R million |
2024 |
2023 |
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Deferred tax liabilities |
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Property, plant and equipment (excluding unredeemed capital allowances) |
(1,075.1) |
|
(659.7) |
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Environmental rehabilitation obligation and other funds |
(103.4) |
|
(76.3) |
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Other investments |
(1.6) |
|
(0.6) |
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Gross deferred tax liabilities |
(1,180.1) |
|
(736.6) |
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Deferred tax assets |
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Environmental rehabilitation obligation |
159.0 |
113.9 |
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Other provisions1 |
73.0 |
81.0 |
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Other temporary differences2 |
7.4 |
9.0 |
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Estimated tax losses |
6.1 |
4.8 |
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Gross deferred tax assets |
245.5 |
208.7 |
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Net deferred tax liabilities |
(934.6) |
|
(527.9) |
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1 Includes the temporary differences on the equity settled share-based payment |
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2 Includes the temporary differences on the lease liability |
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Deferred tax assets have not been recognised in respect of the following: |
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Amounts in R million |
2024 |
2023 |
|
|
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|
Estimated tax losses |
17.1 |
17.2 |
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Estimated tax losses - Capital nature |
313.6 |
313.6 |
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Unredeemed capital expenditure |
244.4 |
252.0 |
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Deferred tax assets for tax losses, unredeemed capital expenditure and capital losses have not been recognised where future taxable profits against which these can be utilised are not anticipated. These do not have an expiry date. A maximum of R1 million or 80% of assessed losses (whichever is greater) is permitted to be set-off per year against taxable income. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
19 EMPLOYEE BENEFITS
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Equity settled share-based payments (“new long-term incentive” or “ELTI”)
The grant date fair value of equity settled share-based payment arrangements is recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at vesting date.
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19.1 EQUITY SETTLED LONG-TERM INCENTIVE SCHEME (“ELTI scheme”)
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Amounts in R million |
|
2024 |
2023 |
2022 |
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Share based payment expense - ELTI scheme |
5.3 |
26.4 |
22.0 |
18.4 |
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On December 2, 2019, the shareholders approved a new equity settled long-term incentive scheme to replace the cash settled long-term incentive scheme established in November 2015. Under the new LTI scheme, qualifying employees are awarded conditional shares on an annual basis, comprising performance shares (80% of the total conditional shares awarded) and retention shares (20% of the total conditional shares awarded). Conditional shares will vest 3 years after grant date and will be settled in the form of DRDGOLD shares at a zero-exercise price.
The key conditions of the grants made under the ELTI scheme are:
Retention shares:
100% of the retention shares will vest if the employee remains in the active employ of the Company at vesting date, is not under notice period and individual performance criteria are met.
Performance shares:
Total shareholder’s return (“TSR”) measured against a hurdle rate of 15% referencing DRDGOLD’s Weighted Average Cost of Capital (“WACC”):
• 50% of the performance shares are linked to this condition; and
• all of these performance shares will vest if DRDGOLD’s TSR exceeds the hurdle rate over the vesting period.
TSR is measured against a peer group of 3 peers (Sibanye-Stillwater, Harmony Gold Mining Company Limited and Pan-African Resources Limited):
• 50% of the performance shares are linked to this condition; and
• The number of performance shares which vest is based on DRDGOLD’s actual TSR performance in relation to percentiles of peer group’s performance as follows:
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Percentile of peers |
% of performance shares vesting |
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< 25th percentile |
0 |
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% |
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25th to < 50th percentile |
25 |
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% |
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50th to < 75th percentile |
75 |
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% |
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≥ 75th percentile |
100 |
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% |
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Reconciliation of the number of conditional shares |
2024 |
2023 |
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Number of Shares |
Weighted average price
R per share |
Number of Shares |
Weighted average price
R per share |
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Opening balance |
9,524,238 |
|
7,593,670 |
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Granted |
|
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October 19, 2022 |
|
|
4,922,751 |
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October 25, 2023 |
2,860,551 |
|
— |
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Vested1 |
(806,582) |
17.07 |
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(2,715,604) |
11.44 |
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Forfeited |
(265,061) |
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|
(276,579) |
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Expired1 |
(806,582) |
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— |
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Closing balance |
10,506,564 |
|
9,524,238 |
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Vesting on |
10,506,564 |
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9,524,238 |
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October 22, 2023 |
— |
|
1,588,120 |
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October 20, 2024 |
3,122,592 |
|
3,081,179 |
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October 19, 2025 |
4,621,908 |
|
4,854,939 |
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October 25, 2026 |
2,762,064 |
|
— |
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1 50% of the total grant did not vest as a result of performance conditions not being met |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
19.1 EQUITY SETTLED LONG-TERM INCENTIVE SCHEME (“ELTI scheme”)
Fair value
The weighted average fair value of the performance and retention shares at grant date were determined using the Monte Carlo simulation pricing model applying the following key inputs:
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Grant date |
October 25, 2023 |
October 19, 2022 |
October 20, 2021 |
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Vesting date |
October 25, 2026 |
October 19, 2025 |
October 20, 2024 |
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Weighted average fair value of 80% performance shares1 |
7.72 |
5.54 |
7.34 |
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Weighted average fair value of 20% retention shares |
16.24 |
8.60 |
12.32 |
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Expected term (years) |
3 |
3 |
3 |
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Grant date share price of a DRDGOLD share |
16.89 |
9.48 |
13.55 |
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Expected dividend yield |
1.30 |
% |
3.24 |
% |
3.15 |
% |
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Expected volatility2 |
44.55 |
% |
58.00 |
% |
60.20 |
% |
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Expected risk free rate |
8.27 |
% |
8.10 |
% |
5.78 |
% |
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1 The performance conditions are included in the measurement of the grant date fair value as they are classified as market-based performance conditions |
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2 Expected volatility has been based on an evaluation of the historical volatility of DRDGOLD’s share price, commensurate with the expected term of the options |
19.2 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Interests in contracts
None of the directors, officers or major shareholders of DRDGOLD or, to the knowledge of DRDGOLD’s management, their families, had any interest, direct or indirect, in any transaction entered into during the year ended 30 June 2024 or the preceding financial years, or in any proposed transaction which has affected or will materially affect DRDGOLD or its subsidiaries other than disclosed in these financial statements. None of the directors or officers of DRDGOLD or any associate of such director or officer is currently or has been at any time during the past financial year materially indebted to DRDGOLD.
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Key management personnel remuneration |
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Amounts in R million |
Note |
2024 |
2023 |
2022 |
|
|
|
|
|
|
|
- Board fees paid |
|
7.9 |
7.6 |
7.8 |
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- Salaries paid |
|
93.2 |
82.0 |
82.5 |
|
- Short term incentives relating to this cycle |
|
94.0 |
83.8 |
84.1 |
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- Market value of long-term incentives vested and transferred |
19.1 |
13.7 |
31.1 |
40.1 |
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|
|
|
|
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|
|
|
208.8 |
204.5 |
214.5 |
20 CAPITAL MANAGEMENT
The primary objective of the Group's capital management policy is to ensure that adequate capital is available to meet the requirements of the Group from time to time, including capital expenditure. The Group considers the appropriate capital management strategy for specific growth projects as and when required. Lease liabilities are not considered to be debt.
Liquidity management
To fund the significant capital expansion programme at both operations, on 28 June 2024, DRDGOLD secured a R500 million general bank facility ("GBF") with Nedbank. The facility remained undrawn at 30 June 2024. In addition to the GBF, on 31 July 2024, DRDGOLD entered into a 5-year R1 billion RCF with a R500 million accordion option with Nedbank. On 13 September 2024, R30 million of the GBF was committed to issue a guarantee to ESKOM Holdings SOC Limited (“ESKOM”) on behalf of Stellar Energy Solutions SPV ("Stellar"), a 150MW renewable energy project which is 50.25% owned by DRDGOLD.
The RCF permitted an interest cover ratio (adjusted EBITDA to net finance charges) of no more than 4:1 and a leverage ratio (total net debt to adjusted EBITDA) of no less than 2:1 calculated on a twelve-month rolling basis, respectively. Management monitors the covenant ratio levels to ensure compliance with the covenants, as well as maintain sufficient facilities to ensure satisfactory liquidity for the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
21 EQUITY
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ACCOUNTING POLICIES
Stated share capital
Ordinary shares and the cumulative preference shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effect.
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|
Repurchase and reissue of share capital (treasury shares)
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from stated share capital.
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Dividends
Dividends are recognised as a liability on the date on which they are declared which is the date when the shareholders’ right to the dividends vests.
|
21.1 STATED SHARE CAPITAL
All ordinary shares rank equally regarding the Company’s residual assets. Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. All rights attached to the Company’s shares held by the Group are suspended until those shares are reissued.
Preference shareholders participate only to the extent of the face value of the shares. Holders of preference shares do not have the right to participate in any additional dividends declared for ordinary shareholders. These shares do not have voting rights.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
2024 |
2023 |
2022 |
|
|
|
|
|
|
Authorised share capital |
|
|
|
|
1,500,000,000 (2023 and 2022: 1,500,000,000) ordinary shares of no par value |
|
|
|
|
5,000,000 (2023 and 2022: 5,000,000) cumulative preference shares of 10 cents each |
0.5 |
0.5 |
0.5 |
|
|
|
|
|
|
Issued share capital |
|
|
|
|
864,588,711 (2023 and 2022: 864,588,711) ordinary shares of no par value |
6,208.4 |
6,208.4 |
6,208.4 |
|
3,090,081 (2023: 3,896,663; 2022: 6,612,266) treasury shares held within the Group (a) |
(16.7) |
|
(21.0) |
|
(35.6) |
|
5,000,000 (2023 and 2022: 5,000,000) cumulative preference shares of 10 cents each |
0.5 |
0.5 |
0.5 |
|
|
6,192.2 |
6,187.9 |
6,173.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
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RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
|
|
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(a) Treasury shares
Shares in DRDGOLD Limited are held in treasury by Ergo Mining Operations Proprietary Limited ("EMO"). No shares were acquired in the market during the year ended June 30, 2024 or the year ended June 30, 2023 or the year ended June 30, 2022. During the year ended June 30, 2024 806,582 (June 30, 2023: 2,715,604; June 30, 2022: 2,862,654) shares were used to settle the equity settled share-based payment, at Rnil cashflow to the Group. R4.3 million (June 30, 2023: R14.6 million; June 30, 2022: R15.4 million), representing the average cost of the treasury shares used to settle the share-based payment, was transferred to retained earnings.
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21.2 DIVIDENDS
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
2024 |
2023 |
2022 |
|
|
|
|
|
|
Dividends paid during the year net of treasury shares: |
|
|
|
|
Final dividend declared relating to prior year: 65 SA cents per share (2023: 40 SA cents per share; 2022: 40 SA cents per share) |
559.4 |
343.2 |
342.0 |
|
Interim dividend: 20 SA cents per share (2023: 20 SA cents per share; 2022: 20 SA cents per share) |
172.3 |
172.1 |
171.6 |
|
Total |
731.7 |
515.3 |
513.6 |
|
|
|
|
|
After 30 June 2024, a dividend of 20 SA cents per qualifying share amounting to R172.3 million was declared by the directors as a final dividend for the year ended 30 June 2024. The dividend has not been provided for and does not have any tax impact on the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
22 INTEREST IN SUBSIDIARIES
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ACCOUNTING POLICIES
Significant subsidiaries of the Group are those subsidiaries with the most significant contribution to the Group's profit or loss or assets.
|
Ergo Mining Proprietary Limited (“Ergo”) and Far West Gold Recoveries Proprietary Limited (“FWGR”) are the only significant subsidiaries of the Group. They are both wholly owned subsidiaries and are incorporated in South Africa, are primarily involved in the retreatment of surface gold and all their operations are based in South Africa.
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A complete list of subsidiaries is provided below: |
|
|
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|
|
Name of entity |
Activity |
|
|
|
|
Subsidiaries directly held |
|
|
Ergo Mining Operations Proprietary Limited |
Holding company of treasury shares |
|
Ergo Mining Proprietary Limited |
Surface gold mining |
|
Far West Gold Recoveries Proprietary Limited |
Surface gold mining |
|
East Rand Proprietary Mines Limited |
Care and maintenance |
|
Crown Gold Recoveries Proprietary Limited |
Non - operational |
|
Crown Consolidated Gold Recoveries Limited |
Dormant |
|
West Witwatersrand Gold Holdings Limited |
Dormant |
|
Rand Leases (Vogelstruisfontein) Gold Mining Company Limited |
Dormant |
|
Argonaut Financial Services Proprietary Limited |
Dormant |
|
Roodepoort Gold Mine Proprietary Limited |
Dormant |
|
|
|
|
Subsidiaries indirectly held |
|
|
Ergo Business Development Academy NPC |
Training centre |
|
West Witwatersrand Gold Mines Limited |
Dormant |
|
Crown Mines Limited |
Dormant |
|
City Deep Limited |
Dormant |
|
Consolidated Main Reef and Estate Limited |
Dormant |
|
Stellar energy solutions Proprietary Limited |
Renewable power producer |
|
|
|
|
All subsidiaries are 100% owned by DRDGOLD, except for Stellar Energy Solutions Proprietary Limited which is 50.25% owned by Ergo, and are incorporated in South Africa. |
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23 |
OPERATING SEGMENTS |
|
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ACCOUNTING POLICIES
Operating segments are reported in a manner consistent with internal reports that the Group’s chief operating decision maker (“CODM”) reviews regularly in allocating resources and assessing performance of operating segments. The CODM has been identified as the Group’s Executive Committee. The Group has one material revenue stream, the sale of gold. To identify operating segments, management reviewed various factors, including operational structure and mining infrastructure. It was determined that an operating segment consists of a single or multiple metallurgical plants and reclamation sites that, together with its tailings storage facility, is capable of operating independently.
When assessing profitability, the CODM considers, inter alia, the revenue and cash operating costs of each segment. The net of these amounts is the segment operating profit or loss. Therefore, segment operating profit has been disclosed as the primary measure of profit or loss. The CODM also considers the additions to property, plant and equipment.
|
The Group has one material revenue stream, the sale of gold. The following summary describes the operations in the Group’s reportable operating segments:
Ergo is a surface gold retreatment operation which treats old slime dams and sand dumps to the south of Johannesburg’s central business district as well as the East and Central Rand goldfields. The operation comprises three plants and a solar plant with a BESS. The Ergo plant as a metallurgical plant and the City Deep and Knights plants as a pump/milling station feeding the Ergo plant.
FWGR is a surface gold retreatment operation which treats old slime dams in the West Rand goldfields. The operation comprises the Driefontein 2 plant and relevant infrastructure to process tailings from the Driefontein 5 and 3 slimes dam and deposit residues on the Driefontein 4 TSF.
Corporate office and other reconciling items collectively referred to as "Other reconciling items") represent the items to reconcile to the consolidated financial statements. This does not represent a separate segment as it does not generate mining revenue.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
|
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| 23 |
OPERATING SEGMENTS continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ergo |
FWGR |
Other reconciling items |
Total |
|
2024 |
|
Amounts in R million |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (External) |
4,524.9 |
1,714.8 |
— |
6,239.7 |
|
Cash operating costs |
(3,571.0) |
|
(622.3) |
|
— |
(4,193.3) |
|
|
Movement in gold in process and finished inventories - Gold Bullion |
37.5 |
(2.6) |
|
— |
34.9 |
|
Segment operating profit |
991.4 |
1,089.9 |
— |
2,081.3 |
|
|
|
|
|
|
|
Additions to property, plant and equipment |
(2,354.6) |
|
(756.6) |
|
(2.7) |
(3,113.9) |
|
|
|
|
|
|
|
|
Reconciliation of segment operating profit to profit after tax |
|
|
|
|
|
Segment operating profit |
991.4 |
1,089.9 |
— |
2,081.3 |
|
Depreciation |
(138.7) |
|
(129.5) |
|
(2.2) |
|
(270.4) |
|
|
Change in estimate of environmental rehabilitation recognised in profit or loss |
11.1 |
|
0.2 |
|
0.3 |
11.6 |
|
|
Ongoing rehabilitation expenditure |
(13.0) |
|
(2.1) |
|
(1.0) |
(16.1) |
|
|
Care and maintenance |
— |
— |
2.5 |
|
2.5 |
|
|
Other operating costs |
0.9 |
|
— |
|
— |
|
0.9 |
|
|
Other income |
0.6 |
1.3 |
0.1 |
2.0 |
|
Administration expenses and other costs |
(10.6) |
|
(5.5) |
|
(183.2) |
|
(199.3) |
|
|
Finance income |
51.8 |
53.9 |
175.1 |
280.8 |
|
Finance expense |
(60.9) |
|
(11.7) |
|
(3.8) |
|
(76.4) |
|
|
Current tax |
5.4 |
|
(92.5) |
|
(12.6) |
|
(99.7) |
|
|
Deferred tax |
(205.1) |
|
(183.7) |
|
0.3 |
(388.5) |
|
|
Profit after tax |
632.9 |
720.3 |
(24.5) |
1,328.7 |
|
|
|
|
|
|
|
Reconciliation of cost of sales to cash operating costs |
|
|
|
|
|
Cost of sales |
(3,673.2) |
|
(756.3) |
|
(0.4) |
|
(4,429.9) |
|
|
Depreciation |
138.7 |
129.5 |
2.2 |
270.4 |
|
Change in estimate of environmental rehabilitation recognised in profit or loss |
(11.1) |
(0.2) |
(0.3) |
(11.6) |
|
Movement in gold in process and finished inventories - Gold Bullion |
(37.5) |
|
2.6 |
— |
(34.9) |
|
|
Ongoing rehabilitation expenditure |
13.0 |
2.1 |
1.0 |
16.1 |
|
Care and maintenance |
— |
— |
(2.5) |
(2.5) |
|
Other operating costs |
(0.9) |
— |
— |
(0.9) |
|
Cash operating costs |
(3,571.0) |
|
(622.3) |
|
— |
(4,193.3) |
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
|
|
|
|
|
|
| 23 |
OPERATING SEGMENTS continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ergo |
FWGR |
Other reconciling items |
Total |
|
2023 |
|
Amounts in R million |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (External) |
4,108.6 |
1,387.7 |
— |
5,496.3 |
|
Cash operating costs |
(3,183.2) |
|
(504.9) |
|
— |
(3,688.1) |
|
|
Movement in gold in process and finished inventories - Gold Bullion |
(1.8) |
|
12.6 |
— |
10.8 |
|
|
Segment operating profit |
923.6 |
895.4 |
— |
1,819.0 |
|
|
|
|
|
|
|
Additions to property, plant and equipment |
(816.0) |
|
(209.8) |
|
(5.1) |
|
(1,030.9) |
|
|
|
|
|
|
|
|
Reconciliation of segment operating profit to profit after tax |
|
|
|
|
|
Segment operating profit |
923.6 |
895.4 |
— |
1,819.0 |
|
Depreciation |
(120.6) |
|
(95.8) |
|
(1.1) |
|
(217.5) |
|
|
Change in estimate of environmental rehabilitation recognised in profit or loss |
6.2 |
|
— |
|
0.9 |
|
7.1 |
|
|
Ongoing rehabilitation expenditure |
(24.7) |
|
(1.7) |
|
(0.4) |
|
(26.8) |
|
|
Care and maintenance |
— |
— |
(0.4) |
|
(0.4) |
|
|
Other operating costs |
3.9 |
— |
— |
3.9 |
|
Other income |
0.1 |
10.2 |
0.1 |
10.4 |
|
Administration expenses and other costs |
(8.3) |
(2.9) |
(161.7) |
|
(172.9) |
|
|
Finance income |
34.4 |
31.8 |
268.1 |
334.3 |
|
Finance expense |
(58.7) |
|
(9.7) |
|
(2.3) |
|
(70.7) |
|
|
Current tax |
(51.1) |
|
(201.9) |
|
(33.3) |
(286.3) |
|
|
Deferred tax |
(73.8) |
|
(47.9) |
|
3.0 |
(118.7) |
|
|
Profit after tax |
631.0 |
577.5 |
72.9 |
1,281.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cost of sales to cash operating costs |
|
|
|
|
|
Cost of sales |
(3,320.2) |
|
(589.8) |
|
(1.0) |
(3,911.0) |
|
|
Depreciation |
120.6 |
95.8 |
1.1 |
217.5 |
|
Change in estimate of environmental rehabilitation recognised in profit or loss |
(6.2) |
— |
(0.9) |
(7.1) |
|
Movement in gold in process and finished inventories - Gold Bullion |
1.8 |
(12.6) |
|
— |
(10.8) |
|
Ongoing rehabilitation expenditure |
24.7 |
1.7 |
0.4 |
26.8 |
|
Care and maintenance |
— |
— |
0.4 |
0.4 |
|
Other operating costs |
(3.9) |
|
— |
— |
(3.9) |
|
|
Cash operating costs |
(3,183.2) |
|
(504.9) |
|
— |
(3,688.1) |
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
|
|
|
|
|
|
| 23 |
OPERATING SEGMENTS continued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ergo |
FWGR |
Other reconciling items |
Total |
|
2022 |
|
Amounts in R million |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (External) |
3,704.9 |
1,413.6 |
— |
5,118.5 |
|
Cash operating costs |
(3,009.8) |
|
(454.0) |
|
— |
(3,463.8) |
|
|
Movement in gold in process and finished inventories - Gold Bullion |
35.2 |
|
(4.8) |
— |
30.4 |
|
|
Segment operating profit |
730.3 |
954.8 |
— |
1,685.1 |
|
|
|
|
|
|
|
Additions to property, plant and equipment |
(436.2) |
|
(162.2) |
|
— |
|
(598.4) |
|
|
|
|
|
|
|
|
Reconciliation of segment operating profit to profit after tax |
|
|
|
|
|
Segment operating profit |
730.3 |
|
954.8 |
|
— |
|
1,685.1 |
|
|
Depreciation |
(134.5) |
|
(131.6) |
|
(1.5) |
|
(267.6) |
|
|
Change in estimate of environmental rehabilitation recognised in profit or loss |
2.3 |
|
— |
|
(0.1) |
2.2 |
|
|
Ongoing rehabilitation expenditure |
(30.1) |
(1.5) |
— |
(31.6) |
|
Care and maintenance |
— |
— |
(5.9) |
(5.9) |
|
Other operating costs |
(4.9) |
(0.2) |
(0.1) |
|
(5.2) |
|
|
Other income |
70.1 |
21.2 |
— |
91.3 |
|
Administration expenses and other costs |
(7.7) |
|
(13.8) |
|
(139.7) |
|
(161.2) |
|
|
Finance income |
22.4 |
|
19.0 |
|
184.4 |
225.8 |
|
|
Finance expense |
(58.8) |
|
(10.8) |
|
(5.2) |
(74.8) |
|
|
Current tax |
(12.9) |
|
(237.3) |
|
(11.4) |
(261.6) |
|
|
Deferred tax |
(45.3) |
|
(29.6) |
2.2 |
(72.7) |
|
|
Profit after tax |
530.9 |
570.2 |
22.7 |
1,123.8 |
|
|
|
|
|
|
|
|
|
Reconciliation of cost of sales to cash operating costs |
|
|
|
|
|
Cost of sales |
(3,141.8) |
(592.1) |
(7.6) |
(3,741.5) |
|
Depreciation |
134.5 |
131.6 |
|
1.5 |
267.6 |
|
Change in estimate of environmental rehabilitation recognised in profit or loss |
(2.3) |
— |
0.1 |
(2.2) |
|
Movement in gold in process and finished inventories - Gold Bullion |
(35.2) |
|
4.8 |
— |
(30.4) |
|
|
Ongoing rehabilitation expenditure |
30.1 |
1.5 |
|
— |
31.6 |
|
Care and maintenance |
— |
— |
|
5.9 |
5.9 |
|
Other operating costs |
4.9 |
|
0.2 |
0.1 |
5.2 |
|
|
Cash operating costs |
(3,009.8) |
(454.0) |
— |
(3,463.8) |
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
24 PAYMENTS MADE UNDER PROTEST
|
|
|
|
|
|
|
SIGNIFICANT ACCOUNTING JUDGEMENTS
Payments made under protest
The determination of whether the payments made under protest give rise to an asset or a contingent asset or neither, required the use of significant judgement. The definition of an asset in the conceptual framework was applied as well as the considerations in the outcome of the IFRS Interpretations Committee (“IFRIC”) agenda decision – Deposits relating to taxes other than income tax (IAS 37 Provisions, Contingent Liabilities and Contingent Assets) (“IFRIC Agenda Decision”) published in January 2019. The IFRIC Agenda Decision has a similar fact pattern to that of the payments made under protest. With the consideration of the facts and circumstances surrounding the payments made under protest in applying the definition of an asset and the IFRIC Agenda Decision management considered the following:
•payments were made under protest and without prejudice or admission of liability. Such payments were not made as a settlement of debt or recognition of expenditure;
•the Group therefore retains a right to recover the payments from the City of Ekurhuleni Metropolitan Municipality (“Municipality”) if the Group is successful in the Main Application (as defined below);
•if the Group is not successful in the Main Application, the payments will be used to settle the resultant liability to the Municipality; and
•these two possible outcomes (i.e. success in the Main Application or not) therefore, will lead to economic benefits to the Group.
Therefore, the right to recover the payments made under protest is not a contingent asset because it meets the definition and recognition criteria of an asset.
No specific guidance exists in developing an accounting policy for such asset. Therefore, management applied judgement in developing an accounting policy that would lead to information that is relevant to the users of these financial statements and information that can be relied upon.
Contingent liabilities
The assessment of whether an obligating event results in a liability or a contingent liability requires the exercise of significant judgement of the outcome of future events that are not wholly within the control of the Group.
Litigation and other judicial proceedings inherently entail complex legal issues that are subject to uncertainties and complexities and are subject to interpretation.
SIGNIFICANT ACCOUNTING ASSUMPTIONS AND ESTIMATES
The discounted amount of the payments made under protest is determined using assumptions about the future that are inherently uncertain and can change materially over time and includes the discount rate and discount period.
These assumptions about the future include estimating the timing of concluding on the Main Application, i.e. the discount period, the ultimate settlement terms, the discount rate applied and the assessment of recoverability.
|
|
ACCOUNTING POLICIES
Payments made under protest
Recognition and measurement
The payment made under protest asset that arises from the Municipality Electricity Tariff Dispute is initially measured at a discounted amount, and any difference between the face value of payments made under protest and the discounted amount on initial recognition is recognised in profit or loss as a finance expense. Subsequent to initial recognition, the payments made under protest is measured using the effective interest method to unwind the discounted amount to the original face value less any write downs for recovery. Unwinding of the carrying value and changes in the discount period are recognised in finance income.
Assessment of recoverability
The discounted amount of the payments under protest is assessed at each reporting date to determine whether there is any objective evidence that the full amount is no longer expected to be recovered. The Group considers the reasonable and supportable information related to the creditworthiness of the Municipality and events surrounding the outcome of the Main Application. Any write down is recognised in finance expense.
Contingent liabilities
A contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. A contingent liability may also be a present obligation arising from past events but is not recognised on the basis that an outflow of economic resources to settle the obligation is not viewed as probable, or the amount of the obligation cannot be reliably measured. When the Group has a present obligation, an outflow of economic resources is assessed as probable and the Group can reliably measure the obligation, a provision is recognised.
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
24 PAYMENTS MADE UNDER PROTEST continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in R million |
Note |
2024 |
2023 |
|
|
|
|
|
|
Balance at the beginning of the year |
|
39.7 |
40.4 |
|
Payments made under protest |
|
12.7 |
12.6 |
|
Discount on initial payment made under protest and change in estimate |
7 |
(14.0) |
(19.0) |
|
Unwinding |
6 |
7.2 |
5.7 |
|
|
|
|
|
|
Balance at the end of the year |
|
45.6 |
39.7 |
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Ekurhuleni Metropolitan Municipality ("Municipality") Electricity Tariff Dispute
There are primarily 3 (three) legal proceedings for which relief has been sought in the appropriate legal fora and all of which fall within the jurisdiction of the High Court of South Africa, Gauteng Local Division, Johannesburg. These comprise of an application brought by Ergo and action proceedings brought under two summonses by the Municipality.
In order to operate the Ergo Plant and conduct its business operations, Ergo requires a reliable and steady feed of electricity which it draws from the newly commissioned Brakpan Tailings 88Kv Substation since June 2024, before this the Ergo Plant used to draw electricity from the Ergo Central Substation.
Over the past several years the Municipality has charged Ergo for such electricity, at the Megaflex tariff at which ESKOM Holdings SOC Limited (“ESKOM”) charges its large power users plus an additional surcharge, as it still does; and Ergo paid therefor.
Pursuant to its own investigations, and after having sought legal advice on the matter, Ergo determined that only ESKOM may legitimately charge it for the electricity so drawn and consumed at the Ergo Plant, specifically from the Ergo Central Substation. Despite this, ESKOM refused to either accept payment from Ergo in respect of such electricity consumption or to conclude a consumer agreement with it.
In December 2014, Ergo instituted legal proceedings by way of an application (“Main Application”) against the Municipality and ESKOM as well as the National Energy Regulator of South Africa (“NERSA”), the Minister of Energy, the Minister of Co-operative Governance & Traditional Affairs and the South African Local Government Association, the latter 4 (four) respondents against whom Ergo does not seek any relief.
Ergo seeks the undermentioned relief:
•declaring that the Municipality does not supply electricity to it at the Ergo Plant;
•declaring that the Municipality is in breach of its temporary Distribution License (issued by NERSA) by purporting to supply electricity to Ergo at the Ergo Plant;
•declaring that neither the Municipality nor ESKOM may lawfully insist that only the Municipality may supply electricity to Ergo at the Ergo Plant;
•declaring that ESKOM presently supplies electricity to Ergo at the Ergo Plant; and
•directing ESKOM to conclude a consumer agreement with Ergo for the supply of electricity at the Ergo Plant at its Megaflex tariff.
The Municipality has since issued two summonses (“Summonses”) for the recovery of arrears it alleges it is owed amounting to R74.0 million and R31.6 million, respectively.
In the interest of the proper administration of justice, the Main Application was postponed by agreement between the parties and a case manager was appointed to determine a collaborative process to facilitate the effective and efficient court scheduling and coordination of both the Main Application and the Summonses.
In order to secure uninterrupted supply of electricity, Ergo has made payment and continues to pay for consumption at the amended and lower “J-Tariff”, albeit under protest and without prejudice and/or admission of liability. Whilst still deemed to be disproportionate, the J-Tarif is significantly lower than the previously imposed “D-Tariff”. The Group recognised an asset for these payments that are made “under protest”.
Ergo has also brought an application for the consolidation of both the Main Application and the action proceedings brought under the Summonses, which is still ongoing.
The Group supported by the external legal team is confident that there is a high probability that Ergo will be successful in the Main Application and defending the Summonses. Therefore, there is no present obligation as a result of a past event to pay the amounts claimed by the Municipality (refer note 26.3).
The Group has been advised that an application brought by the South African Local Government Association ("SALGA") to challenge ESKOM's ability to supply customers with electricity must be heard, adjudicated and finalised prior to that of the Main Application. The SALGA matter appears to have stalled, due to the interlocutory, joinder applications in the SALGA application. As the SALGA application is pivotal, it is anticipated that any decision handed down will be appealed, finally ending up in the Constitutional Court.
The balance at the end of the year was based on the following assumptions:
•discount rate: 15.30% (2023: 15.30%) representing the Municipality maximum cost of borrowing on bank loans as disclosed in their June 30, 2023 annual report and an additional risk premium on uncertainties in timing of the SALGA case; and
•discount period: June 30, 2029 (2023: June 30, 2028) representing management’s best estimate of the date of conclusion of the Main Application and is supported by external legal counsel. The discount period has increased due to there not being any movement on the matter in the current year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
25 OTHER INVESTMENTS
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ACCOUNTING JUDGEMENTS
The Group has one (1) director representative on the Rand Refinery board. Therefore, judgement had to be applied to ascertain whether significant influence exists, and if the investment should be accounted for as an associate under IAS 28 Investments in Associates and Joint Ventures. The director representation is not considered significant influence, as it does not constitute meaningful representation. It represents 11.11% of the entire board and is proportional to the 11% shareholding that the Group has.
SIGNIFICANT ACCOUNTING ASSUMPTIONS AND ESTIMATES
The fair value of the listed equity instrument is determined based on quoted prices on an active market. Equity instruments which are not listed on an active market are measured using other applicable valuation techniques depending on the extent to which the technique maximises the use of relevant observable inputs and minimises the use of unobservable inputs. Where discounted cash flows are used, the estimated cash flows are based on management’s best estimate based on readily available information at measurement date. The discounted cash flows contain assumptions about the future that are inherently uncertain and can change materially over time.
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ACCOUNTING POLICIES
On initial recognition of an equity investment that is not held for trading, the Group may make an irrevocable election to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an investment-by-investment basis.
These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition they are measured at fair value and changes therein are recognised in other comprehensive income (“OCI”), and are never reclassified to profit or loss, with dividends recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
The Group’s listed and unlisted investments in equity securities are classified as equity instruments at fair value through OCI because the Company intends to hold these investments for the long term for strategic purposes.
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Amounts in R million |
Shares held 1 |
% held 1 |
2024 |
2023 |
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Listed investments (Fair value hierarchy Level 1): |
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West Wits Mining Limited ("WWM") |
47,812,500 |
1.9 |
% |
7.5 |
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7.2 |
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Total listed investments |
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7.5 |
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7.2 |
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Unlisted investments (Fair value hierarchy Level 3): |
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Rand Refinery Proprietary Limited ("Rand Refinery") |
44,438 |
11.3 |
% |
166.8 |
|
156.3 |
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Rand Mutual Assurance Company Limited B Share Business Fund ("RMA") 2 |
12,659 |
1.3 |
% |
5.9 |
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4.9 |
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Guardrisk Insurance Company Limited (Cell Captive A170) 3 |
20 |
100 |
% |
0.1 |
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0.1 |
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Chamber of Mines Building Company Proprietary Limited |
52,965 |
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5.7 |
% |
0.1 |
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0.1 |
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Total unlisted investments |
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172.9 |
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161.4 |
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Balance at the end of the year |
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180.4 |
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168.6 |
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Fair value adjustment on equity instruments at fair value through OCI |
|
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11.8 |
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17.2 |
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WWM |
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0.3 |
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(3.5) |
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Rand Refinery |
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10.5 |
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20.2 |
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RMA |
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1.0 |
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0.5 |
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Dividends received on equity instruments at fair value through OCI |
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(29.3) |
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(78.3) |
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Rand Refinery |
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(29.3) |
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(77.4) |
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RMA |
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— |
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(0.9) |
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1The number and percentage of shares held remained unchanged from the prior year with the exception of WWM that issued new shares thereby diluting DRDGOLD's effective shareholding from 2.1% to 1.9% |
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2The "B Share Business Fund" shares relate to all the businesses of the RMA Group that do not relate to the Compensation for Occupational Injuries and Diseases Act |
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3The shares held entitle the holder to 100% of the residual net equity of Cell Captive A 170 |
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MARKET RISK
Other market price risk
Equity price risk arises from changes in quoted market prices of listed investments as well as changes in the fair value of unlisted investments due to changes in the underlying net asset values
FAIR VALUE OF FINANCIAL INSTRUMENTS
Listed investments
The fair values of listed investments are determined by reference to published price quotations from recognised securities exchanges and constitute level 1 instruments in the fair value hierarchy.
Unlisted investments
The fair values of unlisted investments are determined through valuation techniques that include inputs that are not based on observable market data and constitute level 3 instruments in the fair value hierarchy.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
25 OTHER INVESTMENTS continued
25.1 RAND REFINERY
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Amounts in R million |
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2024 |
2023 |
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Balance at the beginning of the year |
|
156.3 |
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136.1 |
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Fair value adjustment on equity investments at fair value through other comprehensive income |
10.5 |
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20.2 |
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Balance at the end of the year |
|
166.8 |
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156.3 |
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In accordance with IFRS 13 Fair Value Measurement, the income approach has been established to be the most appropriate basis to estimate the fair value of the investment in Rand Refinery. This method relies on the future budgeted cash flows as estimated by Rand Refinery. Management used a model developed by an external expert to perform the valuation.
Rand Refinery’s refining operations (excluding Prestige Bullion) were valued using the Free Cash Flow model, whereby an enterprise value using a Gordon Growth formula for the terminal value was estimated. The forecasted dividend income to be received from Prestige Bullion was valued using a finite-life dividend discount model as Rand Refinery’s shareholding will be reduced to nil in 2032 per agreement with the South African Mint (partner in Prestige Bullion).
The fair value of Rand Refinery increased as a result of an increase in the enterprise value of the refining operations of Rand Refinery. The enterprise value of the refining operations of Rand Refinery increased as a result of a significant increase in forecast commodity prices despite increases in forecast operating costs and forecast capital costs. The value of the forecasted dividends for Prestige Bullion decreased as a result of a decrease in the discount period due to the model being finite and continued low demand for Krugerrands.
The fair value measurement uses significant unobservable inputs and relates to a fair value hierachy level 3 financial instrument. Marketability and minority discounts (both unobservable inputs) of 15.3% and 16.9% (2023: 15.3% and 17.0%), respectively, were applied. The latest budgeted cash flow forecasts provided by Rand Refinery as at 30 June 2024 was used, and therefore classified as an unobservable input into the models. Other key observable/unobservable inputs into the model include:
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Amounts in R million |
Observable/unobservable input |
Unit |
2024 |
2023 |
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Rand Refinery operations |
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Forecast average gold price |
Observable input |
R/kg |
1,209,686 |
1,060,562 |
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Forecast average silver price |
Observable input |
R/kg |
15,142 |
13,460 |
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Average South African CPI |
Observable input |
% |
4.5 |
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4.5 |
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South African long-term government bond rate |
Observable input |
% |
9.92 |
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10.51 |
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Terminal growth rate |
Unobservable input |
% |
4.5 |
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4.5 |
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Weighted average cost of capital |
Unobservable input |
% |
17.0 |
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17.0 |
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Investment in Prestige Bullion |
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Discount period |
Unobservable input |
years |
9 |
10 |
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Cost of equity |
Unobservable input |
% |
17.0 |
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17.0 |
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Sensitivity analysis
The fair value measurement is most sensitive to the Rand denominated gold price and operating costs. The higher the gold price, the higher the fair value of the Rand Refinery investment. The higher the operating costs, the lower the fair value of Rand Refinery. The fair value measurement is also sensitive to the discount rate and minority and marketability discounts applied. The below table indicates the extent of sensitivity of the Rand Refinery equity value to the inputs:
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Input |
Change in OCI, net of tax |
|
Amounts in R million |
|
% Increase |
% Decrease |
% Increase |
% Decrease |
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Rand Refinery operations |
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Rand US Dollar exchange rate |
Observable inputs |
1 |
(1) |
|
3.2 |
(3.2) |
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Commodity prices (gold and silver) |
Observable inputs |
1 |
(1) |
|
2.5 |
(2.5) |
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Operating costs |
Unobservable inputs |
1 |
(1) |
|
(2.9) |
|
2.9 |
|
Weighted average cost of capital |
Unobservable inputs |
1 |
(1) |
|
(3.7) |
|
3.7 |
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Minority discount |
Unobservable inputs |
1 |
(1) |
|
(1.2) |
|
1.2 |
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Marketability discount |
Unobservable inputs |
1 |
(1) |
|
(1.2) |
|
1.2 |
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Investment in Prestige Bullion |
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Cost of equity |
Unobservable inputs |
1 |
(1) |
|
(0.4) |
|
0.4 |
|
Prestige Bullion dividend forecast |
Unobservable inputs |
1 |
(1) |
|
0.1 |
(0.1) |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
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26 |
CONTINGENCIES |
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SIGNIFICANT ACCOUNTING JUDGEMENTS
The assessment of whether an obligating event results in a liability or a contingent liability requires the exercise of significant judgement of the outcome of future events that are not wholly within the control of the Group.
Litigation and other judicial proceedings inherently entail complex legal issues that are subject to uncertainties and complexities and are subject to interpretation.
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ACCOUNTING POLICIES
Contingent liabilities
A contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. A contingent liability may also be a present obligation arising from past events but is not recognised on the basis that an outflow of economic resources to settle the obligation is not viewed as probable, or the amount of the obligation cannot be reliably measured. When the Group has a present obligation, an outflow of economic resources is assessed as probable and the Group can reliably measure the obligation, a provision is recognised.
Contingent assets
Contingent assets are possible assets whose existence will be confirmed by the occurrence or non-occurrence of uncertain future events that are not wholly within the control of the entity. Contingent assets are not recognised, but they are disclosed when it is more likely than not that an inflow of benefits will occur. However, when the inflow of benefits is virtually certain an asset is recognised in the statement of financial position, because that asset is no longer considered to be contingent.
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26.1 CONTINGENT LIABILITY FOR OCCUPATIONAL LUNG DISEASES
On May 3, 2018, former mineworkers and dependents of deceased mineworkers (“Applicants”) and Anglo American South Africa Limited, AngloGold Ashanti Limited, Sibanye Gold Limited, Harmony Gold Mining Company Limited, Gold Fields Limited, African Rainbow Minerals Limited and certain of their affiliates (“Settling Companies”) settled the class certification application in which the Applicants in each sought to certify class actions against gold mining houses cited therein on behalf of mineworkers who had worked for any of the particular respondents and who suffer from any occupational lung disease, including silicosis or tuberculosis.
The DRDGOLD Respondents, DRDGOLD Limited and East Rand Proprietary Mines Limited, are not a party to the settlement between the Applicants and Settling Companies and the settlement agreement is not binding on the DRDGOLD Respondents. The dispute, insofar as the class certification application and appeal thereof is concerned, still stands and has not terminated in light of the settlement agreement.
In terms of the class action, the DRDGOLD Respondents have lodged an appeal against certain aspects of the class action including, inter alia, the extension of the remedy entertained in the class action, and the inclusion of tuberculosis as a basis for liability("Appeal"). The Appeal record was finalised and the allocation of a date for the hearing of the Appeal was scheduled for November 11, 2022. The hearing of the Appeal was held in the Supreme Court of Appeal and judgment was handed-down for the matter to be struck off the roll.
DRDGOLD maintains the view that it is too early to consider settlement of the matter, mainly for the following reasons:
• the Applicants have as yet not issued and served a summons (claim) in the matter;
• there is no indication of the number of potential claimants that may join the class action against the DRDGOLD Respondents;
• many principles upon which legal responsibility is founded, are required to be substantially developed by the trial court (and possibly subsequent courts of appeal) to establish liability on the bases alleged by the Applicants.
In light of the above there is inadequate information to determine if a sufficient legal and factual basis exists to establish liability, and to quantify such potential liability.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
26 CONTINGENCIES continued
26.2 CONTINGENT LIABILITY FOR ENVIRONMENTAL REHABILITATION
Mine residue deposits may have a potential pollution impact on ground water through seepage. The Group has taken certain preventative actions as well as remedial actions in an attempt to minimise the Group’s exposure and environmental impact.
The flooding of the western and central basins has the potential to cause pollution due to Acid Mine Drainage (“AMD”) contaminating the ground water. The government has appointed Trans-Caledon Tunnel Authority (“TCTA”) to construct a pump station and partial treatment plant to treat and discharge the water and maintain the AMD below the Environmental Critical level ("ECL") to prevent ground water contamination. TCTA completed the construction of the neutralisation plant for the Central Basin and commenced treatment during July 2014. As part of the heads of agreement signed in December 2012 between EMO, Ergo, ERPM and TCTA, sludge emanating from this plant since August 2014 has been co-disposed onto the Brakpan/Withok Tailings Storage facility. Partially treated water has been discharged by TCTA into the Elsburg Spruit.
This agreement includes the granting of access to the underground water basin through one of ERPM’s shafts and the rental of a site onto which it constructed its neutralisation plant. In exchange, Ergo and its associate companies including ERPM have a set off against any future directives to make any contribution toward costs or capital of up to R250 million. Through this agreement, Ergo also secured the right to purchase up to 30ML of partially treated AMD from TCTA at cost, to reduce Ergo’s reliance on potable water for mining and processing purposes.
While the heads of agreement should not be seen as an unqualified endorsement of the state’s AMD solution, and do not affect our right to either challenge future directives or to implement our own initiatives should it become necessary, it is an encouraging development.
In view of the limitation of current information for the accurate estimation of a potential liability, no reliable estimate can be made for the possible obligation.
During the 2022 financial year, a report was produced regarding the extent of ground water seepage from the Brakpan/Withok tailings storage facility by an expert. The report suggests that scavenger boreholes be constructed around the dam to deal with the seepage. The majority of the scavenger boreholes have been constructed and are currently operational and the results are continuously being monitored. Management is currently investigating a sustainable solution to deal with the seepage post the closure of the mine and therefore no reliable estimate can be made for the post closure liability.
26.3 CONTINGENCIES REGARDING EKURHULENI METROPOLITAN MUNICIPALITY ELECTRICITY TARIFF DISPUTE
Refer note 24 PAYMENTS MADE UNDER PROTEST for a full description of the matter.
Contingent liabilities
The Municipality has issued two summonses ("Municipal Summonses") for the recovery of arrears it alleges it is owed amounting to R74.0 million and R31.6 million, respectively. The Group supported by the external legal team is confident that there is a high probability that Ergo will be successful in defending the Municipal Summonses. Therefore, there is no present obligation as a result of a past event to pay the amounts claimed by the Municipality.
Contingent assets
Ergo instituted a counterclaim against the Municipality for the recovery of the surcharges which were erroneously paid to the Municipality in the bona fide belief that they were due and payable prior to the Main Application of approximately R43.0 million (these surcharges were expensed for accounting purposes).
26.4 CONTINGENT LIABILITY FOR THE SUMMONS RECEIVED FROM BENONI GOLD MINE ("BGM")
On May 18, 2024, Ergo received a summons ("BGM Summons") from BGM, a contractor with which it concluded in May 2018, a land lease and load and haulage agreement ("Agreement"). The BGM Summons initiates two contractual damages claims against Ergo. The first being for R37.1 million for the alleged breach of Ergo’s duties of good faith and breach of BGM’s haulage rights under the Agreement and the second for three alleged repudiations by Ergo of the Agreement, for which damages of R53.3 million are being sought by BGM. On July 24, 2024, Ergo filed its plea on the particulars of its defence on the matter. Pleadings have closed and both parties are preparing for discovery in order to prepare for trial and for Ergo to vehemently defend its position on the allegations made by BGM.
27 FINANCIAL INSTRUMENTS
CLASSIFICATION AND MEASUREMENT OF FINANCIAL ASSETS
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in business model.
A financial asset shall be measured at amortised cost if both the following conditions are met:
•the financial asset is held in a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
•the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
An investment is measured at fair value through other comprehensive income if it meets both of the following conditions and is not designated as at fair value through profit or loss:
•it is held with a business model whose objective achieved by both collecting contractual cash flows and selling financial assets; and
•its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
27 FINANCIAL INSTRUMENTS continued
FINANCIAL RISK MANAGEMENT FRAMEWORK
Overview
The Group has exposure to credit risk, liquidity risks, as well as other market risks from its use of financial instruments. This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives and policies and processes for measuring and managing risk. The Group’s management of capital is disclosed in note 20. This note must be read with the quantitative disclosures included throughout these consolidated financial statements.
The board of directors (“Board”) has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Risk Committee (“RC”) which is responsible for developing and monitoring the Group’s risk management policies. The committee reports regularly to the Board on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes to market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The RC oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The RC is assisted in its oversight role by the internal audit function. The internal audit function undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the RC.
CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s trade and other receivables.
The Group’s financial instruments do not represent a concentration of credit risk due to the exposure to credit risk being managed as disclosed in the following notes:
NOTE 12 INVESTMENTS IN REHABILITATION AND OTHER FUNDS
NOTE 13 CASH AND CASH EQUIVALENTS
NOTE 15 TRADE AND OTHER RECEIVABLES
MARKET RISK
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates, interest rates and equity prices will affect the consolidated profit or loss or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns.
Commodity price risk
Additional disclosures are included in the following note:
NOTE 4 REVENUE
Other market risk
Additional disclosures are included in the following note:
NOTE 25 OTHER INVESTMENTS
Interest rate risk
Fluctuations in interest rates impact on the value of short-term cash investments and financing activities, giving rise to interest rate risk. In the ordinary course of business, the Group receives cash from its operations and is obliged to fund working capital and capital expenditure requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve maximum returns while minimising risks. Lower interest rates result in lower returns on investments and deposits and also may have the effect of making it less expensive to borrow funds. Conversely, higher interest rates result in higher interest payments on loans and overdrafts.
Additional disclosures are included in the following notes:
NOTE 12 INVESTMENTS IN REHABILITATION AND OTHER FUNDS
NOTE 13 CASH AND CASH EQUIVALENTS
Foreign currency risk
The Group enters into transactions denominated in foreign currencies, such as gold sales denominated in US dollar, in the ordinary course of business The Group holds cash denominated in a foreign currency. This exposes the Group to fluctuations in foreign currency exchange rates.
Additional disclosures are included in the following notes:
NOTE 4 REVENUE
NOTE 13 CASH AND CASH EQUIVALENTS
NOTE 15 TRADE AND OTHER RECEIVABLES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
for the year ended June 30, 2024
27 FINANCIAL INSTRUMENTS continued
LIQUIDITY RISK
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
Additional disclosures are included in the following note:
NOTE 10.2 LEASE LIABILITIES
NOTE 16 TRADE AND OTHER PAYABLES
NOTE 20 CAPITAL MANAGEMENT
28 RELATED PARTIES
Disclosures are included in the following notes:
NOTE 5.1 COST OF SALES
NOTE 5.3 ADMINISTRATION EXPENSES AND OTHER COSTS
NOTE 16 TRADE AND OTHER PAYABLES
NOTE 19.2 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
NOTE 21 EQUITY
NOTE 22 INTEREST IN SUBSIDIARIESS
29 SUBSEQUENT EVENTS
There were no significant subsequent events between the year-end reporting date of 30 June 2024 and the date of issue of these financial statements other than described below and included in the preceding notes to the consolidated financial statements.
Declaration of dividend
On August 21, 2024, the Board declared a final dividend for the year ended 30 June 2024 of 20 SA cents per qualifying share amounting to R172.3 million, which was paid on September 16, 2024.
RCF entered into
Refer to note 20 CAPITAL MANAGEMENT for a description of the RCF entered into.
Conditional shares granted
On 22 October 2024, 2,878,900 conditional shares were granted to qualifying employees under the current equity settled long-term incentive scheme. These are expected to vest on 22 October 2027. The number of conditional shares granted includes those granted to directors and prescribed officers as follows:
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Number of conditional shares |
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Executive directors |
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D J Pretorius |
404,342 |
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A J Davel |
215,259 |
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Prescribed officers |
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W J Schoeman |
215,259 |
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ITEM 19. EXHIBITS
The following exhibits are filed as a part of this Annual Report:
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1.1 |
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2.1 |
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2.3 |
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4.1 |
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4.2 |
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4.3 |
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4.4 |
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4.5 |
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4.6 |
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4.7 |
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4.8† |
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4.9 |
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4.10 |
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4.11 |
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8.1 |
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11.1 |
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12.1 |
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12.2 |
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13.1 |
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13.2 |
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96.1 |
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96.2 |
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97.1 |
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101.INS |
XBRL Instance Document |
101.SCH |
XBRL Taxonomy Extension Schema Document |
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document |
† Confidential treatment has been requested over certain parts of this exhibit. Portions of this exhibit have been redacted in compliance with Item 601(a)(6) and Item 601(b)(10) of Regulation S-K. Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to supplementally furnish copies of any omitted schedules to the SEC upon request.
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
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DRDGOLD LIMITED |
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By: |
/s/ D.J. Pretorius
D.J. Pretorius
Chief Executive Officer
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By:
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/s/ A.J. Davel
A.J. Davel
Chief Financial Officer
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Date: October 30, 2024 |
EX-2.3
2
exhibit23.htm
EX-2.3
Document
DESCRIPTION OF SECURITIES
REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
As of June 30, 2024, DRDGOLD Limited (the Company, DRDGOLD, we, us, and our) had the following securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the Exchange Act):
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| Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered |
| American Depositary Shares, each representing ten ordinary shares |
DRD |
New York Stock Exchange |
| Ordinary shares |
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New York Stock Exchange* |
* Not for trading, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.
Capitalised terms used but not defined herein have the meanings given to them in DRDGOLD’s annual report on Form 20-F for the fiscal year ended June 30, 2024.
Ordinary shares
Item 9.A.3 Pre-emptive rights
Issue of additional shares
In accordance with the provisions of the JSE Listings Requirements and the DRDGOLD MOI, the Board shall not have the power to issue authorised shares other than:
•the issue of capitalisation shares or the offer of a cash payment in lieu of awarding capitalisation shares; and
•issues which do not require the approval of shareholders in terms of the Companies Act or the JSE Listings Requirements.
In accordance with the provisions of the Companies Act:
•an issue of shares must be approved by a special resolution of the shareholders of a company if the shares are issued to (i) a director, future director, prescribed officer or future prescribed officer of the company; (ii) any other person related or inter-related to the company or a director or prescribed officer of the company; or (iii) a nominee of a person contemplated in (i) or (ii); and
•an issue of shares in a transaction, or series of integrated transactions, requires approval of the shareholders by special resolution if the voting power of the shares that are issued as a result of the transaction will be equal to or exceed 30 per cent. of the voting power of all the shares held by shareholders immediately before the transaction or series of transactions.
Issues for Cash
In accordance with the provisions of the JSE Listings Requirements and the DRDGOLD MOI, shareholders may either convey a:
•special authority to issue shares for cash on terms that are specifically approved by shareholders in a shareholders meeting in respect of a particular issue (Specific Issue for Cash); or
•general authority to issue shares for cash on terms generally approved by shareholders in a shareholders meeting by granting the Board the authority to issue a specified number of securities for cash, which authority will be valid until the next annual general meeting or for 15 months from the date on which the resolution was passed, whichever period is shorter (General Issue for Cash).
In terms of the JSE Listings Requirements, a company may only undertake:
•a Specific Issue for Cash or a General Issue for Cash on the basis that a 75 per cent. majority of votes cast by shareholders at a shareholders meeting must approve the granting of such authority to the directors;
•a General Issue for Cash is subject to satisfactory compliance with certain requirements, including:
◦the shares that are the subject of a General Issue for Cash may not exceed 5 per cent. of the company’s listed shares; and
◦the maximum discount at which shares may be issued is 10 per cent. of the weighted average traded price of such shares measured over the 30 business days prior to the date that the price of the issue is agreed between the company and the party subscribing for the shares.
Pre-emptive rights
The Companies Act, the JSE Listings Requirements and the DRDGOLD MOI require that any new issue of shares by DRDGOLD must first be offered to existing shareholders in proportion to their shareholding in the Company, unless, among other things:
•the necessary shareholder approvals have been obtained;
•a capitalisation issue, an issue for an acquisition of assets (including another company) or an amalgamation or merger is to be undertaken; or
•the shares are to be issued in terms of option or conversion rights.
Repurchase of Shares
DRDGOLD or any subsidiary of DRDGOLD may, if authorised by special resolution by way of a general approval, acquire ordinary shares in the capital of DRDGOLD in accordance with the Companies Act and the JSE Listings Requirements, provided among other things that:
•the number of its own ordinary shares acquired by DRDGOLD in any one financial year shall not exceed 10 per cent. of the ordinary shares in issue at the date on which this resolution is passed;
•this authority shall lapse on the earlier of the date of the next annual general meeting or the date 15 months after the date on which the special resolution is passed;
•the Board has resolved to authorise the acquisition and that the Group will satisfy the solvency and liquidity test immediately after the acquisition and that since the test was done there have been no material changes to the financial position of the Group;
•the price paid per ordinary share may not be greater than 10 per cent. above the weighted average of the market value of the ordinary shares for the five business days immediately preceding the date on which an acquisition is made; and
•the number of shares acquired by subsidiaries of DRDGOLD shall not exceed 10 per cent. in the aggregate of the number of issued shares in DRDGOLD.
Item 9.A.5 Type and class of securities
DRDGOLD’s ordinary shares are listed on securities exchange operated by the JSE Limited (JSE). As of June 30, 2024, the total number of issued ordinary shares was 864,588,711. DRDGOLD’s ordinary shares are issued in registered (dematerialised) form. In addition, some of DRDGOLD’s shareholders hold a limited number of the shares in certificated form.
The transfer of any DRDGOLD certificated shares must be implemented in accordance with the provisions of the Companies Act, using the then common form of transfer. Dematerialised shares, which have been traded on the JSE, are transferred on the STRATE system and delivered five business days after each trade. The transferor of any share is deemed to remain the holder of that share until the name of the transferee is entered in DRDGOLD’s register for that share. Since DRDGOLD shares are traded through STRATE, only shares that have been dematerialised may be traded on the JSE. Accordingly, DRDGOLD shareholders who hold shares in certificated form must dematerialise their shares in order to trade on the JSE.
Item 9.A.6 Limitations or qualifications
Not applicable.
Item 9.A.7 Other rights
Not applicable.
Item 10.B.3 Shareholder rights
Dividends and payments to shareholders
DRDGOLD may make distributions (including the payment of dividends) from time to time in accordance with provisions of the Companies Act, the JSE Listings Requirements and the DRDGOLD MOI. In terms of the Companies Act, a company may only make a distribution (including the payment of any dividend) if:
•it reasonably appears that the company will satisfy the solvency and liquidity test immediately after completing the proposed distribution; and
•the board of the company, by resolution, has acknowledged that it has applied the solvency and liquidity test and reasonably concluded that the company will satisfy the solvency and liquidity test immediately after completing the proposed distribution.
In terms of the Companies Act, a company satisfies the solvency and liquidity test at a particular time if, considering all reasonably foreseeable financial circumstances of the company at that time:
•the assets of the company, as fairly valued, equal or exceed the liabilities of the company, as fairly valued; and
•it appears that the company will be able to pay its debts as they become due in the ordinary course of business for a period of:
◦12 months after the date on which the test is considered; or
◦in the case of a distribution (including the payment of dividends), 12 months following that distribution.
Subject to the above requirements, the directors of DRDGOLD may from time to time declare a dividend or any other distribution to shareholders in proportion to the number of shares held by them.
The Company must hold all monies due to the shareholders in trust indefinitely, subject to the laws of prescription. The Company shall be entitled at any time to delegate its obligations in respect of unclaimed dividends, or other unclaimed distributions, to any one of the Company’s bankers.
Voting Rights
Every shareholder of DRDGOLD, or representative of a shareholder, who is present at a shareholders meeting has one vote on a show of hands, irrespective of the number of shares he or she holds or represents, provided that a representative of a shareholder shall, irrespective of the number of shareholders he or she represents, have only one vote. Every DRDGOLD shareholder is, on a poll, entitled to one vote per ordinary share held. Neither the Companies Act nor the DRDGOLD MOI provide for cumulative voting.
A shareholder entitled to attend and vote at a shareholders meeting shall be entitled to appoint a proxy to attend, participate in, speak and vote at such shareholders meeting in the place of such shareholder. The proxy need not be a shareholder. However, the proxy may delegate the authority granted to him or her as a proxy as set out in the Companies Act.
Rights to share in the company’s profits
See “Dividends and payments to shareholders”.
Rights to share in any surplus in the event of liquidation
In the event of a voluntary or compulsory liquidation, dissolution or winding-up, the assets remaining after payment of all the debts and liabilities of DRDGOLD, including the costs of liquidation, shall be dealt with by a liquidator who may, among other things, divide among the shareholders any part of the assets of DRDGOLD, and may vest any part of the assets of DRDGOLD as the liquidator deems fit in trust for the benefit of shareholders. The division of assets is not required to be done in accordance with the legal rights of shareholders of DRDGOLD. In particular, any class may be given preferential or special rights or may be partly or fully excluded.
Redemption provisions
Not applicable.
Sinking fund provisions
Not applicable.
Liability to further capital calls by the Company
Not applicable.
Any provision discriminating against any existing or prospective holder of the ordinary shares as a result of such shareholder owning a substantial number of shares
Not applicable.
Item 10.B.4. Changes to shareholder rights
Amendments to DRDGOLD’s MOI
The DRDGOLD shareholders may, by the passing of a special resolution in accordance with the provisions of the Companies Act and the DRDGOLD MOI, or in compliance with a court order, and subject to the approval of the JSE, amend the DRDGOLD MOI, including:
•the creation of any class of shares;
•the variation of any preferences, rights, limitations and other terms attaching to any class of shares;
•the conversion of one class of shares into one or more other classes;
•an increase in DRDGOLD’s authorised share capital;
•a consolidation of DRDGOLD’s equity securities;
•a sub-division of DRDGOLD’s equity securities; and/or
•the change of DRDGOLD’s name.
Variation of Rights
All or any of the rights, privileges or conditions attached to DRDGOLD’s ordinary shares may be varied by a special resolution of DRDGOLD passed in accordance with the provisions of the Companies Act and the DRDGOLD MOI.
Item 10.B.6 Limitations
There are no limitations imposed by South African law or by the DRDGOLD MOI on the rights of non-South African shareholders to hold or vote DRDGOLD’s ordinary shares.
Item 10.B.7 Change in control
The DRDGOLD MOI does not contain any provisions that would have the effect of delaying, deferring or preventing a change in control of the company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the company (or any of its subsidiaries).
Item 10.B.8 Disclosure of shareholdings
The Companies Act requires a registered holder of DRDGOLD shares who is not the beneficial owner of such shares to disclose to DRDGOLD, within five business days of the end of every month during which a change has occurred in the beneficial ownership, the identity of the beneficial owner and the number and class of securities held on behalf of the beneficial owner. Moreover, DRDGOLD may, by notice in writing, require a person who is a registered shareholder, or whom DRDGOLD knows or has reasonable cause to believe has a beneficial interest in DRDGOLD ordinary shares, to confirm or deny whether or not such person holds the ordinary shares or beneficial interest and, if the ordinary shares are held for another person, to disclose to DRDGOLD the identity of the person on whose behalf the ordinary shares are held. DRDGOLD may also require the person to give particulars of the extent of the beneficial interest held during the three years preceding the date of the notice. DRDGOLD is obliged to establish and maintain a register of the disclosures described above in accordance with the Companies Act and to publish in its annual financial statements a list of the persons who hold a beneficial interest equal to or in excess of 5 per cent. of the total number of ordinary shares issued by DRDGOLD, together with the extent of those beneficial interests.
Item 10.B.9 Differences in the law
With respect to Items 10.B.2-10.B.8, there are no significant differences between the South African law and U.S. federal law.
American Depositary Shares (12.D.1 and 12.D.2)
Deposit Agreement
DRDGOLD has an American Depositary Receipt facility. In connection with this facility, DRDGOLD is party to a Deposit Agreement, dated as of August 12, 1996, as amended and restated as of July 23, 2007, among DRDGOLD, The Bank of New York (The Bank of New York Mellon, or BNYM), as Depositary, and all owners and holders from time to time of American Depositary Receipts issued thereunder.
This summary is subject to and qualified in its entirety by reference to the Deposit Agreement, including the form of ADRs attached thereto. Terms used in this section and not otherwise defined will have the meanings set forth in the Deposit Agreement. Copies of the Deposit Agreement are available for inspection at the Corporate Trust Office of the Depositary, located at 240 Greenwich Street, New York, New York 10286. The Depositary’s principal executive office is also located at 240 Greenwich Street, New York, New York 10286.
American Depositary Shares
An ADR is a receipt evidencing a specific number of American Depositary Shares (ADSs). Each DRDGOLD ADS represents ownership interests in ten DRDGOLD ordinary shares and the rights attributable to ten DRDGOLD ordinary shares that DRDGOLD will deposit with one of the custodians, which currently are ABSA Bank Ltd., Standard Bank of South Africa, French Bank of South Africa, First National Bank of South Africa and Nedcor Bank Limited. Each DRDGOLD ADS also represents securities, cash or other property deposited with BNYM but not distributed to holders of DRDGOLD ADSs.
As BNYM will actually be the holder of the underlying ordinary shares, DRDGOLD will not treat you as one of its shareholders. As a holder of ADSs, you will have ADS holder rights. A Deposit Agreement among DRDGOLD, BNYM and you, as a DRDGOLD ADS holder, sets out the ADR holders’ rights and obligations of BNYM, as depositary. New York state law governs the Deposit Agreement and the ADRs evidencing the DRDGOLD ADSs.
You may hold ADRs either directly or indirectly through your broker or financial institution. If you hold ADRs directly, you are an ADR holder. This description assumes you hold your ADRs directly. If you hold the ADRs indirectly, you must rely on the procedures of your broker or financial institution to assert the rights of ADR holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.
Share Dividends and Other Distributions
How will you receive dividends and other distributions on the ordinary shares?
BNYM will pay to you the cash dividends or other distributions it or the custodian receives on the ordinary shares or other deposited securities, after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your DRDGOLD ADSs represent.
Cash
BNYM will convert any cash dividend or distribution DRDGOLD pays on the ordinary shares, other than any dividend or distribution paid in U.S. dollars, into U.S. dollars. If that is not possible on a reasonable basis, or if any approval from any government is needed and cannot be obtained, the Deposit Agreement allows BNYM to distribute the foreign currency only to those ADS holders to whom it is possible to do so or to hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.
Before making a distribution, BNYM will deduct any withholding taxes that must be paid under applicable laws. It will distribute only whole U.S. dollars and U.S. cents and will round any fractional amounts to the nearest whole cent. If the exchange rates fluctuate during a time when BNYM cannot convert the foreign currency, you may lose some or all of the value of the distribution.
Ordinary shares
BNYM will distribute new ADRs representing any ordinary shares DRDGOLD distributes as a dividend or free distribution, if DRDGOLD requests that BNYM make this distribution and if DRDGOLD furnishes BNYM promptly with satisfactory evidence that it is legal to do so. BNYM will only distribute whole ADRs. It will sell ordinary shares, which would require it to issue a fractional ADS and distribute the net proceeds to the holders entitled to those ordinary shares. If BNYM does not distribute additional cash or ADSs, each ADS will also represent the new ordinary shares.
Right to purchase additional ordinary shares
If DRDGOLD offers holders of securities any rights, including rights to subscribe for additional ordinary shares, BNYM may take actions necessary to make these rights available to you. DRDGOLD must first
instruct BNYM to do so and furnish it with satisfactory evidence that it is legal to do so. If DRDGOLD does not furnish this evidence and/or give these instructions, and BNYM determines that it is practical to sell the rights, BNYM may sell the rights and allocate the net proceeds to holders’ accounts. BNYM may allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.
If BNYM makes rights available to you, upon instruction from you it will exercise the rights and purchase the ordinary shares on your behalf. BNYM will then deposit the ordinary shares and deliver ADSs to you. It will only exercise rights if you pay BNYM the exercise price and any charges the rights require you to pay. U.S. securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after exercise of rights. BNYM will not offer you rights unless those rights and the securities to which the rights relate are either exempt from registration or have been registered under the Securities Act with respect to a distribution to you.
Other distributions
BNYM will send to you anything else DRDGOLD distributes on deposited securities by any means BNYM thinks is legal, fair and practical. If it cannot make the distribution in that way, BNYM may decide to sell what DRDGOLD distributed—for example by public or private sale—and distribute the net proceeds, in the same way as it does with cash, or it may decide to hold what DRDGOLD distributed, in which case the ADSs will also represent the newly distributed property.
BNYM is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADR holder. DRDGOLD will have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to ADS holders. This means that you may not receive the distribution DRDGOLD makes on its ordinary shares or any value for them if it is illegal or impractical for DRDGOLD to make them available to you.
Deposit, Withdrawal and Cancellation
How does the Depositary issue ADSs?
BNYM will deliver the ADSs that you are entitled to receive in the offer against deposit of the underlying ordinary shares. BNYM will deliver additional ADSs if you or your broker deposit ordinary shares with the custodian. You must also deliver evidence satisfactory to BNYM of any necessary approvals of the governmental agency in South Africa, if any, which is responsible for regulating currency exchange at that time. If required by BNYM, you must in addition deliver an agreement transferring your rights as a shareholder to receive dividends or other property. Upon payment of its fees and of any taxes or charges, BNYM will register the appropriate number of ADSs in the names you request and will deliver the ADRs at its Corporate Trust Office to the persons you request.
How do ADS holders cancel an ADS and obtain ordinary shares?
You may submit a written request to withdraw ordinary shares and turn in your ADRs evidencing your ADSs at the Corporate Trust Office of BNYM. Upon payment of its fees and of any taxes or charges, such as stamp taxes or stock transfer taxes, BNYM will deliver the deposited securities underlying the ADSs to an account designated by you at the office of the custodian. At your request, risk and expense, BNYM may deliver at its Corporate Trust Office any dividends or distributions with respect to the deposited securities represented by the ADSs, or any proceeds from the sale of any dividends, distributions or rights, which may be held by BNYM.
Record Dates
Whenever any distribution of cash or rights, change in the number of ordinary shares represented by ADSs or notice of a meeting of holders of ordinary shares or ADSs is made, BNYM will fix a record date for the determination of the owners entitled to receive the benefits, rights or notice.
Voting of Deposited Securities
How do you vote?
If you are an ADS holder on a record date fixed by BNYM, you may exercise the voting rights of the same class of securities as the ordinary shares represented by your ADSs, but only if DRDGOLD asks BNYM to ask for your instructions. Otherwise, you will not be able to exercise your right to vote unless you withdraw the ordinary shares.
However, you may not know about the meeting enough in advance to withdraw the ordinary shares. If DRDGOLD asks for your instructions, BNYM will notify you of the upcoming meeting and arrange to deliver certain materials to you. The materials will (1) include all information included with the meeting notice sent by DRDGOLD to BNYM, (2) explain how you may instruct BNYM to vote the ordinary shares or other deposited securities underlying your ADSs as you direct, if you vote by mail or by proxy and (3) include a voting instruction card and any other information required under South African law that DRDGOLD and BNYM will prepare. For instructions to be valid, BNYM must receive them on or before the date specified in the instructions. BNYM will try, to the extent practical, subject to applicable law and the provisions of the Articles of Association of DRDGOLD, to vote or have its agents vote the underlying shares as you instruct. BNYM will only vote, or attempt to vote, as you instruct. However, if BNYM does not receive your voting instructions, it will give a proxy to vote your ordinary shares to a designated representative of DRDGOLD, unless DRDGOLD informs BNYM that either: (1) it does not want the proxy issued, (2) substantial opposition exists or (3) the matter materially and adversely affects the rights of holders of ordinary shares.
DRDGOLD cannot assure that you will receive the voting materials in time to ensure that you can instruct BNYM to vote your ordinary shares. In addition, BNYM and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do if your ordinary shares are not voted as you requested.
Inspection of Transfer Books
BNYM will keep books for the registration and transfer of ADRs. These books will be open at all reasonable times for inspection by you, provided that you are inspecting the books for a purpose related to DRDGOLD or the Deposit Agreement or the ADRs.
Reports and Other Communications
BNYM will make available for your inspection at its Corporate Trust Office any reports or communications, including any proxy material, received from DRDGOLD, as long as these materials are received by BNYM as the holder of the deposited securities and generally available to DRDGOLD shareholders. At DRDGOLD’s written request, BNYM will also send copies of reports, notices and communications to you.
Reclassifications, Recapitalisations and Mergers
If DRDGOLD:
•changes the nominal or par value of any of the DRDGOLD ordinary shares;
•reclassifies, splits or consolidates any of the DRDGOLD ordinary shares;
•distributes securities on any of the DRDGOLD ordinary shares that are not distributed to you; or
•recapitalises, reorganises, merges, consolidates, sells its assets, or takes any similar action, then:
the cash, ordinary shares or other securities received by BNYM will become new deposited securities under the Deposit Agreement, and each DRDGOLD ADS will automatically represent the right to receive a proportional interest in the new deposited securities; and BNYM may and will, if DRDGOLD asks it to,
distribute some or all of the cash, ordinary shares or other securities it received. It may also issue new DRDGOLD ADSs or ask you to surrender your outstanding DRDGOLD ADSs in exchange for new DRDGOLD ADSs identifying the new deposited securities.
Amendment and Termination of the Deposit Agreement
How may the Deposit Agreement be amended?
DRDGOLD may agree with BNYM to amend the Deposit Agreement and the DRDGOLD ADRs without your consent for any reason. If the amendment adds or increases fees or charges, except for taxes and governmental charges, or prejudices an important right of DRDGOLD ADS holders, it will only become effective 30 days after BNYM notifies you of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the agreement as amended. However, no amendment will impair your right to receive the deposited securities in exchange for your DRDGOLD ADSs.
How may the Deposit Agreement be terminated?
BNYM will terminate the Deposit Agreement if DRDGOLD asks it to do so, in which case it must notify you at least 90 days before termination.
BNYM may also terminate the agreement after notifying you if BNYM informs DRDGOLD that it would like to resign and DRDGOLD does not appoint a new depositary bank within 90 days.
If any DRDGOLD ADSs remain outstanding after termination, BNYM will stop registering the transfer of DRDGOLD ADSs, will stop distributing dividends to DRDGOLD ADS holders, and will not give any further notices or do anything else under the Deposit Agreement other than:
•collect dividends and distributions on the deposited securities;
•sell rights and other property offered to holders of deposited securities; and
•deliver ordinary shares and other deposited securities upon cancellation of DRDGOLD ADSs.
At any time after one year after termination of the Deposit Agreement, BNYM may sell any remaining deposited securities by public or private sale. After that, BNYM will hold the money it received on the sale, as well as any cash it is holding under the Deposit Agreement, for the pro rata benefit of the DRDGOLD ADS holders that have not surrendered their DRDGOLD ADSs. It will not invest the money and has no liability for interest. BNYM’s only obligations will be to account for the money and cash. After termination, DRDGOLD’s only obligations will be with respect to indemnification of, and to pay specified amounts to, BNYM.
Your Right to Receive the Ordinary Shares Underlying Your DRDGOLD ADSs
You have the right to cancel your DRDGOLD ADSs and withdraw the underlying ordinary shares at any time except:
•due to temporary delays caused by BNYM or DRDGOLD closing its transfer books, the transfer of ordinary shares being blocked in connection with voting at a shareholders meeting, or DRDGOLD paying dividends;
•when you or other ADS holders seeking to withdraw ordinary shares owe money to pay fees, taxes and similar charges; or
•when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to DRDGOLD ADSs or to the withdrawal of ordinary shares or other deposited securities.
This right of withdrawal may not be limited by any provision of the Deposit Agreement.
Limitations on Obligations and Liability to DRDGOLD ADS Holders
The Deposit Agreement expressly limits the obligations of DRDGOLD and BNYM. It also limits the liability of DRDGOLD and BNYM. DRDGOLD and BNYM:
•are only obliged to take the actions specifically set forth in the Deposit Agreement without negligence or bad faith;
•are not liable if either of them is prevented or delayed by law, any provision of the DRDGOLD Articles of Association or circumstances beyond their control from performing their obligations under the agreement;
•are not liable if either of them exercises, or fails to exercise, discretion permitted under the agreement;
•have no obligation to become involved in a lawsuit or proceeding related to the ADSs or the Deposit Agreement on your behalf or on behalf of any other party unless they are indemnified to their satisfaction; and
•may rely upon any advice of or information from any legal counsel, accountants, any person depositing ordinary shares, any DRDGOLD ADS holder or any other person whom they believe in good faith is competent to give them that advice or information.
In the Deposit Agreement, DRDGOLD and BNYM agree to indemnify each other under specified circumstances.
Requirements for Depositary Actions
Before BNYM will deliver or register the transfer of a DRDGOLD ADS, make a distribution on a DRDGOLD ADS, or permit withdrawal of ordinary shares, BNYM may require:
•payment of taxes, including stock transfer taxes or other governmental charges, and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities, as well as the fees and expenses of BNYM;
•production of satisfactory proof of the identity of the person presenting ordinary shares for deposit or DRDGOLD ADSs upon withdrawal, and of the genuineness of any signature; and
•compliance with regulations BNYM may establish consistent with the Deposit Agreement, including presentation of transfer documents.
BNYM may refuse to deliver, transfer, or register transfer of DRDGOLD ADSs generally when the transfer books of BNYM are closed or at any time if BNYM or DRDGOLD thinks it advisable to do so.
Governing Law
The Deposit Agreement is governed by the law of the State of New York.
EX-4.8
3
exhibit48_rtsf.htm
EX-4.8
exhibit48_rtsf
Exhibit 4.8
Contract No.: PDRDTSF-3-1 00-CD-0001 ORD f.-,R.WtsTc.ot.OIUCOVf:RIU CONTRACT INDEX PAGE NO. CONTRACT AGREEMENT .................................................................................................................................. A1 LETTER OF TENDER .......................................................................................................................................... B1 CONDITIONS OF CONTRACT ............................................................................................................................ C1 SPECIFICATIONS ............................................................................................................................................... D1 SCHEDULES: SCHEDULE 1 - PREAMBLE TO THE BILL OF QUANTITIES ............................................................................ E1 SCHEDULE 2 - BILL OF QUANTITIES .[REDACTED]........................................................................................ F1 SCHEDULE 3- DAYWORKS ....... ...................................................................................................................... G1 SCHEDULE 4- FOREIGN CURRENCY DETAILS ............................................................................................. H1 SCHEDULE 5- TABLE OF ADJUSTMENT DATA ....... ....................................................................................... 11 SCHEDULE 6- TRANSGRESSION PENAL TIES MATRIX ................................................................................. J1 SCHEDULE 7 - MATERIAL ON SITE ................................................................................................................ K1 SCHEDULE 8 - LINER WASTAGE PENAL TIES ............................................................................................... L 1 SCHEDULE 9- MATERIALS MARK-UP SLIDING SCALE ....... ....................................................................... M1 ADDENDAS: ADDENDA 1 - SITE INSPECTION CERTIFICATE ............................................................................................. N1 ADDENDA 2 - DRAWINGS ....... ......................................................................................................................... 01 ADDENDA 3 - PROFORMA DOCUMENTS ....... ................................................................................................ P1 ADDENDA 4 - EMPLOYER'S DOCUMENTS ..................................................................................................... Q1 ADDENDA 5- PROGRAMME ....... ..................................................................................................................... R1 ADDENDA 6 - GEOTECH REPORT.[REDACTED]. ............................................................................................. S1 ADDENDA 7 - DRAFT CQA .[REDACTED]. ......................................................................................................... T1 ADDENDA 8 - TECHNICAL INFORMATION .[REDACTED]. ............................................................................... U1 ADDENDA 9 - ENVIRONMENTAL INFORMATION .[REDACTED ...................................................................... V1
Protec Park, Chloorkop 30th May 24 /s/ Craig Bowles Craig Bowles Contracts Director /s/ Pieter Arnoldus Albertyn Pieter Arnoldus Albertyn /s/ Deborah Andrea Kannemeyer Deborah Andrea Kannemeyer
Carletonville 4th June 24 /s/ Kevin Peter Kruger Kevin Peter Kruger Managing Director /s/ Christopher Philip Louis Albertus Christopher Philip Louis Albertus /s/ Jaco Johan Grobbelaar Jaco Johan Grobbelaar
Contract No· PDRDTSF-3-100-0001 ORD ,.,.ffltuca,.auui- APPENDIX TO TENDER ITEM DESCRIPTION SUB- CLAUSE NO. ENTRY OF INFORMATION Far West Gold Recoveries (Ply) Ltd Constantia Office Park Employer's name and address 1.1.2.2 & 1.3 Cnr 14th Avenue and Hendrik Potgieter Road Cycad House, Building 17, Ground Floor Weltevreden Park 1709 Stefanutti Stocks Inland, a division of Stefanutti Stocks (Ply) Ltd Protec Park Contractor's name and address 1.1.2.3 & 1.3 Cnr Zuurfontein Avenue and Oranjerivier Drive Chloorkop Kempton Park 1619 Kevin Kruger Engineer's name and address 1.1.2.4 & 1.3 Driefontein Plant 2 Carletonville 2499 Pursuant to the provisions of Sub-Clause 3.2 [Delegation by the Engineer] of the Conditions of Contract the Engineer hereby assigns all Delegation by Engineer 3.2 his duties and delegates all his authority under and in terms of the Contract, including the authority to determine any matter in accordance with Sub-Clause 3.5 [Determinations] of the General Conditions of Contract to the person named in the Appendix. Base date: 1.1.3.1 01 April 2024. In accordance with proposed project execution programme: Time for Completion of the Works: 1.1.3.3 1021 Days Defects Notification Period 1.1.3.7 12 (Twelve) calendar months. Sections of the Works 1.1.5.6 Section 1: Description: Beneficial Occupation (600kUm) Time for Completion: 792 days Delay Damages: 1% per week of R[REDACTED] The delay damages will only become effective one month after the Time for Completion for the Section has elapsed. Project 1.1.6.12 DRDGOLD FWGR RTSF Project Located near Fochville, Gauteng Electronic Transmission Systems 1.3 Electronic ( e) mail in which case the date of receipt is defined as the date and time on which such email was transmitted: Contractor: Craig. Bowles@stefstocks.com Engineer: Kevin.Kruger@drdgold.com Engineer's Representatives: Gds@geotail.co.za Andre@tailings.co.za Hugo@profectionqs.co.za Governing Law 1.4 Laws of the Republic of South Africa Ruling language 1.4 English Language for communications 1.4 English Time for Access to the Site 2.1 In accordance with the proposed project execution programme: - 02 May 2024. Guillaume de Sward! Engineer's Representatives 3.2 Andre Richardt Hugo Hayes Page I BI
Contract No · PDRDTSF-3-100-0001 ORD ,.,.ffltuca,.auui- APPENDIX TO TENDER ITEM DESCRIPTION SUB- CLAUSE NO. ENTRY OF INFORMATION Amount of Performance Security 4.2 10% (Ten percent) of the Accepted Contract Amount excluding VAT. Progress Reports 4.2 1 A non-refundable amount of R [REDACTED] will be deducted from the value of the Payment Certificate as a penalty for a substantial non-compliance by the Contractor with the reporting obligations in Sub-Clause 4.2 1. Normal working hours will be: - a 9-hour shift and 6 day week with a long weekend at month end for dayshift operations. and Normal Working Hours 6.5 - 2 no x 9-hour shifts and 6 day week with a long weekend at month end for the dozing and loading of topsoil and overburden to stockpile. These shifts would typically be from 4:00 to 13 00 and 14:00 to 2 3:00. Commencement Date 8.1 In accordance with the proposed execution programme: 02 May 2 02 4. 1/7% (One seventh percent) of the remainder of the Contract Price Delay damages for the Works 8.7 & 14.15(b) excluding Section 1 for each day during which the Works or Sections thereof. remain incomplete after the due Time for Completion for the whole of the Works or Sections. Maximum amount of delay damages 8.7 10% (Ten percent) of the Contract Price excluding VAT. Percentage for adjustment of Provisional Sums 135(b) 15% Refer to Sub-Clause 13.8 [Adjustment for Changes in Cost] of the Adjustments for changes in Cost 13.8 Particular Conditions of Contract and Table of adjustment Data. 5% of the Accepted Contract Amount paid within 30 days of the Contractor providing a suitable Advance Payment Guarantee. Advance payment 14.2 repayments shall commence once the certified value of the Works (excluding the advance) exceeds 30% and shall be repaid in 8 equal installments. Currencies and proportions 14.2 South African Rand. Start repayment of Advance Payment 14.2 (a) When payments are..lillL_% of the Accepted Contract Amount Less Provisional Sums. Percentage reduction per Payment Certificates for 14.2 (b) ---1:illL_ % repayment of Advance Payment Application for Interim Payment 14.3 2oth day of each Certificate month. Percentage of retention 14.3 Retention guarantee of 5% (Five percent) of Contract Price, reduced to 2 .5 % (Two and a half percent) after the Taking Over Certificate has been issued. An additional R[REDACTED] shall be retained until all Contractor's Documentation as defined in Sub-Clause 1.1.6.1 and referred to in Sub-Clause 4.1 [Contractor's General Obligations] of the Conditions of Contract and clause 2 2 .1.9 [Retention on Documentation] of the Specifications, have been delivered and approved by the Engineer. Failure to provide replacement retention guarantee if required upon request for extention of the guarantee, shall result in actual retention money being deducted from the payment certificate. The Contractor will thereafter not be allowed to provide a replacement retention guarantee. Limit of retention money 14.3 5% (Five percent) of Contract Price and, if specified in the Specifications, an additional R[REDACTED] which shall be retained until such as built documentation as may be required under the Specifications have been delivered and approved by the Engineer. Plant and Materials for payment when Shipped en route to the 145(b) Not Applicable Site Plant and Materials for payment when delivered to the Site 14.5(c) Refer to Schedule 7 - MOS Minimum amount of interim Payment Certificates 14.6 [REDACTED] Time for Payment 14.7 30 (Thirty) Days after the Engineer issues the Interim Payment Certificate. Page I B 2
Contract No· PDRDTSF-3-100-0001 ORD ,.,.ffltuca,.auui- APPENDIX TO TENDER ITEM DESCRIPTION SUB- CLAUSE NO. ENTRY OF INFORMATION Currency/currencies of payment 14.2 South African Rand (ZAR) Periods for submission of Insurance: (a) evidence of insurance 18.1 (a) (a) 14 Days Employer's Relevant policies: 18.1 (b) Construction All Risks (including Sasria) covering physical loss or damage to the Works Public Liability covering legal liability to third parties for property damage, death injury, illness arising out of the Works The Contractor will be responsible / liable for the payment of the policy deductible at an estimated maximum amount of R[[REDACTED] for all events, applicable to the Construction All Risks policy, subject to the terms received from the insurer as well as contract negotiations. The Tenderer must indicate the amount allowed for the deductible separately in the P&G section for the contractual requirements. Where there is a shared liability, the loss shall be bared by each party to the proportion to each party's liability. Contractor's Relevant policies: The Employer's interests will be noted on insurances to be taken out by Contractor Contractor's Documents, Materials, Plant and Contractor's 18.1 (b) Minimum Insurance Requirement: New Replacement Value Equipment Motor Insurance (Contractor vehicles) 18.1 (b) Minimum Insurance Requirement: Own I Hired Vehicles: Retail Value Third Party Liability: R[REDACTED] Marine (Imports/Inland Transit) covering all goods, equipment and materials at premises other than site and/or whilst in transit from place of manufacture/supply until delivery on site, subject to any INCOTERMS Sasria ( covering damage to above assets, vehicles, 18.1 (b) Minimum Insurance Requirement: New Replacement Value equipment, goods, materials and the like arising from riot, strike and civil commotion/unrest) Fire, Perils, Theft & Sasria cover in respect of any contractor performing manufacturing, fabrication and/or assembling work at their own premises prior to delivery to site, where advanced payments are made by the Employer for such work. Public Liability- death/injury to Third Party persons; Minimum Insurance Requirement: R[REDACTED] loss/damage to Third Party property arising other than in 18.1 (b) connection with the specific Works Professional Indemnity Insurance (for loss/damage arising 18.1 (b) Not Required from Contractor's defective design) Compensation for Occupational Injuries and Diseases Act, 18.1 (b) Minimum Insurance Requirement: Statutory Requirements 130 of 1993 and Regulations ( or local statutory equivalent) The Parties agree that the Adjudicator shall be Kevin Trisk or if he is Appointment of the Dispute Adjudication Board 20.2 not available, then Patrick Lane. The adjudicator shall be appointed on an ad hoc basis. Appointment (if not agreed) to be made by 20.3 The Chairman of the Association of Arbitrators of Southern Africa ( or his nominee) Page I B 3
EX-4.9
4
exhibit49_gbf.htm
EX-4.9
exhibit49_gbf
27 June 2024 Nedbank 135 Rivonia Campus 135 Rivonia Road Sandown Sandton 2196 | PO Box 1144 Johannesburg 2000 South Africa T +27 11 294 4444 | F +27 11 295 1111 | E cib@nedbank.co.za | W nedbank.co.za/cib Directors: AD Mminele (Chairperson) JP Quinn (Chief Executive) HR Brody (Lead Independent Director) BA Dames MH Davis (Chief Financial Officer) NP Dongwana EM Kruger P Langeni RAG Leith L Makalima MC Nkuhlu (Chief Operating Officer) Dr TM Nombembe S Subramoney Company Secretary: J Katzin 31.05.2024 Nedbank Corporate and Investment Banking is a division of Nedbank Limited Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16). LEGAL-1511177124-351 DRDGOLD LIMITED Constantia Office Park Cnr 14th Avenue and Hendrik Potgieter Road Cycad House, Building 17, Ground Floor Weltevreden Park 1709 Attention: Riaan Davel Dear Sirs BANKING FACILITIES Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (Nedbank) is pleased to offer the banking facilities described below to the Borrower upon the terms and conditions contained herein. This offer letter (Offer Letter), read together with the general facility provisions (including Schedule 1) (General Provisions), shall be referred to as the Facility Letter. In this Facility Letter all facilities and instruments described in this clause shall collectively be referred to as the Facilities, and facility or instrument shall refer to any of them as suggested by the context. 1.1 Borrower(s) DRDGOLD LIMITED (Registration No. 1895/000926/06) 1.2 Guarantors Ergo Mining Proprietary Limited (Registration No. 2007/004886/07) Far West Gold Recoveries Proprietary Limited (Registration No. 2017/449061/07 1.3 Aggregate amount of Facilities R500 000 000.00 1.4 General Banking Facilities Overdraft Overnight Loan 1.5 Review, Reduction and Cancellation of Facilities Nedbank shall be entitled in its sole discretion to review these Facilities at any time, including to reduce or cancel any part or all Facilities. Exhibit 4.9
Page 2 1.6 Interest 1.6.1 Interest Rate 1.6.1.1 Overdraft The interest rate is the Prime Rate minus 2.50% (two point fifty per cent) per annum 1.6.1.2 Overnight Loan The applicable rate shall be the rate quoted by Nedbank at the time of request by the Borrower for a rate or the date on which the draw down takes place, as the Parties may agree, adjusted by Nedbank on a daily basis in line with market conditions, and as notified to the Borrower when the Borrower requests such notification of the rate. 1.6.2 Penalty Interest Rate The agreed contractual rate plus 3% (three per cent) per annum. 1.6.3 Review of Interest Rate Nedbank shall, in its sole discretion and acting reasonably, be entitled to review the interest rate applicable to the Facilities and if it deems necessary, to amend the interest rate on prior written notice to the Borrower. 1.7 Duration of Facility and Repayment The facilities shall be due, claimable and payable to Nedbank by the Borrower on the date which is no earlier than 1 (one) Business Day following the Borrower's receipt of Nedbank’s written demand and shall not be affected, limited or restricted to the existence of an event of default that is continuing or not. 1.8 Fees and Costs 1.8.1 Unutilised Facility Fee The Borrower shall pay to Nedbank an Unutilised Facility Fee computed at the rate of 20 (twenty) basis points per annum, or such other rate notified by Nedbank to the Borrower from time to time (but on not less than 30 days prior written notice), which fee shall be calculated on the average monthly unutilised portion of the General Banking Facilities. The Unutilised Facility Fee shall be payable by the Borrower monthly in arrears by means of a debit entry to the current account of the Borrower and Nedbank shall provide to the Borrower an invoice in respect thereof. Should the Borrower not have a current account with Nedbank then the Unutilised Facility Fee shall be payable by the Borrower immediately on receipt by the Borrower from Nedbank of an invoice in respect thereof. If, at any time for so long as any available Facility is in force, the Borrower mandates the Lender to provide all transactional banking services required for the conduct of each Obligor's business and operations, the aforesaid unutilised facility fee charged after the date on which transactional banking
Page 3 services are implemented and continue to be provided by the Lender, shall be reduced to 0 (zero) basis points per annum. 1.9 VAT All amounts set out or expressed to be payable under a Finance Document by an Obligor to Nedbank which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies. 2 CONDITIONS OF UTILISATION OF THE GENERAL BANKING FACILITY 2.1 The Borrower may not utilise the Facility unless Nedbank has notified the Borrower that it has received all of the following documents and other evidence in form and substance satisfactory to Nedbank (which notice shall be delivered by Nedbank to the Borrower promptly upon Nedbank being so satisfied): 2.1.1 a copy of this Facility Letter signed by each Obligor; 2.1.2 a copy of all authorising resolutions of each Obligor: 2.1.2.1 approving the terms of, and the transactions contemplated by, the Finance Documents to which it is party; 2.1.2.2 authorising specified officials, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party; 2.1.2.3 (to the extent applicable) authorising it, for all purposes required under section 45 of the Companies Act, to provide the financial assistance as a result of its entry into the Finance Documents to which it is a party; and 2.1.3 to the extent required by the Companies Act or other applicable law, a copy of a special resolution duly passed by the shareholders of each Obligor (as applicable), authorising the provision of financial assistance as required in terms of section 45 of the Companies Act. 2.1.4 Nedbank confirming that it is satisfied that the proposed transaction is not in conflict with, or contravenes, any Sanctions. 2.2 If all of the documents and other evidence listed in this clause 2, to the extent not waived by Nedbank in its sole and absolute discretion, are not delivered to Nedbank on Signature Date (or by such extended date as may be agreed in writing between the Parties), Nedbank may, from the date of any written notice to this effect, cancel the Facilities contemplated in this Facility Letter.
Page 4 3 INFORMATION UNDERTAKINGS In addition to the undertakings given in the General Provisions, the Borrower undertakes to furnish Nedbank with: 3.1 audited annual consolidated Financial Statements of the Borrower and the audited financial statements of each Guarantor, as soon as they become available, however, in any event within a period of 180 (one hundred and eighty) days after the end of that Obligor's Financial Year. 3.2 its unaudited consolidated financial statements for that financial half year as soon as they become available, however, in any event within a period of 180 days after the end of each half of each of its Financial Years. 3.3 such documentation and other evidence as is reasonably requested by Nedbank for each Obligor (as applicable) in order for Nedbank, to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations. 3.4 any other information Nedbank may reasonably request from time to time. 4 DOMICILIUM CITANDI ET EXECUTANDI 4.1 The Parties choose the addresses set out opposite their names below as their domicilium citandi et executandi (whether in respect of notices, court processes or any other documents or communications of whatsoever nature) for all purposes of this Facility Letter: 4.1.1 Nedbank Physical: 5th Floor, Block G, Nedbank 135 Rivonia Campus, 135 Rivonia Road, Sandown, 2196, South Africa; Email: RestrictedCorporateFax@nedbank.co.za; Attention: Head: CIB Credit Risk, 4.1.2 Borrower Physical: Constantia Office Park, Cnr 14th Avenue and Hendrik Potgieter Road, Cycad House, Building 17, Ground Floor, Weltevreden Park 1709; Email: Riaan.davel@drdgold.com; Attention: The Chief Financial Officer. 4.1.3 Any Party may, by written notice to the others, change (1) its domicilium to another address, not being a post office box or a poste restante, in South Africa and/or (2) the address, email, department or officer for whose attention any communication or document is to be made or delivered under or in connection with this Facility Letter, provided that any such change shall only be effective on the 5th Business Day after deemed receipt of the notice by the others.
Page 5 4.2 Delivery 4.2.1 Any communication or document made or delivered by one person to another will: 4.2.1.1 if by way of email, be deemed to have been received on the 1st Business Day following the date of transmission; 4.2.1.2 if delivered by hand, be deemed to have been received at the time of delivery; and 4.2.1.3 if by way of courier service, be deemed to have been received on the 5 th Business Day following the date of such sending, provided that, if a particular department or officer was specified as part of its address details, such communication or document was addressed to that department or officer. 4.2.2 Any communication or document to be made or delivered to Nedbank will be effective only when actually received by Nedbank and then only if it is expressly marked for the attention of the relevant department or officer set out above (or any substitute department or officer as Nedbank may specify for this purpose). 5 EXPIRY AND ACCEPTANCE 5.1 The Offer contained in this Facility Letter is open for acceptance until 28 June 2024. If the Offer is not accepted by the Borrower on or before such date, the Offer shall lapse and this Facility Letter shall be of no force and effect. If the Borrower signed this Facility Letter after such date, the Borrower shall be deemed to have made Nedbank a counter-offer to enter into this Facility on the same terms and Nedbank may accept such offer at any time by signing this Facility Letter and/or making the Facilities set out herein available for utilisation by the Borrower. 5.2 We thank you for the opportunity to submit this Offer and trust that it meets your requirements. Should you require any further information or clarification, please contact Darryl Hardiman at darrylha@nedbank.co.za or 010 235 4660. If the terms of this Facility Letter are acceptable to the Borrower, kindly have an authorised official of the Borrower sign this Facility Letter and return it to Nedbank by not later than 28 June 2024, together with a resolution of the board of directors of the Borrower authorising the signing official to accept the Facilities on behalf of the Borrower. Yours faithfully M MURRAY CREDIT EXECUTIVE CIB K PILLAY SENIOR CREDIT MANAGER CIB R MISTRY REGIONAL HEAD: TRANSACTIONAL SERVICES SALES /s/ M Murray /s/ K Pillay /s/ R Mistry
Page 6 Accepted at .................................................... on this the .................... day of ............................................. 2024 For and on behalf of: DRDGOLD LIMITED (who hereby warrants his authority) Name: _______________________ Capacity: _______________________ Accepted at .................................................... on this the .................... day of ............................................. 2024 For and on behalf of: DRDGOLD LIMITED (who hereby warrants his authority) Name: _______________________ Capacity: _______________________ Accepted at .................................................... on this the .................... day of ............................................. 2024 For and on behalf of: ERGO MINING PROPRIETARY LIMITED (who hereby warrants his authority) Name: _______________________ Capacity: _______________________ /s/ Adriaan Jacobus Davel Adriaan Jacobus Davel Chief Financial Officer and Authrorised Signatory /s/ Mpho Mashatola Mpho Mashsatola Authorised Signatory Sabiha Gokcen International Airport (Istanbul, Turkey) 28th June Roodepoort 28th June Brakpan 28th June /s/ Henry Nicolaas Gouws Henry Gouws Director
Page 7 Accepted at .................................................... on this the .................... day of ............................................. 2024 For and on behalf of: FAR WEST GOLD RECOVERIES PROPRIETARY LIMITED (who hereby warrants his authority) Name: _______________________ Capacity: _______________________ Carletonville 28th June /s/ Henriette Hooijer Director Henriette Hooijer
Page 8 Schedule 1 General Provisions 1 DEFINITIONS AND INTERPRETATION 1.1 Definitions In this Facility Letter: 1.1.1 Applicable Laws means, including, but not limited to, the Companies Act, the Banks Act, Basel II (the Framework established for the International Convergence of Capital Measurement and Capital Standards) and Basel III (upon its implementation) and any amendments or any successor thereto, common or customary law, treaty or other legislative measure applicable to Nedbank and/or the Obligor and includes any present or future directive, regulation, guideline, practice, concession, request or requirement whether or not having the force of law, but, if not having the force of law, the compliance with which is customary. 1.1.2 Authorisation means an authorisation, consent, approval, resolution, permit, licence, exemption, filing, notarisation, lodgement or registration. 1.1.3 Banks Act means the Banks Act, No. 94 of 1990. 1.1.4 Business Day means a day (other than a Saturday, Sunday or proclaimed public holiday) on which banks are open for general business in Johannesburg. 1.1.5 Companies Act means the Companies Act, No. 71 of 2008. 1.1.6 Environment means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media: 1.1.6.1 air (including, without limitation, air within natural or man-made structures, whether above or below ground); 1.1.6.2 water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and 1.1.6.3 land (including, without limitation, land under water). 1.1.7 Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law. 1.1.8 Environmental Law means any applicable law or regulation which relates to: 1.1.8.1 the pollution or protection of the Environment; 1.1.8.2 the conditions of the workplace; or
Page 9 1.1.8.3 the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste. 1.1.9 Environmental Permits means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of an Obligor. 1.1.10 Finance Document/s means the Facility Letter and any other documents that are designated as such by the Parties (if any). 1.1.11 Financial Statements means the most recent financial statements of an Obligor, consolidated, if applicable and prepared in accordance with Accounting Principles. 1.1.12 Group means the Borrower and its Subsidiaries. 1.1.13 IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements. 1.1.14 Material Adverse Effect means a material adverse effect on: 1.1.14.1 the business, operations, property, condition (financial or otherwise) or prospects of the Borrower or the Group as a whole; 1.1.14.2 the ability of any Obligor to perform any of its obligations under the Finance Documents; or 1.1.14.3 the validity or enforceability of any of the Finance Documents or the rights or remedies of Nedbank under any of the Finance Documents. 1.1.15 Nedbank means collectively Nedbank Limited (Registration Number 1951/000009/06). 1.1.16 Obligor means the Borrower(s) and each Guarantor. 1.1.17 Offer means the offer of banking facilities made by Nedbank to the Borrower in the Facility Letter. 1.1.18 Parties means collectively the Obligors and Nedbank and Party shall, as the context requires, mean any one of them. 1.1.19 Prime Rate means the publicly quoted basic rate of interest (expressed as a nominal annual compounded monthly in arrears rate) levied by Nedbank from time to time on overdraft, calculated on a 365 day year, irrespective of whether the applicable year is a leap year, and proved, prima facie, in the event of a dispute and in the absence of manifest error, by a certificate under the hand of any manager of Nedbank, whose appointment and authority need not be proved. 1.1.20 Signature Date means the date of signature of the Party last signing this Facility Letter. 1.1.21 South Africa means the Republic of South Africa.
Page 10 1.1.22 Subsidiary means a "subsidiary" as defined in the Companies Act and shall include any person who would, but for not being a "company" under the Companies Act, qualify as a ‘subsidiary’ as defined in the Companies Act. 1.2 Construction 1.2.1 Words referring to any one gender include the other gender. 1.2.2 Words importing the singular shall include the plural and vice versa. 1.2.3 Any reference to a person shall include a reference to an individual, a firm, a body corporate, a trust, an unincorporated association, government or a partnership and that person’s legal representatives and successors. 1.2.4 When any number of days is prescribed in the Facility Letter, such number shall be calculated inclusively of the first and exclusively of the last day. 1.2.5 Where any act is to be performed on a day which is not a Business Day, such act shall be performed on the next Business Day. 1.2.6 Where figures are referred to in numerals and in words, if there is any conflict between the two, the words shall prevail. 2 INTEREST 2.1 The amount owing by the Borrower in respect of each facility governed by this Facility Letter shall bear interest at the rate agreed to between the Parties and such accrued interest shall be paid by the Borrower on the dates and in the manner agreed to between the Parties. 2.2 If the Borrower is in breach of any of its obligations including if there is any excess over any limit or sub-limit set out in the Facility Letter, then Nedbank shall be entitled to charge the Penalty Interest Rate on the full amount that is in excess of any limit or sub-limit including the arrears amount, any excess and any excess fee, calculated from the date of the breach until the date when the breach has been remedied to the satisfaction of Nedbank. 3 GENERAL UNDERTAKINGS The undermentioned undertakings remain in force from the Signature Date for so long as any amount is outstanding under the Finance Documents, or any available Facility is in force. The Borrower shall procure that any of the undermentioned undertakings that any member of its Group are required to comply with are complied with. 3.1 Revolving Credit Facility 3.1.1 The Obligors shall by no later than 31 July 2024, enter into a revolving credit facility for an amount no less than R1 000 000 000.00 (which may be increased by up to R500 000 000.00 (Five Hundred Million Rand) pursuant to an accordion option), to be made available to the Borrower (as borrower) with the Guarantors (as original guarantors) and Nedbank (as lender) (Revolving Credit Facility).
Page 11 3.1.2 The Parties agree that this Facility Letter shall, from the effective date of the Revolving Credit Facility, be superceded and replaced with an amended and restated facility letter that shall be subject to the terms of such Revolving Credit Facility. 3.2 Authorisations Each Obligor shall promptly: 3.2.1 obtain, comply with and do all that is necessary to maintain in full force and effect; and 3.2.2 supply certified copies to Nedbank of, any Authorisation required to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document. 3.3 Compliance with laws Each Obligor shall comply in all respects with all Applicable Laws to which it may be subject. 3.4 Environmental compliance Each Obligor and each member of the Group shall: 3.4.1 comply with all Environmental Laws; 3.4.2 obtain, maintain and ensure compliance with all requisite Environmental Permits; 3.4.3 implement procedures to monitor compliance with and to prevent liability under any Environmental Law, where failure to do so has or might reasonably be expected to have a Material Adverse Effect. 3.5 Environmental claims It shall, promptly upon becoming aware of the same, inform Nedbank in writing of: 3.5.1 any Environmental Claim against an Obligor and each member of the Group which is current, pending or threatened; and 3.5.2 any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced against an Obligor or any other member of the Group, where the claim, if determined against it or any other member of the Group, has or might reasonably be expected to have a Material Adverse Effect or might reasonably be expected to result in any liability for Nedbank. 3.6 Sanctions 3.6.1 In this Agreement: 3.6.1.1 Sanctioned Country means any country or territory which is listed on a Sanctions List or is subject to Sanctions.
Page 12 3.6.1.2 Sanctioned Entity means: 3.6.1.2.1 a person, country or territory which is listed on a Sanctions List or is subject to Sanctions; and/or 3.6.1.2.2 a person which is ordinarily resident in or whose principal place of business is in a Sanctioned Country. 3.6.1.3 Sanctioned Transaction means the use of funds for the purpose of financing or providing any credit, directly or indirectly, to: 3.6.1.3.1 a Sanctioned Entity; or 3.6.1.3.2 any other person or entity, if a Party has actual knowledge that the person or entity proposes to use the proceeds of the financing or credit for the purpose of financing or providing any credit, directly or indirectly, to a Sanctioned Entity, in each case to the extent that to do so is prohibited by, or would cause any breach of Sanctions 3.6.1.4 Sanctions means trade, economic or financial sanctions, laws, regulations, embargoes or restrictive measures imposed, administered or enforced from time to time by any Sanctions Authority. 3.6.1.5 Sanctions Authority means any of: 3.6.1.5.1 the United Nations; 3.6.1.5.2 the European Union; 3.6.1.5.3 the government of the United States of America; 3.6.1.5.4 the government of the United Kingdom; 3.6.1.5.5 the government of the Republic of France, and any of their governmental authorities, including, without limitation, the Office of Foreign Assets Control for the US Department of Treasury (OFAC), the US Department of Commerce, the US State Department or the US Department of the Treasury, His Majesty's Treasury (HMT) and the French Ministry of Finance (MINEFI). 3.6.1.6 Sanctions List means: 3.6.1.6.1 the Specially Designated Nationals and Blocked Persons List maintained by OFAC; 3.6.1.6.2 the Consolidated List of Financial Sanctions Targets and the Investments Ban List maintained by HMT;
Page 13 and any similar list maintained, or a public announcement of a Sanctions designation made, by any Sanctions Authority, in each case as amended, supplemented or substituted from time to time. 3.6.2 An Obligor shall not at any time participate in a Sanctioned Transaction in any manner. 4 WARRANTIES Each Obligor represents and warrants to Nedbank that: 4.1 Authorisations All Authorisations to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party have been obtained or effected and are in full force and effect. 4.2 Status 4.2.1 It is a corporation, duly incorporated and validly existing under the laws of its jurisdiction of incorporation. 4.2.2 It and each of its subsidiaries has the power to own its assets and carry on its business as it is being conducted. 4.3 Binding obligations The obligations expressed to be assumed by it in each Finance Document are legal, valid, binding and enforceable obligations. 4.4 Repetition Each of the representations and warranties contained in clause 4 of this Schedule 1 are deemed to be made by each Obligor as at the Signature Date and throughout the duration of the Facilities, including any renewals and extensions thereof. 5 GUARANTEE AND INDEMNITY 5.1 Each Guarantor irrevocably and unconditionally jointly and severally, as a principal obligor and not merely as a surety and on the basis of discrete obligations enforceable against it: 5.1.1 guarantees to Nedbank the punctual performance by each other Obligor of all that Obligor's obligations under the Finance Documents; 5.1.2 undertakes with Nedbank that whenever an Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and 5.1.3 agrees with Nedbank that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify Nedbank immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have
Page 14 been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 5 if the amount claimed had been recoverable on the basis of a guarantee. 5.2 Continuing guarantee This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part. 5.3 Reinstatement If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by Nedbank in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, business rescue proceedings, liquidation, winding-up or otherwise, without limitation, then the liability of each Obligor under this Clause 5 will continue or be reinstated as if the discharge, release or arrangement had not occurred. 5.4 Waiver of defences 5.4.1 The obligations of each Guarantor under this Clause 5 will not be affected by any act, omission, matter or thing which, but for this Clause 5, would reduce, release or prejudice any of its obligations under this Clause 5 (without limitation and whether or not known to it or Nedbank) including: 5.4.1.1 any time, waiver or consent granted to, or composition with, any Obligor or other person; 5.4.1.2 the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group; 5.4.1.3 the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; 5.4.1.4 any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; 5.4.1.5 any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document;
Page 15 5.4.1.6 any unenforceability, illegality, invalidity suspension or cancellation of any obligation of any person under any Finance Document or any other document; 5.4.1.7 any insolvency, liquidation, winding-up, business rescue or similar proceedings (including, but not limited to, receipt of any distribution made under or in connection with those proceedings); 5.4.1.8 any other Finance Document not being executed by or binding against any other Guarantor or any other party; or 5.4.1.9 any other fact or circumstance arising on which a Guarantor might otherwise be able to rely on a defence based on prejudice, waiver or estoppel. 5.5 Immediate recourse Each Guarantor waives any right it may have of first requiring Nedbank (or any trustee or agent on its behalf) to proceed against or enforce any other rights or claim payment from any person before claiming from that Guarantor under this Clause 5. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary. 5.6 Appropriations 5.6.1 Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, Nedbank may: 5.6.1.1 refrain from applying or enforcing any other moneys, security or rights held or received by Nedbank in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and 5.6.1.2 hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause 5. 5.7 Deferral of Guarantors' rights 5.7.1 Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless Nedbank otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 5: 5.7.1.1 to be indemnified by an Obligor; 5.7.1.2 to claim any contribution from any other guarantor of or provider of security for any Obligor's obligations under the Finance Documents; 5.7.1.3 to take the benefit (in whole or in part and whether by way of subrogation, cession of action or otherwise) of any rights of Nedbank under the Finance Documents or of any other guarantee;
Page 16 5.7.1.4 to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 5.1 (Guarantee and indemnity); 5.7.1.5 to exercise any right of set-off against any Obligor; and/or 5.7.1.6 to claim, rank, prove or vote as a creditor or shareholder of any Obligor in competition with Nedbank. 5.7.2 If a Guarantor receives any benefit, payment or distribution in relation to such rights, it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to Nedbank by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for, or otherwise for the benefit of, Nedbank and shall promptly pay or transfer the same to Nedbank. 5.8 Additional security This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by Nedbank. 5.9 Subordination by Guarantors 5.9.1 Each Guarantor unconditionally and irrevocably subordinates its claims against the Borrower in favour of any claim by Nedbank under the Finance Documents. 5.9.2 Until such time as the date when the Borrower’s obligations have been discharged in full: 5.9.2.1 the obligations contained under the Finance Documents shall rank pari passu to the Revolving Credit Facility; 5.9.2.2 the Guarantors shall not, in relation to Nedbank’s claims, call an event of default or redemption event (or other analogous event however described) against the Borrower and/or accelerate any indebtedness or other amount owing by the Borrower to Nedbank without the Nedbank’s prior written consent thereto; 5.9.2.3 no payment (whether directly or indirectly) of any amount payable (whether it be in whole or in part) by the Borrower to the Guarantors in respect of or arising from any claims shall be made or accepted by the Guarantors save for in the ordinary course of the business operation and where default or events of default has not occurred or continuing; 5.9.2.4 the Guarantors shall not take, accept or receive the benefit of any security from the Borrower; 5.9.2.5 the Guarantors shall not dispose or encumber its shares or claims; 5.9.2.6 the Guarantors shall not obtain or enforce any judgment against the Borrower arising from or in connection with Nedbank’s claims;
Page 17 5.9.2.7 the Guarantors shall not, in relation to any liability arising out of or in connection with Nedbank’s claims, petition or apply for or vote in favour of any resolution for the winding up, dissolution, sequestration or administration, or the commencement of business rescue proceedings, or any analogous or similar processes in relation to the Borrower; 5.9.2.8 if the Borrower is placed in liquidation (whether provisional or final), or effects a composition, compromise, or rescheduling with any of its creditors or if a proposal and sanction of a scheme of arrangement in respect of the Borrower occurs or if the Borrower commences business rescue proceedings, then the Guarantors undertakes in respect of any claim proved by it that it shall hold any money received by it in trust on behalf of and to the order of Nedbank and shall pay any such amounts to Nedbank immediately on written demand by Nedbank to the extent required in order to pro tanto discharge the aforesaid claims in respect of Nedbank; 5.9.2.9 the Guarantors shall not be entitled to pledge, assign, cede or otherwise encumber or transfer its claims to any person unless and until it is a suspensive condition of such pledge, assignment, cession or other encumbrance that such person notifies Nedbank in writing of any such encumbrance or transfer and subordinates such claims in writing in favour of Nedbank on the same terms and conditions as are contained in this Facility Letter and such person so subordinates such claims (in a form and substance acceptable to Nedbank); 5.9.2.10 without limiting Nedbank's rights in any way, any payment accepted by the Guarantors from the Borrower in contravention, whether intentional or unintentional, of the terms of the Finance Documents, shall be repaid by the Guarantors to the Borrower immediately on written demand by Nedbank and until so repaid shall be held in trust for and to the order of Nedbank; 5.9.2.11 the Guarantors shall not enforce any judgment against the Borrower nor make any application for the liquidation, composition, compromise, administration, commencement of business rescue proceedings or any analogous or similar process or the proposal of a scheme of arrangement in respect of the Borrower, or collaborate with any other creditors of the Borrower in the making of such application, without the prior written consent from Nedbank; and 5.9.2.12 the Guarantors shall not, in the event that business rescue proceedings have commenced in relation to the Borrower in accordance with the provisions of Chapter 6 of the Companies Act, (in its capacity as shareholder and/or creditor of the Borrower (as the case may be): 5.9.2.12.1 vote to approve or oppose a proposed business rescue plan in relation to such business rescue proceedings in the manner contemplated in section 152(3)(c) of the Companies Act; and/or
Page 18 5.9.2.12.2 provide, or call for, a vote of approval for the preparation and publication of a revised business rescue plan as contemplated in section 153(1) of the Companies Act; and/or 5.9.2.12.3 make a binding offer to purchase the voting interests of one or more persons who opposed adoption of the business rescue plan in the manner contemplated in section 153(1)(b)(ii) of the Companies Act, if such vote, provision or offer would reduce the amounts payable to Nedbank under the Finance Documents. 6 CALCULATIONS AND CERTIFICATES 6.1 Accounts In any litigation or arbitration proceedings arising out of or in connection with the Facility Letter, the entries made in the accounts maintained by Nedbank are prima facie proof of the matters to which they relate. 6.2 Certificates and Determinations Any certification or determination by Nedbank of a rate or amount under the Facility Letter is, in the absence of manifest error, prima facie proof of the matters to which it relates. 6.3 Day count convention Any interest, commission or fee accruing under the Facility Letter will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 365 days (irrespective of whether the year in question is a leap year). 7 ENFORCEMENT COSTS The Borrower shall, within 3 Business Days of demand, pay to Nedbank the amount of all costs and expenses (including legal fees on the scale as between attorney and own client whether incurred before or after judgment) incurred by Nedbank in connection with the enforcement of, or the preservation of any rights under, any Finance Document. 8 CHANGES TO THE PARTIES 8.1 No Obligor may cede any of its rights or delegate any of its obligations under the Finance Documents. 8.2 Nedbank shall be entitled to cede any of its rights or delegate any of its obligations under the Finance Documents and to disclose to such company such information regarding any Obligor as Nedbank may reasonably consider appropriate. 9 MISCELLANEOUS 9.1 Applicable Law and Jurisdiction 9.1.1 This Facility Letter shall be governed by and interpreted in accordance with the law of South Africa.
Page 19 9.1.2 The Parties hereby irrevocably and unconditionally consent to the non-exclusive jurisdiction of The High Court of South Africa, Gauteng Local Division, Johannesburg (or any successor to that division) in regard to all matters arising from the Finance Documents (including a dispute relating to the existence, validity or termination of this Agreement or any non- contractual obligation arising out of or in connection with this Agreement) (a Dispute). 9.1.3 The Parties agree that the courts of South Africa are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. 9.2 Entire Agreement This Facility Letter contains all the express provisions agreed on by the Parties with regard to the subject matter hereof and the Parties waive the right to rely on any alleged express provision not contained in this Facility Letter. 9.3 Variation and Cancellation No variation, addition to, amendment or cancellation of any term contained in this Facility Letter, shall be effective unless reduced to writing and signed by or on behalf of the Parties.
EX-4.10
5
exhibit410_gbfammendment.htm
EX-4.10
exhibit410_gbfammendment
8 August 2024 Nedbank 135 Rivonia Campus 135 Rivonia Road Sandown Sandton 2196 | PO Box 1144 Johannesburg 2000 South Africa T +27 11 294 4444 | F +27 11 295 1111 | E cib@nedbank.co.za | W nedbank.co.za/cib Directors: AD Mminele (Chairperson) JP Quinn (Chief Execu ve) HR Brody (Lead Independent Director) BA Dames MH Davis (Chief Financial Officer) NP Dongwana EM Kruger P Langeni RAG Leith L Makalima MC Nkuhlu (Chief Opera ng Officer) Dr TM Nombembe S Subramoney Company Secretary: J Katzin 31.05.2024 Nedbank Corporate and Investment Banking is a division of Nedbank Limited Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16). LEGAL-1511177124-351 DRDGOLD LIMITED Constantia Office Park Cnr 14th Avenue and Hendrik Potgieter Road Cycad House, Building 17, Ground Floor Weltevreden Park 1709 Attention: Riaan Davel Dear Sirs AMENDED AND RESTATED BANKING FACILITIES On or about 28 June 2024, Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (Nedbank) (as lender) entered into a facility letter with DRDGOLD Limited (as borrower) (the Borrower), Ergo Mining Proprietary Limited and Far West Gold Recoveries Proprietary Limited (each as guarantor) in terms of which Nedbank made available a general banking facility to the Borrower in an aggregate amount of ZAR500,000,000 (five hundred million Rand) (the Facility Letter). The Facility Letter was subsequently amended on or about 31 July 2024 to (i) extend the execution date of the Revolving Credit Facility Agreement to 08 August 2024; and (ii) extend the date by which the Facility Letter is required to be amended and restated to be subject to the terms of the Revolving Credit Facility Agreement (in each case as defined below) to 8 August 2024 (the Extension). In accordance with paragraph 3.1.2 of the Facility Letter (as amended by the Extension), the Parties have agreed to enter into this Amended and Restated Facility Letter to further amend and restate the Facility Letter in order to incorporate the terms of the Revolving Credit Facility Agreement (in each case as defined below). Nedbank is pleased to offer the banking facilities described below to the Borrower upon the terms and conditions contained herein. This offer letter (Offer Letter), read together with the general facility provisions (including Schedule 1) (General Provisions), shall be referred to as the Amended and Restated Facility Letter. In this Amended and Restated Facility Letter all facilities and instruments described in this clause shall collectively be referred to as the Facilities, and facility or instrument shall refer to any of them as suggested by the context. 1.1 Borrower(s) DRDGOLD LIMITED (Registration No. 1895/000926/06) 1.2 Guarantors Ergo Mining Proprietary Limited Exhibit 4.10
Page 2 (Registration No. 2007/004886/07) Far West Gold Recoveries Proprietary Limited (Registration No. 2017/449061/07 1.3 Aggregate amount of Facilities R500 000 000.00 1.4 General Banking Facilities Overdraft Overnight Loan 1.5 Review, Reduction and Cancellation of Facilities Nedbank shall be entitled in its sole discretion to review these Facilities at any time, including to reduce or cancel any part or all Facilities. 1.6 Interest 1.6.1 Interest Rate 1.6.1.1 Overdraft The interest rate is the Prime Rate minus 2.50% (two point fifty per cent) per annum 1.6.1.2 Overnight Loan The applicable rate shall be the rate quoted by Nedbank at the time of request by the Borrower for a rate or the date on which the draw down takes place, as the Parties may agree, adjusted by Nedbank on a daily basis in line with market conditions, and as notified to the Borrower when the Borrower requests such notification of the rate. 1.6.2 Penalty Interest Rate The agreed contractual rate plus 3% (three per cent) per annum. 1.6.3 Review of Interest Rate Nedbank shall, in its sole discretion and acting reasonably, be entitled to review the interest rate applicable to the Facilities and if it deems necessary, to amend the interest rate on prior written notice to the Borrower. 1.7 Duration of Facility and Repayment The facilities shall be due, claimable and payable to Nedbank by the Borrower on the date which is no earlier than 1 (one) Business Day following the Borrower's receipt of Nedbank’s written demand and shall not be affected, limited or restricted to the existence of an event of default that is continuing or not. 1.8 Fees and Costs 1.8.1 Unutilised Facility Fee The Borrower shall pay to Nedbank an Unutilised Facility Fee computed at the rate of 20 (twenty) basis points per annum, or such other rate notified by Nedbank to the Borrower from time to time (but on not less than 30 days prior written notice), which fee shall be calculated on the average monthly unutilised portion of the General Banking Facilities.
Page 3 The Unutilised Facility Fee shall be payable by the Borrower monthly in arrears by means of a debit entry to the current account of the Borrower and Nedbank shall provide to the Borrower an invoice in respect thereof. Should the Borrower not have a current account with Nedbank then the Unutilised Facility Fee shall be payable by the Borrower immediately on receipt by the Borrower from Nedbank of an invoice in respect thereof. If, at any time for so long as any available Facility is in force, the Borrower mandates the Lender to provide all transactional banking services required for the conduct of each Obligor's business and operations, the aforesaid unutilised facility fee charged after the date on which transactional banking services are implemented and continue to be provided by the Lender, shall be reduced to 0 (zero) basis points per annum. 1.9 VAT All amounts set out or expressed to be payable under a Finance Document by an Obligor to Nedbank which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies. 2 INCORPORATION BY REFERENCE PROVISIONS 2.1 On or about 31 July 2024, the Borrower (as borrower) and, inter alios, Nedbank (as lender) entered into a revolving credit facility agreement in terms of which a ZAR1,000,000,000 revolving credit facility, with a ZAR500,000,000 accordion option, is made available by the Lenders (as defined therein) to the Borrower (Revolving Credit Facility Agreement). Certain provisions of the Revolving Credit Facility Agreement shall be, in terms of this Amended and Restated Facility Letter, incorporated by reference herein and form part of this Amended and Restated Facility Letter as if set out in full herein. Notwithstanding the provisions (and without prejudice to the general application) of Clause 1.4 (Conflicts between Finance Documents), in the event of any conflict between the provisions of this Amended and Restated Facility Letter and the provisions of the Revolving Credit Facility Agreement, the provisions of this Amended and Restated Facility Letter shall prevail. 2.2 Notwithstanding that the Revolving Credit Facility Agreement may terminate and/or the amounts outstanding thereunder be fully and finally discharged and/or no longer be applicable for any reason whatsoever, the terms and conditions of the Revolving Credit Facility Agreement explicitly incorporated into this Amended and Restated Facility Letter shall remain in full force and effect. 2.3 Whenever provisions of the Revolving Credit Facility Agreement are incorporated herein, such provisions must be read mutatis mutandis (which means that they must be read with the necessary changes) and any reference to: 2.3.1 the Lender, the Lenders, a Finance Party and/or the Facility Agent shall be construed as a reference to Nedbank;
Page 4 2.3.2 any reference to Available Facility shall be construed as a reference to the Aggregate amount of Facilities under this Amended and Restated Facility Letter; and 2.3.3 any reference to a Loan shall be construed as a reference to a loan under the General Banking Facilities or the principal amount outstanding for the time being of that loan. 3 CONDITIONS OF UTILISATION OF THE GENERAL BANKING FACILITY 3.1 The Borrower may not utilise the Facility unless Nedbank has notified the Borrower that it has received all of the following documents and other evidence in form and substance satisfactory to Nedbank (which notice shall be delivered by Nedbank to the Borrower promptly upon Nedbank being so satisfied): 3.1.1 a copy of this Amended and Restated Facility Letter signed by each Obligor 3.1.2 a copy of all authorising resolutions of each Obligor: 3.1.2.1 approving the terms of, and the transactions contemplated by, the Finance Documents to which it is party; 3.1.2.2 authorising specified officials, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party; 3.1.2.3 (to the extent applicable) authorising it, for all purposes required under section 45 of the Companies Act, to provide the financial assistance as a result of its entry into the Finance Documents to which it is a party; and 3.1.3 to the extent required by the Companies Act or other applicable law, a copy of a special resolution duly passed by the shareholders of each Obligor (as applicable), authorising the provision of financial assistance as required in terms of section 45 of the Companies Act. 3.1.4 Nedbank confirming that it is satisfied that the proposed transaction is not in conflict with, or contravenes, any Sanctions. 3.2 If all of the documents and other evidence listed in this clause 2, to the extent not waived by Nedbank in its sole and absolute discretion, are not delivered to Nedbank on Signature Date (or by such extended date as may be agreed in writing between the Parties), Nedbank may, from the date of any written notice to this effect, cancel the Facilities contemplated in this Facility Letter. Nedbank records that the documents and other evidence required under clause 3.1 were delivered to its satisfaction before the date of this Amended and Restated Facility Letter.
Page 5 4 INFORMATION UNDERTAKINGS In addition to the undertakings given in the General Provisions, the Borrower undertakes to furnish Nedbank with: 4.1 audited annual consolidated Financial Statements of the Borrower and the audited financial statements of each Guarantor, as soon as they become available, however, in any event within a period of 180 (one hundred and eighty) days after the end of each of its financial years. 4.2 its unaudited consolidated financial statements for that financial half year as soon as they become available, however, in any event within a period of 180 days after the end of each half of each of its financial years. 4.3 such documentation and other evidence as is reasonably requested by Nedbank for each Obligor (as applicable) in order for Nedbank, to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations. 4.4 any other information Nedbank may reasonably request from time to time. 5 DOMICILIUM CITANDI ET EXECUTANDI 5.1 The Parties choose the addresses set out opposite their names below as their domicilium citandi et executandi (whether in respect of notices, court processes or any other documents or communications of whatsoever nature) for all purposes of this Amended and Restated Facility Letter: 5.1.1 Nedbank Physical: 5th Floor, Block G, Nedbank 135 Rivonia Campus, 135 Rivonia Road, Sandown, 2196, South Africa; Email: RestrictedCorporateFax@nedbank.co.za; Attention: Head: CIB Credit Risk, 5.1.2 Borrower Physical: Constantia Office Park, Cnr 14th Avenue and Hendrik Potgieter Road, Cycad House, Building 17, Ground Floor, Weltevreden Park 1709; Email: Riaan.davel@drdgold.com; Attention: The Chief Financial Officer. 5.1.3 Any Party may, by written notice to the others, change (1) its domicilium to another address, not being a post office box or a poste restante, in South Africa and/or (2) the address, email, department or officer for whose attention any communication or document is to be made or delivered under or in connection with this Amended and Restated Facility Letter, provided that any such change shall only be effective on the 5th Business Day after deemed receipt of the notice by the others.
Page 6 5.2 Delivery 5.2.1 Any communication or document made or delivered by one person to another will: 5.2.1.1 if by way of email, be deemed to have been received when actually received in readable form by the person to whom it was addressed; 5.2.1.2 if delivered by hand, be deemed to have been received at the time of delivery; and 5.2.1.3 if by way of courier service, be deemed to have been received on the 7th Business Day following the date of such sending, provided that, if a particular department or officer was specified as part of its address details, such communication or document was addressed to that department or officer. 5.2.2 Any communication or document to be made or delivered to Nedbank will be effective only when actually received by Nedbank and then only if it is expressly marked for the attention of the relevant department or officer set out above (or any substitute department or officer as Nedbank may specify for this purpose). 6 EXPIRY AND ACCEPTANCE 6.1 The Offer contained in this Amended and Restated Facility Letter is open for acceptance until 8 August 2024. If the Offer is not accepted by the Borrower on or before such date, the Offer shall lapse and this Amended and Restated Facility Letter shall be of no force and effect and the terms of the original Facility Letter shall continue to be valid and binding on the Parties. If the Borrower signed this Amended and Restated Facility Letter after such date, the Borrower shall be deemed to have made Nedbank a counteroffer to enter into this Amended and Restated Facility Letter on the same terms and Nedbank may accept such offer at any time by signing this Amended and Restated Facility Letter and/or making the Facilities set out herein available for utilisation by the Borrower on the terms of this Amended and Restated Facility Letter. 6.2 We thank you for the opportunity to submit this Offer and trust that it meets your requirements. Should you require any further information or clarification, please contact Darryl Hardiman at darrylha@nedbank.co.za or 010 235 4660. If the terms of this Amended and Restated Facility Letter are acceptable to the Borrower, kindly have an authorised official of the Borrower sign this Amended and Restated Facility Letter and return it to Nedbank by not later than 8 August 2024, together with a resolution of the board of directors of the Borrower authorising the signing official to accept the Facilities on behalf of the Borrower.
Page 7 Yours faithfully /s/ M Murray M MURRAY CREDIT EXECUTIVE /s/ K Pillay K PILLAY SENIOR CREDIT MANAGER /s/ D Hardiman D HARDIMAN PRINCIPAL: TRANSACTIONAL SERVICES SALES Accepted at …….Roodepoort ......................... on this the …8th ............ day of …August .............................. 2024 /s/ Adriaan Jacobus Davel For and on behalf of: DRDGOLD LIMITED (who hereby warrants his authority) Name: _ Adriaan Jacobus Davel___ Capacity: Authorised signatory Accepted at ….Roodepoort ............................. on this the …8th ............ day of …August .............................. 2024 /s/ Mpho Mashatola For and on behalf of: DRDGOLD LIMITED (who hereby warrants his authority) Name: Mpho Mashatola Capacity: Authorised signatory
Page 8 Accepted at …Brakpan ................................... on this the …8th ............ day of …August .............................. 2024 /s/ Henry Nicolaas Gouws For and on behalf of: ERGO MINING PROPRIETARY LIMITED (who hereby warrants his authority) Name: Henry Nicolaas Gouws Capacity: Director___________ Accepted at …Carletonville ............................. on this the …8th ............ day of …August .............................. 2024 /s/ Henriette Hooijer For and on behalf of: FAR WEST GOLD RECOVERIES PROPRIETARY LIMITED (who hereby warrants his authority) Name: Henriette Hooijer Capacity: Director
Page 9 Schedule 1 General Provisions 1. DEFINITIONS AND INTERPRETATION In this Amended and Restated Facility Letter, terms defined in the Revolving Credit Facility Agreement have the same meaning in this Amended and Restated Facility Letter unless given a different meaning in this Amended and Restated Facility Letter and, unless clearly inconsistent with or otherwise indicated by the context: 1.1 The following expressions shall bear the meanings ascribed to them hereunder and cognate expressions shall have corresponding meanings 1.1.1 Applicable Laws means, including, but not limited to, the Companies Act, the Banks Act, Basel II (the Framework established for the International Convergence of Capital Measurement and Capital Standards) and Basel III (upon its implementation) and any amendments or any successor thereto, common or customary law, treaty or other legislative measure applicable to Nedbank and/or the Obligor and includes any present or future directive, regulation, guideline, practice, concession, request or requirement whether or not having the force of law, but, if not having the force of law, the compliance with which is customary. 1.1.2 Finance Document/s means the Amended and Restated Facility Letter, the Revolving Credit Facility Agreement and any other documents that are designated as such by the Parties (if any). 1.1.3 Financial Statements means the most recent financial statements of an Obligor, consolidated, if applicable and prepared in accordance with IFRS. 1.1.4 Group means the Borrower and its Subsidiaries. 1.1.5 IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements. 1.1.6 Nedbank means collectively Nedbank Limited (Registration Number 1951/000009/06). 1.1.7 Obligor means the Borrower(s) and each Guarantor. 1.1.8 Offer means the offer of banking facilities made by Nedbank to the Borrower in the Amended and Restated Facility Letter. 1.1.9 Parties means collectively the Obligors and Nedbank and Party shall, as the context requires, mean any one of them. 1.1.10 Prime Rate means the publicly quoted basic rate of interest (expressed as a nominal annual compounded monthly in arrears rate) levied by Nedbank from time to time on overdraft, calculated on a 365 (three hundred and sixty five) day year, irrespective of whether the
Page 10 applicable year is a leap year, and proved, prima facie, in the event of a dispute and in the absence of manifest error, by a certificate under the hand of any manager of Nedbank, whose appointment and authority need not be proved. 1.1.11 Signature Date means the date of signature of the Party last signing this Amended and Restated Facility Letter. 1.1.12 South Africa means the Republic of South Africa. 1.1.13 Subsidiary means a "subsidiary" as defined in the Companies Act and shall include any person who would, but for not being a "company" under the Companies Act, qualify as a ‘subsidiary’ as defined in the Companies Act. The provisions of clause 1.2 and 1.3 of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 2. PAYMENTS 2.1 Any payments to be made by the Borrower under this Amended and Restated Facility Letter shall be made no later than 12:00PM (Johannesburg time) on the due date and in such manner as Nedbank may notify the Borrower in writing from time to time. Any payment shall be made without (and free and clear of any deduction for) set-off or counterclaim. 2.2 All interest, charges, commission, costs and fees which are payable by the Borrower to Nedbank under this Amended and Restated Facility Letter shall be paid in ZAR and, unless paid directly by the Borrower, shall, at the election of Nedbank, be paid out of any current account of the Borrower held at Nedbank. The Borrower hereby authorises Nedbank to debit and deduct such interest, charges, commissions, costs and fees from such current account. 2.3 Nedbank shall be entitled to allocate all and any payments by the Borrower, after deduction of costs, to any indebtedness of the Borrower to Nedbank under this Amended and Restated Facility Letter or under the Revolving Credit Facility Agreement and the Borrower waives all and any rights that it may have to name the debt in respect of which such payment is made. 3. INTEREST 3.1 The amount owing by the Borrower in respect of each facility governed by this Amended and Restated Facility Letter shall bear interest at the rate agreed to between the Parties and such accrued interest shall be paid by the Borrower monthly in arrears or on the other dates and in such other manner agreed to between the Parties. 3.2 If the Borrower is in breach of any of its obligations including if there is any excess over any limit or sub-limit set out in the Amended and Restated Facility Letter, then Nedbank shall be entitled to charge the Penalty Interest Rate on the full amount that is in excess of any limit or sub-limit including the arrears amount, any excess and any excess fee, calculated from the date of the breach until the date when the breach has been remedied to the satisfaction of Nedbank.
Page 11 3.3 Any amounts owing to Nedbank under any foreign finance facility made available under this Amended and Restated Facility Letter which are not paid on the due date thereof or any excess over any foreign finance limit or sub-limit, as the case may be, shall bear interest at a rate that is 2% above the rate applicable to loans under such foreign finance facility, calculated from the due date thereof or the date on which any excess occurred, as the case may be, until the date of actual payment thereof by the Borrower to Nedbank. 4. TAX GROSS UPS The provisions of clauses 12 (Tax Gross-Up and Indemnities), of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 5. INCREASED COSTS The provisions of clause 13 (Increased Costs) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 6. OTHER INDEMNITIES The provisions of clause 14 (Other Indemnities) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 7. MITIGATION BY LENDERS The provisions of clause 15 (Mitigation by Lenders) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 8. GUARANTEE AND INDEMNITY The provisions of clause 17 (Guarantee and Indemnity) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 9. REPRESENTATIONS The provisions of clause 18 (Representations) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein
Page 12 and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the Commitment is in force. 10. INFORMATION UNDERTAKINGS With effect from: 10.1 the Signature Date of this Amended and Restated Facility Letter, the provisions of clause 19.3, 19.7 and 19.8 of clause 19 (Information Undertakings) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower; and 10.2 the Termination Date (as defined under the Revolving Credit Facility Agreement), the provisions of clause 19 (Information Undertakings) of the Revolving Credit Facility Agreement (save for Clauses 19.2, 19.10 – 19.12) are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 11. EVENTS OF DEFAULT 11.1 The provisions of clause 22 (Event of Default) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 11.2 Acceleration On and at any time after the occurrence of an Event of Default (as defined under the Revolving Credit Facility Agreement) Nedbank may, without prejudice to any other remedy, on written notice to the Borrower: 11.2.1 cancel the Facilities whereupon they shall immediately be cancelled; 11.2.2 refuse to advance any further amounts to the Borrower or suspend the availability of any Facility; 11.2.3 declare that all or part of the Facilities, together with accrued interest and all other amounts accrued or outstanding under the Facilities be immediately due and payable, whereupon they shall become immediately due and payable; 11.2.4 declare that all or part of the Facilities be payable on demand, whereupon they shall immediately become due and payable on demand by Nedbank; 11.2.5 declare that cash cover in respect of certain facilities, including but not limited to, Letters of Credit, Letters of Guarantee is immediately payable, whereupon that cash cover shall become immediately due and payable.
Page 13 11 SET OFF The provisions of clause 29 (Set-Off) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 12 PARTIAL INVALIDITY The provisions of clause 32 (Partial Invalidity) of the Revolving Credit Facility Agreement are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 13 CHANGE OF OBLIGORS The provisions of clause 23 (Change of Obligors) of the Revolving Credit Facility Agreement, together with Schedule 4 (Form of Accession Letter) and Schedule 5 (Form of Resignation Letter) under the Revolving Credit Facility Agreement, are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 14 CHANGE OF LENDER The provisions of clause 24 (Change of Lenders) of the Revolving Credit Facility Agreement, together with Schedule 8 (Form of Transfer Certificate) and Schedule 9 (Permitted Transferees) under the Revolving Credit Facility Agreement, are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 15 GENERAL UNDERTAKINGS The provisions of clause 21 of the Revolving Credit Facility Agreement (save for Clause 21.22, 21.23 and 21.25) are hereby incorporated, mutatis mutandis, in this Amended and Restated Facility Letter as if set out in full herein and shall apply for so long as any amount is outstanding under the Amended and Restated Facility Letter or the General Banking Facilities remain available to the Borrower. 16 REVOLVING CREDIT FACILITY The Obligors shall by no later than 31 July 2024, enter into a revolving credit facility for an amount no less than R1 000 000 000.00 (One Billion Rand) (which may be increased by up to R500 000 000.00 (Five Hundred Million Rand) pursuant to an accordion option), to be made available to the Borrower (as borrower) with the Guarantors (as original guarantors) and Nedbank (as lender) (Revolving Credit Facility). The Parties record that the Revolving Credit Facility was entered into on 31 July 2024
Page 14 17 CALCULATIONS AND CERTIFICATES 17.2 Accounts In any litigation or arbitration proceedings arising out of or in connection with the Amended and Restated Facility Letter, the entries made in the accounts maintained by Nedbank are prima facie proof of the matters to which they relate. 17.3 Certificates and Determinations Any certification or determination by Nedbank of a rate or amount under the Amended and Restated Facility Letter is, in the absence of manifest error, prima facie proof of the matters to which it relates. 17.4 Day count convention Any interest, commission or fee accruing under the Amended and Restated Facility Letter will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 365 (three hundred and sixty five) days (irrespective of whether the year in question is a leap year) or, in relation to loans advanced other than in ZAR, based on the day count convention applicable to the relevant currency. 18 ENFORCEMENT COSTS The Borrower shall, within 3 (three) Business Days of demand, pay to Nedbank the amount of all costs and expenses (including legal fees on the scale as between attorney and own client whether incurred before or after judgment) incurred by Nedbank in connection with the enforcement of, or the preservation of any rights under, any Finance Document. 19 MISCELLANEOUS 19.2 Applicable Law and Jurisdiction 19.2.7 This Amended and Restated Facility Letter shall be governed by and interpreted in accordance with the law of South Africa. 19.2.8 The Parties hereby irrevocably and unconditionally consent to the non-exclusive jurisdiction of The High Court of South Africa, Gauteng Local Division, Johannesburg (or any successor to that division) in regard to all matters arising from the Finance Documents (including a dispute relating to the existence, validity or termination of this Agreement or any non- contractual obligation arising out of or in connection with this Agreement) (a Dispute). 19.2.9 The Parties agree that the courts of South Africa are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. 19.3 Entire Agreement This Amended and Restated Facility Letter contains all the express provisions agreed on by the Parties with regard to the subject matter hereof and the Parties waive the right to rely on any alleged express provision not contained in this Amended and Restated Facility Letter.
Page 15 19.4 Variation and Cancellation No variation, addition to, amendment or cancellation of any term contained in this Amended and Restated Facility Letter, shall be effective unless reduced to writing and signed by or on behalf of the Parties.
EX-4.11
6
exhibit411_rcf.htm
EX-4.11
exhibit411_rcf
law | tax | forensics | IP Edward Nathan Sonnenbergs Incorporated registration number 2006/018200/21 EXECUTION VERSION ENS The MARC Tower 1 129 Rivonia Road Sandton Johannesburg South Africa 2196 P O Box 783347 Sandton South Africa 2146 Docex 152 Randburg tel +2711 269 7600 info@ENSafrica.com ENSafrica.com <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 ZAR1,000,000,000 REVOLVING CREDIT FACILITY AGREEMENT WITH ZAR500,000,000 ACCORDION entered into between: DRDGOLD LIMITED (as Borrower) THE ENTITIES LISTED IN PART II of SCHEDULE 1 (ORIGINAL GUARANTORS) (as Original Guarantor) NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CORPORATE AND INVESTMENT BANKING DIVISION) (as Original Lender) and NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CORPORATE AND INVESTMENT BANKING DIVISION) (as Agent) Exhibit 4.11
2 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 TABLE OF CONTENTS Clause number and description Page 1. DEFINITIONS AND INTERPRETATION ................................................................................................ 4 2. THE FACILITY ...................................................................................................................................... 26 3. PURPOSE ............................................................................................................................................ 30 4. CONDITIONS OF UTILISATION .......................................................................................................... 30 5. UTILISATION ........................................................................................................................................ 31 6. REPAYMENT ........................................................................................................................................ 32 7. PREPAYMENT AND CANCELLATION ................................................................................................ 33 8. INTEREST ............................................................................................................................................ 39 9. INTEREST PERIODS ........................................................................................................................... 41 10. CHANGES TO THE CALCULATION OF INTEREST ........................................................................... 42 11. FEES ..................................................................................................................................................... 43 12. TAX GROSS UP AND INDEMNITIES .................................................................................................. 44 13. INCREASED COSTS............................................................................................................................ 47 14. OTHER INDEMNITIES ......................................................................................................................... 48 15. MITIGATION BY THE LENDERS ......................................................................................................... 49 16. COSTS AND EXPENSES .................................................................................................................... 50 17. GUARANTEE AND INDEMNITY .......................................................................................................... 50 18. REPRESENTATIONS .......................................................................................................................... 53 19. INFORMATION UNDERTAKINGS ....................................................................................................... 57 20. FINANCIAL COVENANTS .................................................................................................................... 63 21. GENERAL UNDERTAKINGS ............................................................................................................... 65 22. EVENTS OF DEFAULT ........................................................................................................................ 72 23. CHANGES TO THE OBLIGORS .......................................................................................................... 76 24. CHANGES TO THE LENDERS ............................................................................................................ 77 25. ROLE OF THE AGENT ........................................................................................................................ 79 26. CONDUCT OF BUSINESS BY THE FINANCE PARTIES ................................................................... 87 27. SHARING AMONG THE FINANCE PARTIES ..................................................................................... 87 28. PAYMENT MECHANICS ...................................................................................................................... 88
3 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 29. SET-OFF ............................................................................................................................................... 91 30. NOTICES .............................................................................................................................................. 91 31. CALCULATIONS AND CERTIFICATES............................................................................................... 93 32. PARTIAL INVALIDITY .......................................................................................................................... 94 33. REMEDIES AND WAIVERS ................................................................................................................. 94 34. AMENDMENTS AND WAIVERS .......................................................................................................... 94 35. CONFIDENTIAL INFORMATION ......................................................................................................... 98 36. CONFIDENTIALITY OF FUNDING RATES ....................................................................................... 101 37. COUNTERPARTS .............................................................................................................................. 102 38. WAIVER OF IMMUNITY ..................................................................................................................... 102 39. SOLE AGREEMENT........................................................................................................................... 102 40. GOVERNING LAW ............................................................................................................................. 103 41. JURISDICTION ................................................................................................................................... 103 Schedule 1 - Original Guarantors ............................................................................................................ 104 Schedule 2 - Conditions Precedent ......................................................................................................... 105 Schedule 3 - Utilisation Request ............................................................................................................. 108 Schedule 4 - Form of Accession Letter ................................................................................................... 109 Schedule 5 - Form of Resignation Letter................................................................................................. 110 Schedule 6 - Form of Compliance Certificate.......................................................................................... 111 Schedule 7 - Accordion Increase Documents ......................................................................................... 112 Schedule 8 - Form of Transfer Certificate ............................................................................................... 114 Schedule 9 - Permitted Transferees ........................................................................................................ 117 Schedule 10 - Sustainability Schedule ...................................................................................................... 118
4 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 This Agreement is made between: A. DRDGOLD Limited (Registration Number 1895/000926/06), a public company incorporated and existing in accordance with the laws of South Africa having its registered address at Constantia Office Park Cycad House, Cnr 14th Avenue and Hendrik Potgieter, Weltevreden Park, Gauteng, 1709, as borrower (the "Borrower"); B. each person listed in Schedule 1 (Original Guarantors), as original guarantors (the "Original Guarantors"); C. Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (Registration No. 1951/000009/06), a public company and registered bank duly incorporated under the laws of South Africa, as lender (the "Original Lender"); and D. Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (Registration No. 1951/000009/06), a public company and registered bank duly incorporated under the laws of South Africa, as agent of the other Finance Parties (the "Agent"). It is agreed as follows: 1. DEFINITIONS AND INTERPRETATION 1.1. Definitions In this Agreement: 1.1.1. "Accession Letter" means a document substantially in the form set out in Schedule 4 (Form of Accession Letter); 1.1.2. "Accordion Increase Confirmation" means a confirmation delivered by the Agent to the Borrower under Clause 2.2 (Accordion increase option), substantially in the form annexed as Part II (Form of Accordion Increase Confirmation) of Schedule 7 (Accordion Increase Documents); 1.1.3. "Accordion Increase Effective Date" has the meaning given to this term in Clause 2.2.2.7; 1.1.4. "Accordion Increase Request" means a request delivered by the Borrower to the Agent under Clause 2.2 (Accordion increase option), substantially in the form annexed as Part I (Form of Accordion Increase Request) of Schedule 7 (Accordion Increase Documents); 1.1.5. "Accounting Reference Date" means 30 June of each year; 1.1.6. "Additional Guarantor" means a company which becomes an Additional Guarantor in accordance with Clause 23.2 (Additional Guarantors); 1.1.7. "Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company; 1.1.8. "Aggregate Accordion Increase Amount" has the meaning given to this term in Clause 2.2.1; 1.1.9. "Agreement" means this Agreement and its Schedules;
5 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.10. "Anti-Corruption Laws" all laws, rules, and regulations of any jurisdiction applicable from time to time concerning or relating to bribery, corruption or money laundering, which includes but is not limited to: 1.1.10.1. the following South African laws: 1.1.10.1.1. the Financial Intelligence Centre Act, 2001; 1.1.10.1.2. the Prevention and Combating of Corrupt Activities Act, 2004; and 1.1.10.1.3. the Prevention of Organised Crime Act, 1998; and 1.1.10.1.4. the Protection of Constitutional Democracy Against Terrorist Related Activities Act, 2004; 1.1.10.2. any other applicable law in any applicable jurisdiction (including any (i) statute, ordinance, rule or regulation; (ii) order of any court, tribunal or any other judicial body; and (iii) rule, regulation, guideline or order of any public body, or any other administrative requirement) which: 1.1.10.2.1. prohibits the conferring of any gift, payment or other benefit on any person or any officer, employee, agent or adviser of such person; and/or 1.1.10.2.2. was intended to enact the provisions of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 1997 or which has as its objective the prevention of corruption; 1.1.11. "Applicable ESG Standards" referenced throughout this Agreement from or after the SLL Classification Date, refers to the standards applicable to each KPI, if any, identified as such in Part I (Sustainability definitions) of Schedule 10 (Sustainability Schedule), as such standards may be amended or supplemented from time to time after the SLL Classification Date; 1.1.12. "Auditors" means BDO South Africa Inc, KPMG Inc, Ernst & Young Inc, PwC Inc or Deloitte Inc, or any other firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed); 1.1.13. "Authorisation" means an authorisation, consent, approval, resolution, licence, permit, exemption, filing, notarisation, lodgement or registration; 1.1.14. "Availability Period" means: 1.1.14.1. in respect of the Facility, the period from and including the Effective Date to and including the earlier of (i) the date falling 1 (one) Month (or such shorter period as the Agent (acting on the instructions of the Majority Lenders) may agree in writing) before the Termination Date; and (ii) the date on which the Facility is cancelled in full in terms of this Agreement; and 1.1.14.2. in respect of an Increased Commitment, the period commencing on (and including) the relevant Accordion Increase Effective Date and ending on (and including) the earlier of (i) the date which is 1 (one) Month (or such shorter period as the Agent (acting on the instructions of the Majority Lenders) may agree in writing) before the Termination Date and (ii) the date on which the Facility is cancelled in full in terms of this Agreement;
6 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.15. "Available Commitment" means a Lender's Commitment under the Facility minus: 1.1.15.1. the amount of its participation in any outstanding Loans; and 1.1.15.2. in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date, other than that Lender's participation in any Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date; 1.1.16. "Available Facility" means the aggregate for the time being of each Lender's Available Commitment; 1.1.17. "Baseline" means, in relation to a KPI, the baseline performance of the Group for such KPI and period as is set out in Part II (Sustainability Calculations) of Schedule 10 (Sustainability Schedule); 1.1.18. "Break Costs" means the amount (if any) by which: 1.1.18.1. the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period, exceeds: 1.1.18.2. the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Johannesburg Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period; 1.1.19. "Break Gains" means the amount (if any) by which the amount referred to in in sub-clause 1.1.18.2 of the definition of Break Costs exceeds the amount referred to in sub-clause 1.1.18.1 of the definition of Break Costs; 1.1.20. "Business Day" means a day (other than a Saturday, a Sunday or an official public holiday in South Africa within the meaning of the Public Holidays Act 1994) on which banks are open for general business in South Africa; 1.1.21. "Calculation Methodology" means, in relation to a KPI, the calculation methodology applicable to that KPI as set out in Part II (Sustainability Calculations) of Schedule 10 (Sustainability Schedule); 1.1.22. "Commitment" means: 1.1.22.1. in relation to the Original Lender, ZAR1,000,000,000 (one billion Rand) and the amount of any other Commitment assumed by it in accordance with Clause 2.2 (Accordion increase option); and 1.1.22.2. in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Accordion increase option), to the extent not cancelled, reduced or transferred in accordance with the terms of this Agreement;
7 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.23. "Compliance Certificate" means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate); 1.1.24. "Confidential Information" means all information relating to the Borrower, any Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as a Finance Party, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either: 1.1.24.1. any member of the Group or any of its advisers; or 1.1.24.2. another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers, in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes: 1.1.24.2.1. information that: 1.1.24.2.1.1. is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 35 (Confidential Information); or 1.1.24.2.1.2. is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or 1.1.24.2.1.3. is known by that Finance Party before the date the information is disclosed to it in accordance with sub-clauses 1.1.24.2.1.1 or 1.1.24.2.1.2 above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and 1.1.24.2.1.4. any Funding Rate; 1.1.25. "Confidentiality Undertaking" means a confidentiality undertaking substantially in the recommended form of the LMA or in any other form agreed between the Obligors' Agent and the Agent; 1.1.26. "Declassification Date" means the date on which the Agent (acting on the instructions of the Majority Lenders) exercises its right to declassify the Facility as "sustainability-linked" in accordance with sub-clause 21.22.1 of Clause 21.18 (Declassification Event and consequences);
8 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.27. "Declassification Event" means a failure by the relevant Parties to, agree the amendments referred to in sub-clause 34.4.2 of Clause 34.4 (Sustainability amendments) following the occurrence of a Sustainability Amendment Event, within the time periods, and otherwise in the manner, in each case, set out in that Clause; 1.1.28. "Default" means an Event of Default or any event or circumstance specified in Clause 22 (Events of Default) which would (with the expiry of any applicable grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default; 1.1.29. "Disruption Event" means either or both of: 1.1.29.1. a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or 1.1.29.2. the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: 1.1.29.2.1. from performing its payment obligations under the Finance Documents; or 1.1.29.2.2. from communicating with other Parties in accordance with the terms of the Finance Documents, 1.1.29.2.3. and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted; 1.1.30. "Effective Date" means the date on which the Agent gives the Borrower the written notice contemplated in clause 4.1 (Initial Conditions Precedent); 1.1.31. "Eligible Institution" means the Original Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower and which, in each case, is not a member of the Group; 1.1.32. "Environment" means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media: 1.1.32.1. air (including, without limitation, air within natural or man-made structures, whether above or below ground); 1.1.32.2. water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and 1.1.32.3. land (including, without limitation, land under water); 1.1.33. "Environmental Claim" means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law;
9 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.34. "Environmental Law" means any applicable law or regulation which relates to: 1.1.34.1. the pollution or protection of the Environment; 1.1.34.2. harm to or the protection of human health; 1.1.34.3. the conditions of the workplace; or 1.1.34.4. the generation, handling, storage, use, release, emission or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste; 1.1.35. "Environmental Permits" means any permit, license and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any Obligor conducted on or from the properties owned or used by any Obligor; 1.1.36. "Event of Default" means any event or circumstance specified as such in Clause 21.25 (Events of Default); 1.1.37. "External Reviewer" means any external reviewer as may be appointed from time to time by (and at the cost of) the Borrower, provided that it is: 1.1.37.1. a reputable and qualified external firm of independent auditors or environmental or other independent consultants with relevant expertise, which is licensed to practice in South Africa; and 1.1.37.2. not an Affiliate of the Borrower; 1.1.38. "Facility" means the revolving credit facility made available under this Agreement as described in Clause 2 (The Facility); 1.1.39. "Fee Letter" means: 1.1.39.1. any letter or letters dated on or about the Signature Date between the Original Lender and the Borrower setting out any of the fees referred to in Clause 11 (Fees); or 1.1.39.2. any agreement setting out fees payable to a Lender referred to in Clause 2.2 (Accordion increase option) or under any other Finance Document; 1.1.40. "Final Discharge Date" means the date on which all amounts of whatsoever nature under the Finance Documents are fully, finally and irrevocably discharged and the Lenders are under no obligation to provide finance or extend any other form of credit or financial accommodation to any person under the Finance Documents, as certified in writing by the Agent within 5 (five) Business Days of receipt of a request for confirmation from the Obligors’ Agent, if all the requirements above have in fact been met; 1.1.41. "Finance Document" means this Agreement, any Fee Letter, any Utilisation Request, any Accession Letter, any Resignation Letter, the Overdraft Facility Letter, any Accordion Increase Request, any Accordion Increase Confirmation and any other document designated as such by the Agent and the Obligors' Agent; 1.1.42. "Finance Party" means the Agent or a Lender;
10 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.43. "Financial Indebtedness" means any indebtedness for or in respect of: 1.1.43.1. moneys borrowed; 1.1.43.2. any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; 1.1.43.3. any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; 1.1.43.4. the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would in accordance with IFRS in force prior to 1 January 2019, have been treated as an operating lease); 1.1.43.5. receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); 1.1.43.6. any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other clause of this definition having the commercial effect of a borrowing; 1.1.43.7. any Treasury Transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of that derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account); 1.1.43.8. any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account); 1.1.43.9. any amount raised by the issue of shares which are redeemable; 1.1.43.10. any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and 1.1.43.11. the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in Clauses 1.1.43.1 to 1.1.43.10 above; 1.1.44. "Funding Rate" means any individual rate notified by a Lender to the Agent pursuant to Clause 10.3.1.2 of Clause 10.3 (Cost of Funds); 1.1.45. "Group" means the Borrower and each of its Subsidiaries for the time being; 1.1.46. "Group Structure Chart" means the diagram, in agreed form, reflecting the capital structure of the Group as at the Signature Date and delivered on or before the Effective Date; 1.1.47. "Guarantor" means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 23 (Changes to the Obligors);
11 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.48. “Guardrisk Cell Captive A170” means Guardrisk Insurance Company Limited (registration number 1992/001639/06), a company duly registered and incorporated with limited liability in accordance with laws of South Africa; 1.1.49. "HMT" means HM Treasury of the United Kingdom; 1.1.50. "Holding Company" means, in relation to a person, any other person in respect of which it is a Subsidiary; 1.1.51. "IFRS" means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements; 1.1.52. "Increase Confirmation" means a confirmation substantially in the form set out in Part II of Schedule 7 (Form of Increase Confirmation); 1.1.53. "Increased Commitment" has the meaning given to this term in Clause 2.2.2; 1.1.54. "Interest Period" means, in relation to a Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest); 1.1.55. "Interpolated Screen Rate" means, in relation to any Loan, the rate (rounded to the same number of decimal places as the Screen Rate) which results from interpolating on a linear basis between: 1.1.55.1. the Screen Rate for the longest period (for which the Screen Rate is available) which is less than the Interest Period of that Loan; and 1.1.55.2. the Screen Rate for the shortest period (for which the Screen Rate is available) which exceeds the Interest Period of that Loan, each as of the 11am (Johannesburg time) for ZAR on the Quotation Date; 1.1.56. "JIBAR" means, in relation to any Loan the applicable Screen Rate: 1.1.56.1. as of the 11am (Johannesburg time) on the Quotation Date for the offering of deposits in ZAR for a period equal in length to the Interest Period of the relevant Loan; or 1.1.56.2. as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate); and if, in either case, that rate is less than zero, then JIBAR shall be deemed to be zero; 1.1.57. "Johannesburg Market" means the South African interbank market; 1.1.58. "Joint Venture" means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity comprising an association of two or more persons to undertake a business enterprise through a combination of assets and/or expertise; 1.1.59. "JSE Limited" means the Johannesburg Stock Exchange Limited (Registration No. 2005/022939/06) a public company with limited liability incorporated in accordance with the company laws of South Africa and a licensed financial exchange in terms of the Financial Markets Act, 2012; 1.1.60. "JSE Listings Requirements" means the listings requirements published by the JSE Limited, as amended from time to time;
12 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.61. "KPI" means a key performance indicator calculated in accordance with the relevant Calculation Methodology, outlined in Part II (Sustainability Calculations) of Schedule 10 (Sustainability Schedule); 1.1.62. "Lender" means: 1.1.62.1. the Original Lender; and 1.1.62.2. any other entity which has become a Party as a "Lender" in accordance with Clause 24 (Changes to the Lenders), which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement; 1.1.63. "LMA" means the Loan Market Association; 1.1.64. "Loan" means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan; 1.1.65. "Majority Lenders" means a Lender or Lenders whose Commitments aggregate more than 662/3% of the Commitments (or, if the Commitments have been reduced to zero, aggregated more than 662/3% of the Commitments immediately prior to that reduction); 1.1.66. "Margin" means, subject to adjustment in accordance with Clause 8.4 (Margin adjustment) and Clause 8.5 (Sustainability Margin Adjustment); 1.1.66.1. in relation to any Loan with an Interest Period of 1 (one) Month, 1.5779% (one point five seven seven nine percent) per annum; 1.1.66.2. in relation to any Loan with an Interest Period of 3 (three) Months, 1.58% (one point five eight percent) per annum; 1.1.67. "Material Adverse Effect" means a material adverse effect on: 1.1.67.1. the business, operations, property, condition (financial or otherwise) or prospects of the Borrower or the Group as a whole; 1.1.67.2. the ability of any Obligor to perform any of its obligations under the Finance Documents; or 1.1.67.3. the validity or enforceability of any of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents; 1.1.68. "Material Company" means, at any time: 1.1.68.1. the Borrower; 1.1.68.2. an Original Guarantor; or 1.1.68.3. a Material Subsidiary; 1.1.69. "Material Subsidiary" means, at any time, a Subsidiary of the Borrower which has: 1.1.69.1. earnings before interest, tax, depreciation and amortisation (calculated on the same basis as EBITDA) representing 10% of more of the EBITDA; or
13 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.69.2. gross tangible assets (excluding intra-group items) representing 10% (ten percent) or more of the gross tangible assets of the Group, calculated on a consolidated basis; 1.1.70. "Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that: 1.1.70.1. (subject to Clause 1.1.70.3 below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day; 1.1.70.2. if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and 1.1.70.3. if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end; The above rules will only apply to the last Month of any period; 1.1.71. "NYSE" means the New York Stock Exchange; 1.1.72. "Obligor" means the Borrower or a Guarantor and "Obligors" means, as the context requires, all of them; 1.1.73. "Obligors’ Agent" means the Borrower, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to Clause 2.3 (Obligors’ Agent); 1.1.74. "OFAC" means the Department of the Treasury's Office of Foreign Assets Control of the United States of America; 1.1.75. "Original Financial Statements" means: 1.1.75.1. in relation to the Borrower, the audited consolidated financial statements of the Group for the financial year ended 2023; and 1.1.75.2. in relation to each Original Obligor other than the Borrower, its audited financial statements for its financial year ended 2023; 1.1.76. "Original Jurisdiction" means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the Signature Date, or, in the case of an Additional Guarantor, as at the date on which that Additional Guarantor becomes Party as a Guarantor; 1.1.77. "Original Obligor" means the Borrower or an Original Guarantor; 1.1.78. "Overdraft Facility Letter" means the letter agreement entered into on 28 June 2024, pursuant to which the Original Lender makes an unsecured overdraft facility in an aggregate principal amount of ZAR500,000,000 (five hundred million Rand) available to the Borrower; 1.1.79. "Party" means a party to this Agreement; 1.1.80. "Permitted Acquisition" means: 1.1.80.1. an acquisition by any member of the Group that is not an Obligor from another member of the Group that is not an Obligor;
14 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.80.2. an acquisition by any Obligor from any other Obligor; 1.1.80.3. an acquisition conducted in the ordinary course of trading by any member of the Group; 1.1.80.4. any other acquisition which is not classified as a "Category 1 Transaction" in relation to the Borrower in terms of the JSE Listings Requirements; or 1.1.80.5. any acquisition in respect of which the prior written consent of the Majority Lenders has been obtained; 1.1.81. "Permitted Disposal" means any sale, lease, licence, transfer or other disposal: 1.1.81.1. of trading stock or cash made by any member of the Group in the ordinary course of trading of the disposing party; 1.1.81.2. as a result of the enforcement of Permitted Security; 1.1.81.3. of assets in exchange for other assets comparable or superior as to type, value and quality; 1.1.81.4. of obsolete or redundant vehicles, property, plant and equipment for cash; 1.1.81.5. by any member of the Group that is not an Obligor to another member of the Group that is not an Obligor; 1.1.81.6. by any Obligor to any other Obligor; 1.1.81.7. of assets (other than shares) for cash where the higher of the market/book value and net consideration receivable (when aggregated with the higher of the market/book value and net consideration receivable for any other sale, lease, license, transfer or other disposal not allowed under the preceding clauses) does not exceed ZAR250,000,000 (two hundred and fifty million Rand) (or its equivalent) in any financial year; or 1.1.81.8. made with the prior written consent of the Majority Lenders; 1.1.82. "Permitted Financial Indebtedness" means any Financial Indebtedness: 1.1.82.1. arising under any Finance Document; 1.1.82.2. arising under a Permitted Loan, a Permitted Guarantee or a Permitted Treasury Transaction; 1.1.82.3. of any entity acquired by a member of the Group pursuant to a Permitted Acquisition after the Effective Date which is incurred under arrangements in existence at the date of acquisition, but not incurred or increased or having its maturity date extended in contemplation of, or since, that acquisition, and outstanding only for a period of 3 (three) Months following the date of acquisition; 1.1.82.4. arising under operating leases of buildings which are entered into in the ordinary course of business and are classified as Finance Leases under IFRS;
15 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.82.5. arising in respect of any deposits or prepayments received by a member of the Group from one of its customers in respect of services provided or to be provided or goods supplied or to be supplied by that member of the Group to that customer; 1.1.82.6. arising under Finance Leases of vehicles, plant, equipment or computers; provided that the aggregate capital value of all such items so leased under outstanding leases by members of the Group does not exceed ZAR50,000,000 (fifty million Rand) (or its equivalent in any other currencies) at any time before the Final Discharge Date; 1.1.82.7. arising under any trade credit in the ordinary course of trading activities, on the creditor’s standard or usual terms and which has a credit term of not more than 90 (ninety) days; 1.1.82.8. not permitted by the preceding paragraphs of this definition, the outstanding principal amount of which does not exceed ZAR250,000,000 (two hundred and fifty million Rand) (or its equivalent in any other currencies) in aggregate for the Group at any time; or 1.1.82.9. not permitted by the preceding paragraphs of this definition and incurred with the prior written consent of the Majority Lenders; 1.1.83. "Permitted Guarantee" means: 1.1.83.1. the endorsement of negotiable instruments in the ordinary course of trade; 1.1.83.2. any guarantee, standby letters of credit, bonds or other like instruments (or any indemnities given to an issuing bank in connection with such guarantees, standby letters of credit, bonds or other like instruments) arising under the Finance Documents; 1.1.83.3. any performance or similar bond, indemnity or counter guarantee guaranteeing performance by a member of the Group under any contract entered into in the ordinary course of trade by another member of the Group; 1.1.83.4. any indemnity or counter-indemnity given by the Borrower or any Obligor to Guardrisk Cell Captive A170, The Standard Bank of South Africa Limited or the Original Lender in respect to any guarantee that Guardrisk Cell Captive A170, The Standard Bank of South Africa Limited or the Original Lender has issued or may issue in the future in respect of actual or potential environmental claims against the Group; 1.1.83.5. any guarantee, standby letter of credit, bonds or other like instruments permitted under sub-clause 21.12.2 of Clause 21.12 (Financial Indebtedness); 1.1.83.6. any guarantee comprising a netting or set-off arrangement entered into by an Obligor with any bank or financial institution in the ordinary course of its banking arrangements for the purposes of netting debit and credit balances of other members of the Group with that bank or financial institution; or 1.1.83.7. any other guarantee not permitted by the preceding paragraphs of this definition and issued with the prior written consent of the Majority Lenders;
16 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.84. "Permitted Joint Venture" means any investment in any Joint Venture: 1.1.84.1. to which any member of the Group is a member as at the Signature Date; 1.1.84.2. that is incorporated or established after the Signature Date, provided that it carries on its principle business in South Africa and any Financial Indebtedness incurred, loan made or guarantee issued in relation thereto is Permitted Financial Indebtedness, a Permitted Loan or a Permitted Guarantee, as applicable; or 1.1.84.3. in respect of which the prior written consent of the Majority Lenders has been obtained; 1.1.85. "Permitted Loan" means: 1.1.85.1. any loan made by an Obligor to another Obligors; 1.1.85.2. any loan made by a member of the Group that is not an Obligor to another member of the Group that is not an Obligor; 1.1.85.3. any credit balance held in the ordinary course of a member of the Group’s banking arrangements with any bank listed under the heading "South African banks" in Schedule 9 (Permitted transferees); 1.1.85.4. any loan made that may result from the sweeping of internally generated cash, Excluded Disposal Proceeds or Excluded Insurance Proceeds to the central treasury function of the Group; 1.1.85.5. any trade credit extended by any Obligor to its customers on normal commercial terms and in the ordinary course of its trading activities and which has a credit term of not more than 90 (ninety) days; and 1.1.85.6. deposits required to be made with any municipality, utility provider or other supplier of goods or services, and made by a member of the Group in the regular and ordinary course of business; 1.1.85.7. any loan not permitted by the preceding paragraphs of this definition, the outstanding principal amount of which does not exceed ZAR250,000,000 (two hundred and fifty million Rand) (or its equivalent in any other currencies) in aggregate for Obligors at any time before the Final Discharge Date 1.1.85.8. any loans or credit not permitted by the preceding paragraphs of this definition in respect of which the prior written consent of the Majority Lenders has been obtained writing; 1.1.86. "Permitted Security" means any of the following Security or (as the case may be) Quasi-Security listed below: 1.1.86.1. any Security or Quasi-Security created pursuant to any Finance Document; 1.1.86.2. any Security created prior to the Signature Date which: 1.1.86.2.1. is disclosed in the Original Financial Statements of the Borrower delivered to the Majority Lenders prior to the Signature Date; and
17 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.86.2.2. in all circumstances secures only indebtedness outstanding or a facility available at the Signature Date if the principal amount or original facility thereby secured is not increased after the Signature Date; 1.1.86.3. any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances; 1.1.86.4. any lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any member of the Group; 1.1.86.5. any payment or close-out netting or set-off arrangement pursuant to any Treasury Transaction or foreign exchange transaction entered into by a member of the Group which constitutes Permitted Financial Indebtedness or a Permitted Treasury Transaction; 1.1.86.6. any Security or Quasi-Security arising under: 1.1.86.6.1. any lease or hire purchase contract, a liability under which would, in accordance with IFRS, be treated as a balance sheet liability other than a lease or hire purchase contract which would, in accordance with IFRS in force prior to 1 January 2019, have been treated as an operating lease; 1.1.86.6.2. any retention of title, hire purchase or conditional sale arrangement or arrangements having a similar effect in respect of goods supplied to an Obligor in the ordinary course of trading and on the supplier's standard or usual terms, and not as a result of any default or omission by that Obligor, which, in each case, qualifies as Permitted Financial Indebtedness; 1.1.86.7. any Security over goods and documents of title to goods under documentary credit transactions entered into in the ordinary course of trading; 1.1.86.8. any Security over or affecting any asset acquired by a member of the Group after the Signature Date if: 1.1.86.8.1. the Security was not created in contemplation of the acquisition of that asset by a member of the Group; 1.1.86.8.2. the principal amount secured has not been increased in contemplation of, or since the acquisition of that asset by a member of the Group; and 1.1.86.8.3. the Security is removed or discharged within 3 (three) Months of the date of acquisition of such asset;
18 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.86.9. any Security or Quasi-Security over or affecting any asset of any company which becomes a member of the Group after the Signature Date, where the Security or Quasi-Security is created prior to the date on which that company becomes a member of the Group, if: 1.1.86.9.1. the Security or Quasi-Security was not created in contemplation of the acquisition of that company; 1.1.86.9.2. the principal amount secured has not increased in contemplation of or since the acquisition of that company; and 1.1.86.9.3. the Security or Quasi-Security is removed or discharged within 3 (three) Months of that company becoming a member of the Group; 1.1.86.10. all amounts secured in favour of Guardrisk Cell Captive A170 from time to time for guarantees issued on behalf of any member of the Group by Guardrisk Cell Captive A170 related to environmental claims; 1.1.86.11. all amounts standing to the credit of a trust account or in respect of disputes secured in favour of Guardrisk Cell Captive A170, The Standard Bank of South Africa Limited or the Original Lender from time to time for guarantees issued by Guardrisk Cell Captive A170, The Standard Bank of South Africa Limited or the Original Lender on behalf of any member of the Group; or 1.1.86.12. any Security or Quasi-Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security or Quasi- Security given by any member of the Group other than any permitted under sub-clauses 1.1.86.1 to 1.1.86.10) does not exceed ZAR250,000,000 (two hundred and fifty million Rand) (or its equivalent in another currency or currencies); 1.1.87. "Permitted Transferee" means a persons identified in Schedule 9 (Permitted Transferees); 1.1.88. "Permitted Treasury Transaction" means: 1.1.88.1. any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group and not for speculative purposes; and 1.1.88.2. any other Treasury Transaction entered into with the prior written consent of the Majority Lenders; 1.1.89. "Quasi-Security" means any arrangement or transaction described in Clause 21.3.2; 1.1.90. "Quotation Day" means, in relation to any period for which an interest rate is to be determined, the first day of that period unless market practice differs in the Johannesburg Market, in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Johannesburg Market (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days);
19 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.91. "Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund; 1.1.92. "Relevant Jurisdiction" means, in relation to an Obligor: 1.1.92.1. its Original Jurisdiction; and 1.1.92.2. any jurisdiction where it conducts its business; 1.1.93. "Repeating Representations" means each of the representations set out in Clause 18.1 (Status) to Clause 18.6 (Governing law and enforcement), Clause 18.9 (No default), Clause 18.10.3 of Clause 18.10 (No misleading information), Clause 18.11 (Financial Statements), Clause 18.12 (Pari passu ranking); 1.1.94. "Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian appointed by the Agent; 1.1.95. "Resignation Letter" means a letter substantially in the form set out in Schedule 5 (Form of Resignation Letter); 1.1.96. "Rollover Loan" means one or more Loans: 1.1.96.1. made or to be made on the same day that a maturing Loan is due to be repaid; 1.1.96.2. the aggregate amount of which is equal to or less than the amount of the maturing Loan; and 1.1.96.3. for the purpose of refinancing a maturing Loan; 1.1.97. "Sanctionable Activity" means any activity that, if engaged in by a person, could result in that person breaching, or a designation of that person under, any Sanctions; 1.1.98. "Sanctioned Territory" means a country, region or territory that is the subject of country-wide, region-wide or territory-wide Sanctions; 1.1.99. "Sanctions" means the economic or financial sanctions laws, regulations, trade embargoes or other restrictive measures enacted, administered, implemented and/or enforced from time to time by any of the following (and including through any relevant Sanctions Authority): 1.1.99.1. the United Nations; 1.1.99.2. the European Union; 1.1.99.3. the government of the United States of America; 1.1.99.4. the government of the United Kingdom; 1.1.99.5. the government of South Africa; and 1.1.99.6. any country in which any member of the Group is incorporated or in, from or to which it conducts its business;
20 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.100. "Sanctions Authority" means any agency or person which is duly appointed, empowered or authorised to enact, administer, implement and/or enforce Sanctions, including (without limitation): 1.1.100.1. OFAC; 1.1.100.2. the United States Department of State or the United States Department of Commerce; and 1.1.100.3. HMT; 1.1.101. "Sanctions List" means any of the lists of designated sanctions targets maintained by a Sanctions Authority from time to time, including (without limitation) as at the date of this Agreement: 1.1.101.1. in the case of OFAC: 1.1.101.1.1. the Specially Designated Nationals and Blocked Persons List; and 1.1.101.1.2. the Consolidated Sanctions List; and 1.1.101.2. in the case of the United States Department of State or the United States Department of Commerce: 1.1.101.2.1. the Denied Persons List; 1.1.101.2.2. the List of Statutorily Debarred Parties; 1.1.101.2.3. the Entity List; and 1.1.101.2.4. the Terrorist Exclusion List; 1.1.101.3. in the case of HMT: 1.1.101.3.1. the Consolidated List of Financial Sanctions Targets; and 1.1.101.3.2. the List of Persons Subject to Restrictive Measures in View of Russia's Actions Destabilising the Situation in Ukraine; and 1.1.101.4. in the case of the European Union, the Consolidated List of Persons, Groups and Entities Subject to EU Financial Sanctions; 1.1.102. "Sanctions Restricted Person" means a person that is: 1.1.102.1. listed on a Sanctions List, or directly or indirectly owned, or otherwise controlled by any one or more persons listed on a Sanctions List; 1.1.102.2. located or resident in, or incorporated or organised under the laws of, a Sanctioned Territory; or 1.1.102.3. otherwise a subject of Sanctions (where "subject to Sanctions" includes any person with whom a US national or other person who is subject to the authority of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities);
21 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.103. "Screen Rate" means the mid market rate for deposits in ZAR for the relevant period before any correction, recalculation or republication by the administrator which appears on the Reuters Screen SAFEY Page alongside the caption “YIELD” at the applicable time (or any replacement Reuters page which displays that rate, or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters). If such page or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower; 1.1.104. "Security" means a mortgage bond, notarial bond, cession in security, charge, pledge, hypothec, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect; 1.1.105. "Signature Date" means the date of the signature of the Party last signing this Agreement in time; 1.1.106. "SLL Classification Date" has the meaning given to this term in Clause 2.3.2; 1.1.107. "SLL Reference Period" means each financial year of the Borrower, being each period of 12 (twelve) calendar months ending on 30 June in any year that ends after the SLL Classification Date; 1.1.108. "SLLP" means the Sustainability-Linked Loan Principles published by the LMA from time to time; 1.1.109. "South Africa" means the Republic of South Africa; 1.1.110. "SPT" means, in relation to each KPI and each SLL Reference Period, the sustainability performance target set out under the heading SPTs in Part III (Sustainability Calculations) of Schedule 10 (Sustainability Schedule); 1.1.111. "Subsidiary" means a “subsidiary” as defined in the Companies Act 2008 and shall include any person who would, but for not being a “company” under the Companies Act 2008, qualify as a “subsidiary” as defined in the Companies Act 2008; 1.1.112. "Sustainability Amendment Event" means any of the following: 1.1.112.1. the: 1.1.112.1.1. sale, lease, transfer or other disposal of an asset; 1.1.112.1.2. acquisition of a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them); or 1.1.112.1.3. entry into of any amalgamation, demerger, merger, consolidation or corporate restructuring, by a member of the Group which, in each case, could reasonably be expected to materially affect any KPI and/or any SPT; 1.1.112.2. the delivery of a Verification Report for any SLL Reference Period that includes details of any information and/or changes referred to in sub-clause 19.10.3.2 of Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report) as a result of which a KPI or SPT can no longer be calculated;
22 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.112.3. the Agent (acting on the instructions of the Majority Lenders) or the Borrower, in each case, acting reasonably and having regard to the Group’s business lines and the then current market standards and best industry practice, determines that any KPI is no longer or will in future no longer be appropriate for the purpose of defining and steering the sustainability strategy of the Group; 1.1.112.4. the Borrower notifies the Agent that one or more of the SPTs can, at the time of the determination or will in future, no longer be measured or reported and provides supporting evidence to the Agent to demonstrate such determination; 1.1.112.5. the Borrower notifies the Agent of the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the Signature Date, compliance with which will materially impact the ability of the Borrower to measure, report on or comply with any KPI ro SPT; 1.1.112.6. the Borrower, acting reasonably and having regard to the Group’s business lines and the then current market standards and best industry practice, determines that the methodology for calculating, assuring or reporting of the performance of any SPT has materially changed or will materially change, or the ability to report on the SPT is impaired or will be impaired and provides supporting evidence to the Agent to demonstrate such determination; and/or 1.1.112.7. the occurrence of any other external event which, in the view of the Agent (acting on the instructions of the Lenders) or the Borrower, in each case, acting reasonably, could lead to a result that materially differs from the performance of any SPTs at the end of the most recent SLL Reference Period, when applying the same methodology for calculating the performance of that SPT; 1.1.113. "Sustainability Breach" means: 1.1.113.1. an Obligor does not comply with any Sustainability Provision, provided that no Sustainability Breach will occur under this sub- clause 1.1.113.1 if the failure to comply is capable of remedy and is remedied within 20 (twenty) Business Days of the earlier of: (i) the Agent giving notice to the Borrower or relevant Obligor and (ii) the Borrower or an Obligor becoming aware of the failure to comply; or 1.1.113.2. the representation made by an Obligor in relation to Sustainability Information pursuant to subclause 18.10.4 of Clause 18.10 (No misleading information) is or proves to have been incorrect or misleading when made or deemed to be made and, if the non- compliance or circumstances giving rise to the misrepresentation are capable of remedy, it is not remedied within 20 (twenty) Business Days of the earlier of: (i) the Agent giving notice to the Borrower or relevant Obligor and (ii) the Borrower or an Obligor becoming aware of the misrepresentation; 1.1.114. "Sustainability Compliance Certificate" means a certificate substantially in the form set out in Part III (Form of Sustainability Compliance Certificate) of Schedule 10 (Sustainability Schedule); 1.1.115. "Sustainability Compliance Certificate Inaccuracy" has the meaning given to that term in 19.11 (Sustainability Compliance Certificate Inaccuracy);
23 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.116. "Sustainability Framework" means a framework document that sets out specified key performance indicators with respect to certain environmental, social and governance goals and objectives of the Group and which includes the specific KPIs and SPTs and which framework has been adopted by the board of directors of the Borrower; 1.1.117. "Sustainability Information" means all information (including sustainability performance projections and forecasts) which has been: 1.1.117.1. provided by or on behalf of a member of the Group to a Finance Party; or 1.1.117.2. approved by any member of the Group, solely in connection with, and to the extent it relates to, any Sustainability Compliance Certificate, any Sustainability Report, any Verification Report, a KPI, a SPT, a Calculation Methodology, a Baseline, the development of the Sustainability Framework; 1.1.118. "Sustainability Margin Adjustment" has the meaning given to that term in Clause 8.5 (Sustainability Margin Adjustment); 1.1.119. "Sustainability Margin Adjustment Date" has the meaning given to that term in Clause 8.5 (Sustainability Margin Adjustment); 1.1.120. "Sustainability Provisions" means each of subclause 18.10.4 of Clause 18.10 (No misleading information), Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report) to Clause 19.12 (Sustainability Information) (inclusive) and Clause 34.4 (Sustainability amendments). 1.1.121. "Sustainability Report" has the meaning given to that term in Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report); 1.1.122. "Verification Report" has the meaning given to that term in Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report); 1.1.123. "Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same); 1.1.124. "Treasury Transaction" means any derivative transaction entered into by any member of the Group in connection with protection against or benefit from fluctuations in any rate, price, index or credit rating (including, without limitation, in relation to commodities and currency); 1.1.125. "Termination Date" means the date falling 60 (sixty) Months after the Effective Date (or such later date as the Agent and the Borrower may agree in writing); 1.1.126. "Transfer" has the meaning given to this term in Clause 24.1.1; 1.1.127. "Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents; 1.1.128. "Utilisation" means a utilisation of the Facility; 1.1.129. "Utilisation Date" means the date of a Utilisation, being the date on which the relevant Loan is to be made;
24 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.1.130. "Utilisation Request" means a notice substantially in the form set out in Schedule 3 (Requests); 1.1.131. "VAT" means (i) any value added tax as provided for in the Value Added Tax Act, 1991, (ii) any general service tax and (iii) any other tax of a similar nature; and 1.1.132. "ZAR" or "Rand" means South African Rand, the lawful currency of South Africa. 1.2. Construction 1.2.1. Unless a contrary indication appears, any reference in this Agreement to: 1.2.1.1. the "Agent", any "Finance Party", any "Lender", any "Obligor" or any "Party", or any other person shall be construed so as to include its successors in title, permitted cessionaries and permitted transferees to, or of, its rights and/or obligations under the Finance Documents; 1.2.1.2. a document in "agreed form" is a document which is previously agreed in writing by or on behalf of the Obligors' Agent and the Agent or, if not so agreed, is in the form specified by the Agent; 1.2.1.3. "assets" includes present and future properties, revenues and rights of every description; 1.2.1.4. "authority" includes any court or any governmental, intergovernmental or supranational body, agency, department or any regulatory, self-regulatory or other authority; 1.2.1.5. a "Finance Document" or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated; 1.2.1.6. a "group of Lenders" includes all the Lenders; 1.2.1.7. "guarantee" means (other than in Clause 17 (Guarantee and indemnity)) any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness; 1.2.1.8. the use of the word "including" followed by specific examples will not be construed as limiting the meaning of the general wording preceding it, and the eiusdem generis rule must not be applied in the interpretation of such general wording or such specific examples; 1.2.1.9. "indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; 1.2.1.10. a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
25 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.2.1.11. a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation; 1.2.1.12. a provision of law is a reference to that provision as amended or re- enacted; and 1.2.1.13. a time of day is a reference to Johannesburg time. 1.2.2. The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement. 1.2.3. Section, Clause and Schedule headings are for ease of reference only. 1.2.4. Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. 1.2.5. A Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived. 1.2.6. A Sustainability Breach is "continuing" if it has not been remedied or waived. 1.2.7. If any provision in a definition is a substantive provision conferring rights or imposing obligations on any Party, notwithstanding that it appears only in an interpretation clause, effect shall be given to it as if it were a substantive provision of the relevant Finance Document. 1.2.8. Unless inconsistent with the context, an expression in any Finance Document which denotes the singular includes the plural and vice versa. 1.2.9. The Schedules to any Finance Document form an integral part thereof and a reference to a "Clause" or a "Schedule" is a reference to a clause of, or a schedule to, this Agreement. 1.2.10. The rule of construction that, in the event of ambiguity, a contract shall be interpreted against the party responsible for the drafting thereof, shall not apply in the interpretation of the Finance Documents. 1.2.11. The expiry or termination of any Finance Documents shall not affect those provisions of the Finance Documents that expressly provide that they will operate after any such expiry or termination or which of necessity must continue to have effect after such expiry or termination, notwithstanding that the clauses themselves do not expressly provide for this. 1.2.12. The Finance Documents shall to the extent permitted by applicable law be binding on and enforceable by the administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators of the Parties as fully and effectually as if they had signed the Finance Documents in the first instance and reference to any Party shall be deemed to include such Party’s administrators, trustees, permitted cessionaries, business rescue practitioners or liquidators, as the case may be. 1.2.13. Where figures are referred to in numerals and in words in any Finance Document, if there is any conflict between the two, the words shall prevail.
26 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 1.2.14. Notwithstanding anything to the contrary contained in this Agreement or any other Finance Document, until the date of the first Transfer (if applicable): 1.2.14.1. all references to the Agent shall be read and construed as references to the Original Lender; and 1.2.14.2. all duties, obligations and responsibilities of the Agent in terms of the Finance Documents shall be performed by the Original Lender and all rights, powers, authorities and discretions of the Agent shall be exercised by the Original Lender. 1.2.15. Unless a contrary indication appears, where any number of days is to be calculated from a particular day, such number shall be calculated as including that particular day and excluding the last day of such period. 1.3. Third party rights 1.3.1. Except as expressly provided for in this Agreement or in any other Finance Document, no provision of any Finance Document constitutes a stipulation for the benefit of any person who is not a party to that Finance Document. 1.3.2. Notwithstanding any term of any Finance Document, the consent of any person who is not a party to that Finance Document is not required to rescind or vary that Finance Document at any time except to the extent that the relevant variation or rescission (as the case may be) relates directly to the right conferred upon any applicable third party under a stipulation for the benefit of that party that has been accepted by that third party. 1.4. Conflicts between Finance Documents The terms of the Finance Documents are subject to the terms of this Agreement and, in the event of any conflict between any provision of this Agreement and any provision of any other Finance Document, the provisions of this Agreement shall prevail. 2. THE FACILITY 2.1. The Facility Subject to the terms of this Agreement, the Lenders make available to the Borrower a ZAR revolving credit facility in an aggregate amount equal to the Commitment. 2.2. Accordion increase option 2.2.1. The Borrower may by giving prior notice to the Agent at any time during the Availability Period, request that the Commitments be increased by an aggregate amount of up to ZAR500,000,000 (five hundred million Rand) (the "Aggregate Accordion Increase Amount") by delivering an Accordion Increase Request to the Agent (which Accordion Increase Request shall be notified to the Lenders) and each Lender shall: 2.2.1.1. be entitled, but not obliged, to make the increased Commitment requested available; and 2.2.1.2. be obliged to facilitate an accession by an Eligible Institution solicited by the Borrower, to the extent it does not wish to make the Increased Commitment available, in each case, on the terms set out in this Clause 2.2.
27 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 2.2.2. Any increase in the Commitments made available by one or more Eligible Institutions (each, an "Increased Commitment") is subject to the following conditions being met: 2.2.2.1. the increased Commitments will be assumed by one or more Eligible Institutions (each an "Increase Lender") each of which confirms, in writing, (whether in the relevant Increase Confirmation or otherwise) the extent of its willingness to assume the obligations of a Lender corresponding to the Increased Commitment which it is to assume, as if it had been an Original Lender in respect of the Increased Commitment; 2.2.2.2. each of the Obligors and any Increase Lender shall assume such obligations towards one another and/or acquire such rights against one another as they would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the Increased Commitments which it is to assume; 2.2.2.3. each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as they would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume; 2.2.2.4. the existing Commitment of the other Lenders (or in the case of the Original Lender, its existing Commitment) shall continue in full force and effect; 2.2.2.5. the Agent receives the Accordion Increase Request no less than 20 (twenty) Business Days before the proposed Accordion Increase Effective Date; 2.2.2.6. no Default or Event of Default has occurred and is continuing or would result from the proposed increase in the Facility; and 2.2.2.7. any Increased Commitment relating to the Facility shall, subject to payment of (or an undertaking by the Borrower to pay) the costs, expenses and fees applicable to the Increased Commitment, take effect on the date specified by the Borrower in the notice referred to above or any later date on which the Agent and the Borrower executes an otherwise duly completed Increase Confirmation delivered to it by the relevant Increase Lender (each, an "Accordion Increase Effective Date"). 2.2.3. The Agent shall, subject to Clause 2.2.4 below, as soon as reasonably practicable after receipt by it of a duly completed Increase Confirmation appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Increase Confirmation. 2.2.4. The Agent shall only be obliged to execute an Increase Confirmation delivered to it by an Increase Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender.
28 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 2.2.5. Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the Accordion Increase Effective Date and that it is bound by that decision to the same extent as it would have been had it been an Original Lender. 2.2.6. No Lender shall have any obligation to make any Increased Commitment available. 2.2.7. The Borrower shall pay (i) promptly on demand, the Agent the amount of all costs and expenses (including legal fees) reasonably incurred in relation to the Increased Commitment; and (ii) the fee payable in accordance with Clause 11.4 at the time and in the manner provided in that clause. 2.2.8. Neither the Agent nor any Lender shall have any obligation to find an Increase Lender and in no event shall any Lender whose Commitment is replaced by an Increase Lender be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents. 2.2.9. Provided the Increased Commitment requested does not, in aggregate exceed the Aggregate Accordion Increase Amount, the Borrower may exercise the option in this Clause 2.2 twice, provided that the it shall not be entitled to exercise the option in this Clause 2.2 at any time after the date that is 6 (six) Months before the Termination Date or more than once in any period of 6 (six) Months. 2.2.10. Clause 24.3 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: 2.2.10.1. an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase; 2.2.10.2. the "New Lender" were references to that "Increase Lender"; and 2.2.10.3. a "re-Transfer" is a reference to a "transfer". 2.3. Option for future implementation of "sustainability-linked" provisions 2.3.1. At any time prior to the date that falls 18 (eighteen) Months after the Effective Date, the Borrower (having consulted with the Agent) may propose an amendment to this Agreement (such amendment, the "ESG Amendment") solely for the purpose of incorporating specific KPIs, SPTs, Sustainability Margin Adjustments and other related provisions aimed at incentivising the Group (and/or penalising failure by the Group) to measure and comply with Applicable ESG Standards into this Agreement). 2.3.2. As soon as possible after the date on which the Agent (acting on the instruction of all the Lenders) and the Borrower have agreed the ESG Amendment and recorded the ESG Amendment in an updated form of Schedule 10 (Sustainability Schedule), the Agent shall (i) issue the updated and agreed form of Schedule 10 (Sustainability Schedule) to all the Parties; and (ii) confirm in writing that the Facility is classified as "sustainability-linked" (the date of such confirmation, the "SLL Classification Date"). 2.3.3. With effect from the SLL Classification Date the ESG Amendment shall be incorporated in and form part of this Agreement.
29 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 2.3.4. Each party to this Agreement agrees and confirms that the Facility is not and shall not be a "sustainability-linked" credit instrument, unless and until the SLL Classification Date. 2.4. Obligors’ Agent 2.4.1. Each Obligor (other than the Borrower) by its execution of this Agreement or an Accession Letter irrevocably appoints the Borrower (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises: 2.4.1.1. the Borrower on its behalf to supply all information concerning itself contemplated by this Agreement to the Agent and to give all notices and instructions (including, in the case of the Borrower, the Utilisation Requests), to execute on its behalf any Accession Letter, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and 2.4.1.2. the Agent to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Borrower, and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, the Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication. 2.4.2. Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors’ Agent or given to the Obligors’ Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors’ Agent and any other Obligor, those of the Obligors’ Agent shall prevail. 2.4.3. The respective liabilities of each of Obligor under the Finance Documents shall not be in any way affected by: 2.4.3.1. any actual or purported irregularity in any act done, or failure to act, by the Obligors’ Agent; 2.4.3.2. the Obligors’ Agent acting (or purporting to act) in any respect outside any authority conferred upon it by any Obligor; or 2.4.3.3. any actual or purported failure by, or inability of, the Obligors’ Agent to inform any Obligor of receipt by it of any notification under the Finance Documents. 2.5. Finance Parties' rights and obligations 2.5.1. The obligations of each Finance Party under the Finance Documents are separate and independent. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
30 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 2.5.2. The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with Clause 2.5.3 below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Party’s participation in the Facility or its role under a Finance Document (including any such amount payable to the Agent on its behalf) is a debt owing to that Finance Party by that Obligor. 2.5.3. A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents. 3. PURPOSE 3.1. Purpose The Borrower shall apply all amounts borrowed by it under the Facility towards: 3.1.1. funding the general corporate and working capital requirements of the Group; 3.1.2. funding the capital expenditure of the Group; and 3.1.3. payment of any fees, costs and expenses (including legal fees) then due and payable by the Borrower under this Agreement. 3.2. Monitoring No Finance Party shall be bound to monitor or verify the application of any amount borrowed pursuant to this Agreement. 4. CONDITIONS OF UTILISATION 4.1. Initial conditions precedent The Borrower may not deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied. 4.2. Further conditions precedent The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if on the date of the Utilisation Request and on the proposed Utilisation Date: 4.2.1. in the case of a Rollover Loan, no Event of Default has occurred and is continuing or would result from the proposed Loan and, in the case of any other Loan, no Default has occurred and is continuing or would result from the proposed Loan; and 4.2.2. the Repeating Representations to be made by each Obligor are true in all material respects.
31 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 5. UTILISATION 5.1. Delivery of a Utilisation Request The Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than noon (Johannesburg time) on the date that is 3 (three) Business Days before the proposed Utilisation Date. 5.2. Completion of a Utilisation Request 5.2.1. Subject to Clause 10.5 (Utilisation Requests), each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless: 5.2.1.1. the proposed Utilisation Date is a Business Day within the Availability Period; 5.2.1.2. the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and 5.2.1.3. it identifies the proposed first Interest Period and that Interest Period complies with Clause 9 (Interest Periods). 5.2.2. Only one Loan may be requested in each Utilisation Request. 5.3. Currency and amount 5.3.1. The currency specified in a Utilisation Request must be ZAR. 5.3.2. The amount of the proposed Loan must be an amount which is not more than the Available Facility and which is a minimum of ZAR50,000,000 (fifty million Rand) or, if less, the Available Facility. 5.4. Lenders' participation 5.4.1. If the conditions set out in this Agreement have been met, and subject to Clause 6.1 (Repayment of Loans) each Lender shall make its participation in each Loan available by the Utilisation Date. 5.4.2. The amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan. 5.4.3. The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by not later than noon (Johannesburg time) on the date that is 3 (three) Business Days before the proposed Utilisation Date. 5.5. Maximum number of Loans The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation 10 (ten) or more Loans would be outstanding. 5.6. Cancellation of Commitment The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.
32 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 6. REPAYMENT 6.1. Repayment of Loans 6.1.1. The Borrower shall repay each Loan on the last day of its Interest Period or, if earlier, the Termination Date. 6.1.2. Without prejudice to the Borrower's obligation under Clause 6.1.1 above, if: 6.1.2.1. one or more Loans are to be made available to the Borrower: 6.1.2.1.1. on the same day that a maturing Loan is due to be repaid by the Borrower; and 6.1.2.1.2. in whole or in part for the purpose of refinancing the maturing Loan; and 6.1.2.2. the proportion borne by each Lender’s participation in the maturing Loan to the amount of that maturing Loan is the same as the proportion borne by that Lender’s participation in the new Loans to the aggregate amount of those new Loans, the aggregate amount of the new Loans shall, unless the Borrower notifies the Agent to the contrary in the relevant Utilisation Request, be treated as if applied in or towards repayment of the maturing Loan so that: 6.1.2.2.1. if the amount of the maturing Loan exceeds the aggregate amount of the new Loans: 6.1.2.2.1.1. the Borrower will only be required to make a payment under Clause 28.1 (Payments to the Agent) in an amount in the relevant currency equal to that excess; and 6.1.2.2.1.2. each Lender's participation (if any) in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender's participation (if any) in the maturing Loan and that Lender will not be required to make a payment under Clause 28.1 (Payments to the Agent) in respect of its participation in the new Loans; and 6.1.2.2.1.3. if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans: 6.1.2.2.1.3.1. the Borrower will not be required to make a payment under Clause 28.1 (Payments to the Agent); and
33 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 6.1.2.2.1.3.2. each Lender will be required to make a payment under Clause 28.1 (Payments to the Agent) in respect of its participation (if any) in the new Loans only to the extent that its participation in the new Loans exceeds its participation (if any) in the maturing Loan and the remainder of that Lender's participation in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender's participation in the maturing Loan. 7. PREPAYMENT AND CANCELLATION 7.1. Mandatory prepayment - Illegality If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain any Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so: 7.1.1. that Lender shall promptly notify the Agent upon becoming aware of that event; 7.1.2. upon the Agent notifying the Borrower, the Available Commitment of that Lender will be immediately cancelled; and 7.1.3. the Borrower shall repay that Lender's participation in the Loans on the last day of the Interest Period for each Loan occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment shall be cancelled in the amount of the participations repaid. 7.2. Mandatory Prepayment - Change of Control 7.2.1. If a Change of Control occurs: 7.2.1.1. the Borrower shall promptly notify the Agent upon becoming aware of that event; 7.2.1.2. a Lender shall not be obliged to fund a Utilisation (except for a Rollover Loan); and 7.2.1.3. if the Majority Lenders so require, the Agent shall, by not less than 10 (ten) Business Days notice to the Borrower, cancel the Commitment and declare all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Commitment will be cancelled and all such outstanding Loans and amounts will become immediately due and payable.
34 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 7.2.2. For the purpose of Clause 7.2 "Change of Control" means: 7.2.2.1. in respect of the Borrower, Sibanye Stillwater Limited ceases directly or indirectly to: 7.2.2.1.1. have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to appoint or remove all, or the majority, of the directors or other equivalent officers of the Borrower; and/or 7.2.2.1.2. hold beneficially and legally more than 50% (fifty percent) of the issued ordinary share capital of the Borrower (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or 7.2.2.1.3. for so long as the Borrower's shares are listed, unless another person or group of persons acting in concert has the power to cast or control the power of casting a higher percentage of such votes, exercise more than 35% (thirty-five percent) of the maximum number of votes that might be cast at a general meeting of the Borrower 7.2.2.2. in respect of any Guarantor, the Borrower ceases directly or indirectly to: 7.2.2.2.1. have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to appoint or remove all, or the majority, of the directors or other equivalent officers of the Borrower; or 7.2.2.2.2. hold beneficially and legally more than 50% (fifty percent) of the issued ordinary share capital of a Guarantor (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or 7.2.2.3. any person or group of persons acting in concert gains direct or indirect control of the Borrower or any Guarantor. 7.2.3. For the purpose of Clause 7.2 above "acting in concert" means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Borrower by any of them, either directly or indirectly, to obtain or consolidate control of the Borrower. 7.3. Mandatory Prepayment - Breach of Sanctions and Anti-Corruption Laws 7.3.1. Upon the occurrence of any breach of Clauses 18.18 (Anti-Corruption Laws and Sanctions) or Clause 21.16 (Anti-Corruption Laws and Sanctions) the Borrower shall promptly notify the Agent (or the Agent shall notify the Borrower, as the case may be) in writing upon becoming aware of the occurrence of such breach or that such event will occur (whether or not the Agent has been notified of such event by the Borrower) then: 7.3.1.1. a Lender shall not be obliged to fund a Utilisation; and
35 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 7.3.1.2. if a Lender so requires, the Agent shall, by not less than 15 (fifteen) Business Days' notice to the Borrower, cancel that Lender's Commitments and declare that Lender's participation in all Loans immediately due and payable whereupon that Lender's corresponding Commitments will be cancelled and that Lender's participation in the Loans will become immediately due and payable. 7.3.2. In the event of a Lender or an Affiliate of a Lender becoming, or threatened with becoming, a Sanctioned Entity or committing, or threatened with committing, a Sanctioned Transaction by virtue of advancing the Facility to the Borrower, then the provisions of Clause 7.3.1 shall apply mutatis mutandis. 7.4. Mandatory prepayment - Disposal and Insurance Proceeds The Obligors shall ensure that 100% (one hundred percent) of: 7.4.1. the amount of Disposal Proceeds (other than Excluded Disposal Proceeds); and 7.4.2. the amount of Insurance Proceeds (other than Excluded Insurance Proceeds) received by any member or members of the Group after deducting any reasonable expenses in relation to that claim which are properly evidenced and incurred by any member of the Group to persons who are not members of the Group, are applied in pro rata prepayment of the Loans under the Facility and for this purpose: 7.4.2.1. "Disposal Proceeds" means the cash consideration received (including any amount owing to and set off by any purchaser) by any Obligor for any Disposal made by that Obligor to any person who is not an Obligor and after deducting: 7.4.2.1.1. any reasonable expenses which are properly evidenced and incurred by that Obligor with respect to that Disposal to persons who are not members of the Group; and 7.4.2.1.2. any Tax incurred and required to be paid by the seller in connection with that Disposal (as reasonably determined by the Obligors’ Agent, on the basis of professional advice and existing rates and taking account of any available credit, deduction or allowance); 7.4.2.2. "Excluded Disposal Proceeds" means: 7.4.2.2.1. any Disposal Proceeds of a Permitted Disposal; and 7.4.2.2.2. any Disposal Proceeds (other than any Disposal Proceeds arising from any Disposal referred to in sub-clause 7.4.2.2.1): 7.4.2.2.2.1. which, when aggregated with the Disposal Proceeds of all other Disposals of assets by Obligors made at any time prior to the Final Discharge Date, do not exceed ZAR500,000,000 (five hundred million Rand); and
36 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 7.4.2.2.2.2. which do exceed the amounts in sub-clause 7.4.2.2.2.1, the extent that those Disposal Proceeds are reinvested in an Obligor within 90 (ninety) days of receipt or are committed for reinvestment in an Obligor within 90 (ninety) days of receipt (as evidenced by a resolution of the board of directors of the relevant Obligor); 7.4.2.3. "Excluded Insurance Proceeds" means any Insurance Proceeds which the Obligors’ Agent notifies the Agent are, or are to be, applied: 7.4.2.3.1. to meet a third party claim against any Obligor or any employee, director or officer of an Obligor; 7.4.2.3.2. to cover operating losses of the Obligor in respect of which the relevant insurance claim was made; 7.4.2.3.3. in the replacement, reinstatement and/or repair of the assets of the Obligor or otherwise in amelioration of the loss in respect of which the relevant insurance claim was made (or to reimburse an Obligor for any amount applied in replacing, reinstating and/or repairing such assets), if: 7.4.2.3.3.1. such Insurance Proceeds are so applied within 90 (ninety) days of receipt or are committed for such application within 90 (ninety)days of receipt (as evidenced by (i) a resolution of the board of directors of the relevant Obligor; or (ii) such other evidence as may be available that details the manner in which such Insurance Proceeds are to be applied) or, in the case of sub- clause 7.4.2.3.3, such longer period as may reasonably be required to replace, reinstate and/or repair the relevant asset (as reasonably determined by the relevant Obligor, on the basis of professional advice and as evidenced by (i) a resolution of the board of directors of the relevant Obligor (if applicable); or (ii) such other evidence as may be available that details the manner in which such Insurance Proceeds are to be applied), of receipt; and 7.4.2.3.3.2. the aggregate amount of all such Insurance Proceeds received by the Obligors since the Effective Date do not exceed ZAR250,000,000 (two hundred and fifty million Rand); and
37 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 7.4.2.4. "Insurance Proceeds" means the proceeds of any insurance claim under any insurance maintained by any Obligor. 7.5. Mandatory prepayment - De-listing 7.5.1. If: 7.5.1.1. trading in any of the securities issued by the Borrower ("Borrower Securities") listed on any securities exchange operated by the JSE Limited or the NYSE is suspended for a period exceeding 5 (five) Business Days (other than a suspension in trading which affects the trading of some or all of the shares traded on the JSE Limited or the NYSE generally); 7.5.1.2. the Borrower Securities cease to be listed on a securities exchange operated by the JSE Limited or the NYSE or any action is taken by the Borrower, the JSE Limited or the NYSE to de-list the Borrower Securities; 7.5.1.3. a shareholder (or any of their respective shareholders) takes any action whatsoever to delist its shares, or cease to have such shares traded or publicly quoted on the main board of the JSE Limited or the NYSE, for any reason; 7.5.1.4. the JSE announces that, pursuant to the JSE or NYSE Listings Requirements, the shares of either Shareholder have ceased (or will cease) to be listed, traded or publicly quoted on the main board of the JSE or NYSE for any reason; or 7.5.1.5. the JSE or NYSE announces that, pursuant to the JSE or NYSE Listings Requirements, the listing of either Shareholder's shares are suspended and that suspension is not lifted within a period of 3 (three) Business Days after that announcement, the Borrower shall promptly notify the Agent upon becoming aware of that event, and: 7.5.1.5.1. a Lender shall not be obliged to fund any Utilisation; and 7.5.1.5.2. if the Majority Lenders so require, the Agent shall, by not less than 10 (ten) Business Days notice to the Borrower, cancel the Commitment and declare all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Commitment will be cancelled and all such outstanding Loans and amounts will become immediately due and payable. 7.6. Voluntary cancellation The Borrower may, if it gives the Agent not less than 10 (ten) Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of ZAR50,000,000 (fifty million Rand)) of the Available Facility. Any cancellation under this Clause 7.6 shall reduce the Commitments of the Lenders rateably under the Facility.
38 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 7.7. Voluntary prepayment The Borrower may, if it gives the Agent not less than 5 (five) Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Loan. 7.8. Voluntary prepayment – Increase Costs, Gross up and Tax Indemnity 7.8.1. If: 7.8.1.1. any sum payable to any Lender by an Obligor is required to be increased under sub-clause 12.2.3 of Clause 12.2 (Tax gross-up); or 7.8.1.2. any Lender claims indemnification from the Obligors under Clause 12.3 (Tax indemnity) or Clause 13 (Increased Costs), the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loans or give the Agent notice of its intention to replace that Lender in accordance with Clause 7.8.4 below. 7.8.2. On receipt of a notice of cancellation referred to in sub-clause 7.8.1.2, the Available Commitment of that Lender shall be immediately reduced to zero. 7.8.3. On the last day of each Interest Period which ends after the Borrower has given notice of cancellation under sub-clause 7.8.1 (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in that Loan and that Lender's corresponding Commitment shall be immediately cancelled in the amount of the repayment. 7.8.4. If: 7.8.4.1. any of the circumstances set out in Clause 7.8.1 above apply to the Lender; or 7.8.4.2. an Obligor becomes obliged to pay any amount in accordance with Clause 7.1 (Mandatory prepayment - Illegality), the Borrower may, in the circumstances set out in Clause 7.8.1 above, on 5 (five) Business Days' prior notice to the Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall transfer pursuant to Clause 24 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to an Eligible Institution which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 24 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of such Lender's participation in the outstanding Loans and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents. 7.9. Restrictions 7.9.1. Any notice of cancellation or prepayment given by any Party under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment. 7.9.2. Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid, without premium or penalty.
39 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 7.9.3. Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid or repaid may be reborrowed in accordance with the terms of this Agreement, other than, in circumstances where the prepayment or repayment has been made pursuant to Clause 7.1 (Mandatory prepayment - Illegality), Clause 7.2 (Mandatory Prepayment – Change of Control) Clause 7.3 (Mandatory Prepayment – Breach of Sanctions and Anti-Corruption Laws), Clause 7.4 (Mandatory prepayment – Insurance and Disposal Proceeds), Clause 7.5 (Mandatory Prepayment – De-listing), Clause 7.8 (Voluntary prepayment – Increased Costs, Gross up and Tax Indemnity), in which event the Commitments shall be reduced by the amount prepaid or repaid. 7.9.4. The Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement. 7.9.5. Subject to Clause 2.2 (Accordion increase option), no amount of the Commitment cancelled under this Agreement may be subsequently reinstated. 7.9.6. If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate. 7.9.7. If all or part of any Lender’s participation in a Loan under a Facility is repaid or prepaid and is not available for redrawing (other than by operation of Clause 4.2 (Further conditions precedent)), an amount of that Lender’s Commitments (equal to the amount of the participation which is repaid or prepaid) in respect of that Facility will be deemed to be cancelled on the date of repayment or prepayment. 8. INTEREST 8.1. Calculation of interest The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable: 8.1.1. Margin; and 8.1.2. JIBAR. 8.2. Payment of interest The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period. 8.3. Default interest 8.3.1. If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to Clause 8.3.2 below, is 2% (two percent) per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of that Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 8.3 shall be immediately payable by the Obligor on demand by the Agent. 8.3.2. If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan: 8.3.2.1. the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
40 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 8.3.2.2. the rate of interest applying to the overdue amount during that first Interest Period shall be 2% (two percent) per annum higher than the rate which would have applied if the overdue amount had not become due. 8.3.3. Default interest (if unpaid) arising on any overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. 8.4. Margin adjustment If, at any time before the end of the Availability Period, the Borrower mandates the Original Lender to be its main provider of traditional transactional banking services required for the conduct of each Obligor's business and operations (which shall, for the avoidance of doubt, exclude gold sales and forward sales of gold and settlement services in relation thereto), the Margin in respect of every Loan (including every Rollover Loan) advanced after the date on which such mandate is granted, shall be reduced by 10 (ten) basis points. 8.5. Sustainability Margin Adjustment 8.5.1. This Clause 8.5.1 shall apply with effect from the SLL Classification Date. 8.5.2. Subject to Clause 21.22 (Declassification Event and consequences) and the other provisions of this Clause 8.5, following the receipt by the Agent of the Sustainability Compliance Certificate in respect of a SLL Reference Period in accordance with Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report), the Margin applicable to each Loan shall be adjusted (or not adjusted, as the case may be) to the applicable rate determined using the table in paragraph 2 of Part I (Sustainability Definitions) of Schedule 10 (Sustainability Schedule) and the number of SPTs that the Sustainability Compliance Certificate for that SLL Reference Period certifies have been met (a "Sustainability Margin Adjustment"). 8.5.3. Subject to sub-clause 8.5.6 below, any Sustainability Margin Adjustment in respect of the Margin for a Loan shall take effect on the first day of the next Interest Period for that Loan following after receipt by the Agent of the Sustainability Compliance Certificate for the most recently completed SLL Reference Period pursuant to Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report) (the "Sustainability Margin Adjustment Date"). 8.5.4. Subject to sub-clause 8.5.6 below and to Clause 19.11 (Sustainability Compliance Certificate Inaccuracy), only one Sustainability Compliance Certificate may be delivered in respect of any SLL Reference Period, and any Sustainability Margin Adjustment made by reference to that SLL Reference Period shall only apply until the earlier of: 8.5.4.1. the date on which the Sustainability Compliance Certificate is required to be delivered for the following SLL Reference Period pursuant to Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report); or 8.5.4.2. where a Sustainability Compliance Certificate has been delivered for the following SLL Reference Period pursuant to Clause 19.10 (Sustainability Compliance Certificate, Sustainability Report and Verification Report), the relevant Sustainability Margin Adjustment Date.
41 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 8.5.5. For the avoidance of doubt: 8.5.5.1. the calculation of any Sustainability Margin Adjustment which is applied to the Margin in respect of any SLL Reference Period shall disregard any Sustainability Margin Adjustment which was applied to the Margin in respect of the preceding SLL Reference Period; and 8.5.5.2. no Sustainability Margin Adjustment shall result in the Margin applicable to any Loan exceeding the Margin applicable to a Loan with that Interest Period, as at the Signature Date. 8.5.6. If a revised Sustainability Compliance Certificate is received by the Agent in respect of any SLL Reference Period pursuant to Clause 19.11 (Sustainability Compliance Certificate Inaccuracy), any Sustainability Margin Adjustment which is applied to the Margin for a Loan by reference to that SLL Reference Period shall: 8.5.6.1. be recalculated in accordance with the revised Sustainability Compliance Certificate; and 8.5.6.2. take effect on the first day of the next Interest Period for that Loan after receipt by the Agent of the revised Sustainability Compliance Certificate for the relevant SLL Reference Period pursuant to 19.11 (Sustainability Compliance Certificate Inaccuracy). 8.5.7. If a revised Sustainability Compliance Certificate received by the Agent pursuant to Clause 19.11 (Sustainability Compliance Certificate Inaccuracy) shows that a higher Margin should have applied during a certain period, then the Borrower shall, subject only to sub-clause 8.5.5.2, promptly pay to the Agent any amounts necessary to put the Agent and the Lenders in the position they would have been in had the appropriate rate of the Margin applied during such period. 8.5.8. For so long as a Sustainability Breach is continuing the SPTs will, for the purposes of this Clause 8.5, be deemed not to have been met for the applicable SLL Reference Period. 8.6. Notification of rates of interest 8.6.1. The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement, including pursuant to an adjustment in accordance with sub-clause 8.5.3 of Clause 8.5 (Sustainability Margin Adjustment). 8.6.2. The Agent shall promptly notify the Borrower of each Funding Rate relating to a Loan. 9. INTEREST PERIODS 9.1. Selection of Interest Periods 9.1.1. Subject to the remainder of this Clause 9, the Borrower may select an Interest Period of 1 (one) or 3 (three) Months (or any other period agreed between the Borrower, the Agent and all the Lenders) for a Loan in the Utilisation Request for that Loan. 9.1.2. An Interest Period for a Loan shall not extend beyond the Termination Date. 9.1.3. A Loan has one Interest Period only.
42 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 9.2. Non-Business Days If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). 10. CHANGES TO THE CALCULATION OF INTEREST 10.1. Unavailability of Screen Rate 10.1.1. Interpolated Screen Rate: If no Screen Rate is available for JIBAR for the Interest Period of a Loan, the applicable JIBAR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan. 10.1.2. Cost of funds: If no Screen Rate is available for JIBAR for (i) ZAR; or (ii) the Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate, there shall be no JIBAR for that Loan and Clause 10.3 (Cost of funds) shall apply to that Loan for that Interest Period. 10.2. Market disruption If before close of business in Johannesburg on the Quotation Day the Borrower receives notifications from a Lender or Lenders that the cost to it of funding its participation in that Loan from the wholesale market for ZAR would be in excess of JIBAR then Clause 10.3 (Cost of funds) shall apply to that Loan for the relevant Interest Period. 10.3. Cost of funds 10.3.1. If this Clause 10.3 applies, the rate of interest on the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of: 10.3.1.1. the Margin; and 10.3.1.2. the rate notified to the Agent by that Lender as soon as practicable and in any event within 5 (five) Business Days of the first day of that Interest Period (or, if earlier, on the date falling 10 (ten) Business Days before the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to the relevant Lender of funding its participation in that Loan from whatever source it may reasonably select. 10.3.2. If this Clause 10.3 applies and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. 10.3.3. Any alternative basis agreed pursuant to Clause 10.3.2 above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties. 10.3.4. If this Clause 10.3 applies pursuant to Clause 10.2 (Market disruption) and: 10.3.4.1. a Lender's Funding Rate is less than JIBAR; or
43 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 10.3.4.2. a Lender does not supply a quotation by the time specified in Clause 10.3.1.2 above, the cost to that Lender of funding its participation in that Loan for that Interest Period shall be deemed, for the purposes of Clause 10.3.1 above, to be JIBAR. 10.4. Notification to Borrower If Clause 10.3 (Cost of funds) applies the Agent shall, as soon as is practicable, notify the Borrower. 10.5. Utilisation Requests If Clause 10.3 (Cost of funds) applies, the Borrower shall be entitled to revoke a Utilisation Request relating to a Loan in respect of which Clause 10.3 (Cost of funds) would apply. 10.6. Break Costs and Break Gains 10.6.1. The Borrower shall, within 5 (five) Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum. 10.6.2. A Finance Party shall, within 5 (five) Business Days of demand by the Borrower, pay to the Borrower the amount of any Break Gain which is attributable to all or any part of any Loan advanced under the Facility being repaid or prepaid on a day other than the last day of an Interest Period for that Loan. 10.6.3. Each Lender shall, as soon as reasonably practicable after a demand by an Obligor, provide a certificate confirming the amount of its Break Costs or Break Gains (as applicable) for any Interest Period in which they accrue and setting out in reasonable detail the calculation thereof. 11. FEES 11.1. Commitment fee 11.1.1. The Borrower shall pay to the Agent (for the account of each Lender) a fee computed as 30% (thirty percent) of the Margin that applies to Loans with an Interest Period of 3 (three) Months, per annum, on that Lender's Available Commitment for the Availability Period. 11.1.2. The accrued commitment fee is payable on the last day of each successive period of 3 (three) Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective. 11.2. Upfront fee The Borrower shall pay to the Agent (for the account of the Original Lender) an upfront fee in an amount and at the times agreed in a Fee Letter.
44 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 11.3. Utilisation fees 11.3.1. The Borrower shall pay to the Agent (for the account of each Lender) a utilisation fee computed at the following rate: 11.3.1.1. 0.1% (zero point one percent) per annum on each Loan for each day that the aggregate of the Loans is more than 33.33% (thirty three point three three percent) but less than 66.67% (sixty six point six seven percent) of the Commitment; and 11.3.1.2. 0.2% (zero point two percent) per annum on each Loan for each day that the aggregate of the Loans is equal to or more than 66.67% (sixty six point six seven percent) of the Commitment. 11.3.2. The accrued utilisation fee is due and payable on the last day of each Interest Period (including the Termination Date). 11.4. Accordion increase fee 11.4.1. The Borrower shall, in relation to each Increase Commitment under Clause 2.2 (Accordion increase option), pay to the Agent (for the account of an Increase Lender) an accordion increase fee in an amount computed at the rate of 0.25% (zero point two five percent) of the Increased Commitment. 11.4.2. The accordion increase fee shall become due on the Accordion Increase Effective Date and shall become payable on the Accordion Increase Effective Date (or such later date as any Increase Lender may agree in writing). 11.5. No Agency fee The Agent hereby waives any right to claim a fee in relation to the performance of its duties, obligations and responsibilities or the exercise of its rights, powers, authorities and discretions under the Finance Documents. 12. TAX GROSS UP AND INDEMNITIES 12.1. Definitions In this Agreement: 12.1.1. "Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document. 12.1.2. "Tax Credit" means a credit against, relief or remission for, or repayment of any Tax. 12.1.3. "Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document. 12.1.4. "Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity). 12.1.5. Unless a contrary indication appears, in this Clause 12 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.
45 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 12.2. Tax gross-up 12.2.1. Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. 12.2.2. The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and that Obligor. 12.2.3. If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. 12.2.4. If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. 12.2.5. Within 30 (thirty) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. 12.3. Tax indemnity 12.3.1. The Borrower shall (within 3 (three) Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document. 12.3.2. Clause 12.3.1 above shall not apply: 12.3.2.1. with respect to any Tax assessed on a Finance Party: 12.3.2.1.1. under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or 12.3.2.1.2. under the law of the jurisdiction in which that Finance Party is located in respect of amounts received or receivable in that jurisdiction, if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or 12.3.2.2. to the extent a loss, liability or cost is compensated for by an increased payment under Clause 12.2 (Tax gross-up). 12.3.3. A Protected Party making, or intending to make, a claim under Clause 12.3.1 above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower. 12.3.4. A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3, notify the Agent.
46 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 12.4. Tax Credit If an Obligor makes a Tax Payment and the relevant Finance Party determines that: 12.4.1. a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, or to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and 12.4.2. that Finance Party has obtained, utilised and retained that Tax Credit, the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor. 12.5. Stamp taxes The Borrower shall (within 3 (three) Business Days of demand) indemnify each Finance Party against, and shall pay to the relevant Finance Party, any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document. 12.6. Value added tax 12.6.1. All amounts set out or expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to Clause 12.6.2 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party). 12.6.2. If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration): 12.6.2.1. (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this Clause 12.6.2.1 applies) promptly pay the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and 12.6.2.2. (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of the VAT.
47 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 12.6.3. Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any costs or expenses, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. 13. INCREASED COSTS 13.1. Increased costs 13.1.1. Subject to Clause 13.3 (Exceptions) the Borrower shall, within 3 (three) Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the Signature Date. 13.1.2. In this Agreement "Increased Costs" means: 13.1.2.1. a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital; 13.1.2.2. an additional or increased cost; or 13.1.2.3. a reduction of any amount due and payable under any Finance Document, which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document. 13.2. Increased cost claims 13.2.1. A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower. 13.2.2. Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. 13.3. Exceptions 13.3.1. Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is: 13.3.1.1. attributable to a Tax Deduction required by law to be made by an Obligor; 13.3.1.2. compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in Clause 12.3.1 of Clause 12.3 (Tax indemnity) applied); or 13.3.1.3. attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. 13.3.2. In this Clause 13.3, a reference to a "Tax Deduction" has the same meaning given to that term in Clause 12.1 (Definitions).
48 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 14. OTHER INDEMNITIES 14.1. Currency indemnity 14.1.1. If any sum due from an Obligor under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of: 14.1.1.1. making or filing a claim or proof against that Obligor; or 14.1.1.2. obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, that Obligor shall as an independent obligation, within 3 (three) Business Days of demand, indemnify each Finance Party to whom that Sum is due against and shall pay to each such Finance Party any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum. 14.1.2. Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. 14.2. Environmental indemnity 14.2.1. Each Obligor hereby indemnifies each Finance Party, each Affiliate of a Finance Party and each officer, director, employee, agent, advisor, and representative of a Finance Party (together, the "Indemnified Parties") on demand against any losses, claims, damages, liabilities or other costs or expenses suffered or incurred by that Indemnified Party (except to the extent solely caused by such Indemnified Party’s own gross negligence or wilful default) as a result of: 14.2.1.1. any breach of any Environmental Law (whether by an Obligor or any other member of the Group (the "Defaulting Party")); 14.2.1.2. an Environmental Claim; or 14.2.1.3. any enquiry, investigation, subpoena (or similar order) or litigation with respect to any Environmental Claim and any other enquiry, investigation, subpoena (or similar order) or litigation in respect of any breach of any Environmental Law that has or is reasonably likely to give rise to a liability for any Finance Party, which relates to any Defaulting Party, any assets of any Defaulting Party or the operation of all or part of the business of any Defaulting Party and which would not have arisen if the Finance Documents or any of them had not been executed by that Finance Party. Any Indemnified Party may rely on this Clause 14.2 as a stipulation for its or his benefit, capable of acceptance at any time. 14.3. Other indemnities 14.3.1. The Borrower shall (or shall procure that an Obligor will), within 3 (three) Business Days of demand, indemnify each Finance Party against and shall pay to each such Finance Party any cost, loss or liability incurred by that Finance Party as a result of: 14.3.1.1. the occurrence of any Default;
49 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 14.3.1.2. a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 27 (Sharing among the Finance Parties); 14.3.1.3. funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or 14.3.1.4. a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower. 14.4. Indemnity to the Agent The Borrower shall promptly indemnify the Agent against and shall pay to the Agent any cost, loss or liability incurred by the Agent (acting reasonably) as a result of: 14.4.1. investigating or taking any other action in connection with any event which it reasonably believes is a Default; 14.4.2. any failure by the Borrower to comply with its obligations under Clause 16 (Costs and expenses); 14.4.3. any default by any Obligor in the performance of any of the other obligations expressed to be assumed by it in the Finance Documents; 14.4.4. the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Agent by the Finance Documents or by law; 14.4.5. instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; or 14.4.6. acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised. 15. MITIGATION BY THE LENDERS 15.1. Mitigation 15.1.1. Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Mandatory prepayment - Illegality), Clause 12 (Tax gross-up and indemnities) or Clause 13 (Increased costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to an Affiliate. 15.1.2. Clause 15.1.1 above does not in any way limit the obligations of any Obligor under the Finance Documents. 15.2. Limitation of liability 15.2.1. The Borrower shall promptly indemnify each Finance Party against and shall pay to each such Finance Party all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation). 15.2.2. A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
50 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 16. COSTS AND EXPENSES 16.1. Transaction expenses The Borrower shall promptly on demand pay the Agent the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent in connection with the negotiation, preparation, printing, execution and syndication of: 16.1.1. this Agreement and any other documents referred to in this Agreement; and 16.1.2. any other Finance Documents executed after the Signature Date. 16.2. Amendment costs If: 16.2.1. an Obligor requests an amendment, waiver or consent; 16.2.2. there is any change in law or any regulation which requires an amendment, waiver or consent under the Finance Documents; or 16.2.3. an amendment is required pursuant to Clause 34.4 (Sustainability amendments), the Borrower shall, within 3 (three) Business Days of demand, reimburse each Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in connection with evaluating, negotiating or complying with any such request or requirement. 16.3. Enforcement costs The Borrower shall, within 3 (three) Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees on the scale as between attorney and own client whether incurred before or after judgement) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document. 17. GUARANTEE AND INDEMNITY 17.1. Guarantee and indemnity Each Guarantor irrevocably and unconditionally jointly and severally, as a principal obligor and not merely as a surety and on the basis of discrete obligations enforceable against it: 17.1.1. guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor's obligations under the Finance Documents; 17.1.2. undertakes with each Finance Party that whenever an Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and 17.1.3. agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 if the amount claimed had been recoverable on the basis of a guarantee.
51 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 17.2. Continuing guarantee This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part. 17.3. Reinstatement If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, business rescue proceedings, liquidation, winding-up or otherwise, without limitation, then the liability of each Obligor under this Clause 17 will continue or to be reinstated as if the discharge, release or arrangement had not occurred. 17.4. Waiver of defences The obligations of each Guarantor under this Clause 17 will not be affected by any act, omission, matter or thing which, but for this Clause 17, would reduce, release or prejudice any of its obligations under this Clause 17 (without limitation and whether or not known to it or any Finance Party) including: 17.4.1. any time, waiver or consent granted to, or composition with, any Obligor or other person; 17.4.2. the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group; 17.4.3. the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; 17.4.4. any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; 17.4.5. any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document; 17.4.6. any unenforceability, illegality, invalidity suspension or cancellation of any obligation of any person under any Finance Document or any other document; 17.4.7. any insolvency, liquidation, winding-up, business rescue or similar proceedings (including, but not limited to, receipt of any distribution made under or in connection with those proceedings); 17.4.8. any other Finance Document not being executed by or binding against any other Guarantor or any other party; or 17.4.9. any other fact or circumstance arising on which a Guarantor might otherwise be able to rely on a defence based on prejudice, waiver or estoppel.
52 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 17.5. Immediate recourse Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or claim payment from any person before claiming from that Guarantor under this Clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary. 17.6. Appropriations Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party may: 17.6.1. refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and 17.6.2. hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause 17. 17.7. Deferral of Guarantors' rights 17.7.1. Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17: 17.7.1.1. to be indemnified by an Obligor; 17.7.1.2. to claim any contribution from any other guarantor of or provider of security for any Obligor's obligations under the Finance Documents; 17.7.1.3. to take the benefit (in whole or in part and whether by way of subrogation, cession of action or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee; 17.7.1.4. to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 17.1 (Guarantee and indemnity); 17.7.1.5. to exercise any right of set-off against any Obligor; and/or 17.7.1.6. to claim, rank, prove or vote as a creditor or shareholder of any Obligor in competition with any Finance Party. 17.7.2. If a Guarantor receives any benefit, payment or distribution in relation to such rights, it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for, or otherwise for the benefit of, the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 27 (Payment mechanics).
53 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 17.8. Release of Guarantors' right of contribution If any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor: 17.8.1. that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and 17.8.2. each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document where such rights are granted by or in relation to the assets of the Retiring Guarantor. 17.9. Additional security This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party. 18. REPRESENTATIONS Each Obligor makes the representations and warranties set out in this Clause 18 to each Finance Party on the Signature Date and on the Effective Date. 18.1. Status 18.1.1. It is a corporation, duly incorporated and validly existing under the laws of its Original Jurisdiction. 18.1.2. It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted. 18.2. Binding obligations The obligations expressed to be assumed by it in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations. 18.3. Non-conflict with other obligations The entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not conflict with: 18.3.1. any law or regulation applicable to it; 18.3.2. its or any of its Subsidiaries' constitutional documents; or 18.3.3. any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets to an extent or in a manner which has a Material Adverse Effect. 18.4. Power and authority 18.4.1. It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.
54 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 18.4.2. No limit on its powers will be exceeded as a result of the borrowing or giving of guarantees or indemnities contemplated by the Finance Documents to which it is a party. 18.5. Validity and admissibility in evidence All Authorisations required or desirable: 18.5.1. to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and 18.5.2. to make the Finance Documents to which it is a party admissible in evidence in its Original Jurisdiction; and have been obtained or effected and are in full force and effect. 18.6. Governing law and enforcement 18.6.1. The choice of South African law as the governing law of the Finance Documents will be recognised and enforced in its Relevant Jurisdictions. 18.6.2. Any judgment obtained in South Africa in relation to a Finance Document will be recognised and enforced in its Relevant Jurisdictions. 18.7. Deduction of Tax It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document. 18.8. No filing or stamp taxes Under the law of its jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents. 18.9. No default 18.9.1. No Event of Default is continuing or might reasonably be expected to result from the entry into, or the performance of any transaction contemplated by, the Finance Documents. 18.9.2. No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which might, in the reasonable opinion of all the Lenders, have a Material Adverse Effect. 18.10. No misleading information 18.10.1. Any factual information provided by any member of the Group for the purposes of the Finance Documents was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated. 18.10.2. The financial projections provided in relation to the Finance Documents have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
55 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 18.10.3. No other written information was withheld or provided by any member of the Group (including its advisors) to the Finance Parties under or in connection with the Finance Documents that results in the information or projections referred to in this Clause 18.10 being untrue or misleading in any material respect. 18.10.4. All Sustainability Information was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect. 18.11. Financial statements 18.11.1. Its Original Financial Statements were prepared in accordance with IFRS consistently applied unless expressly disclosed to the Agent in writing to the contrary before the Signature Date. 18.11.2. Its Original Financial Statements fairly present its financial condition as at the end of the relevant financial year and its results of operations during the relevant financial year (consolidated in the case of the Borrower) unless expressly disclosed to the Agent in writing to the contrary before the Signature Date. 18.11.3. There has been no material adverse change in its business or financial condition since the last day of the period in respect of which its Original Financial Statements were prepared. 18.12. Pari passu ranking Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally. 18.13. No proceedings 18.13.1. No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect has or have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries. 18.13.2. No judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief) been made against it or any of its Subsidiaries. 18.14. Insolvency and Financial Distress 18.14.1. No: 18.14.1.1. corporate action, legal proceeding or other procedure or step described in Clause 22.7 (Insolvency and business rescue proceedings); or 18.14.1.2. creditors' process described in Clause 22.8 (Creditors' process), has been taken or threatened in relation to it or (to the best of its knowledge) any other member of the Group; and none of the circumstances described in Clause 22.6 (Insolvency) applies to a member of the Group. 18.14.2. Neither it nor any member of the Group is Financially Distressed (as defined in the Companies Act 2008).
56 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 18.15. No breach of laws 18.15.1. It has not (and none of its Subsidiaries have) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect. 18.15.2. No labour disputes are current or, to the best of its knowledge and belief, threatened against any member of the Group which have or are reasonably likely to have a Material Adverse Effect. 18.16. Environmental laws 18.16.1. Each member of the Group is in compliance with Clause 21.11 (Environmental compliance) and to the best of its knowledge and belief no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. 18.16.2. No Environmental Claim has been commenced or (to the best of its knowledge and belief) is threatened against any member of the Group where that claim has or is reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect. 18.17. Accounting reference date The Accounting Reference Date of each member of the Group is 30 June. 18.18. Anti-corruption Laws and Sanctions 18.18.1. It is not (and the Borrower represents that no Subsidiary of the Borrower is, to the best of its knowledge and belief, having made due and careful enquiry): 18.18.1.1. using nor will it use the proceeds of any Facility for the purpose of financing or making funds available directly or indirectly to any person or entity which is currently a Sanctioned Entity or as part of a Sanctioned Transaction, to the extent such financing or provision of funds would currently be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions; 18.18.1.2. is contributing nor will it contribute or otherwise make available the proceeds of any Facility to any other person or entity for the purpose of financing the activities of any person or entity which is currently listed on a Sanctions List, to the extent such contribution or provision of proceeds would currently be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions; 18.18.1.3. has been, nor is targeted under any Sanctions; 18.18.1.4. has participated in and is not participating in any Sanctioned Transaction in any manner; and/or 18.18.1.5. has violated nor is violating any applicable Sanctions. 18.18.2. It has (and the Borrower represents that each Subsidiary of the Borrower has, to the best of its knowledge and belief, having made due and careful enquiry) conducted its businesses in compliance with applicable Anti-Corruption Laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
57 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 18.19. Group Structure Chart The Group Structure Chart is true, complete and accurate in all material respects and shows the following information: 18.19.1. each member of the Group, including current name and company registration number, its jurisdiction of incorporation, a list of shareholders and indicating whether a company is a dormant Subsidiary or is not a company with limited liability; and 18.19.2. all minority interests in any member of the Group and any person in which any member of the Group holds shares in its issued share capital or equivalent ownership interest of such person. 18.20. No adverse consequences 18.20.1. It is not necessary under the laws of its Relevant Jurisdiction: 18.20.1.1. in order to enable any Finance Party to enforce its rights under any Finance Document; or 18.20.1.2. by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document, that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in that jurisdiction. 18.20.2. No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any Relevant Jurisdiction by reason only of the execution, performance and/or enforcement of any Finance Document. 18.21. Repetition 18.21.1. The Repeating Representations (other than the representation in sub- clause 18.10.4 of Clause 18.10 (No misleading information)) are deemed to be made by each Obligor by reference to the facts and circumstances then existing on: 18.21.1.1. the date of each Utilisation Request and the first day of each Interest Period; 18.21.1.2. in the case of an Additional Guarantor, the day on which it becomes (or it is proposed that it becomes) an Additional Guarantor; and 18.21.1.3. when the representation and warranty in Clause 18.9.1 (No default) is repeated on the date of a Utilisation Request for a Rollover Loan, the reference to a Default must be construed as a reference to an Event of Default. 18.21.2. The representation in sub-clause 18.10.4 of Clause 18.10 (No misleading information) is deemed to be made by each Obligor on the date of each Sustainability Compliance Certificate. 19. INFORMATION UNDERTAKINGS The undertakings in this Clause 19 remain in force from the Signature Date until the Final Discharge Date.
58 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 19.1. Financial statements The Borrower shall supply to the Agent in sufficient copies for all the Lenders: 19.1.1. as soon as the same become available, but in any event within 180 (one hundred and eighty) days after the end of each of its financial years: 19.1.1.1. its audited consolidated financial statements for that financial year; and 19.1.1.2. the audited financial statements of each Obligor for that financial year; and 19.1.2. as soon as the same become available, but in any event within 180 (one hundred and eighty) days after the end of each half of each of its financial years its unaudited consolidated financial statements for that financial half year. 19.2. Compliance Certificate 19.2.1. The Borrower shall supply to the Agent, with each set of financial statements delivered by it pursuant to Clause 19.1.1 and Clause 19.1.2 of Clause 19.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20 (Financial Covenants) as at the date as at which those financial statements were drawn up. 19.2.2. Each Compliance Certificate shall be signed by 2 (two) directors of the Borrower. 19.3. Requirements as to financial statements Each set of financial statements delivered by the Borrower pursuant to Clause 19.1 (Financial statements) shall be certified by a director of the relevant company as fairly presenting its financial condition as at the date as at which those financial statements were drawn up. 19.4. Group companies At the request of the Agent, the Borrower shall, when it delivers a Compliance Certificate, include a report certified by the Chief Financial Officer of the Group, confirm which of its Subsidiaries is a Material Company and confirming compliance with Clause 21.17 (Guarantor coverage) in any Compliance Certificate as at the last day of the Measurement Period to which the Compliance Certificate relates. 19.5. Year-end The Borrower shall not change its Accounting Reference Date. 19.6. Information: miscellaneous The Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests): 19.6.1. all documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors generally (or any class of them) at the same time as they are dispatched; 19.6.2. promptly upon becoming aware of them, the details of any litigation, arbitration, administrative proceedings, liquidation applications, winding up applications or business rescue applications which are current, threatened or pending against it or any other member of the Group, and which might, if adversely determined, have a Material Adverse Effect;
59 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 19.6.3. promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any member of the Group, and which might have a Material Adverse Effect; 19.6.4. promptly, such further information regarding the financial condition, business and operations of any member of the Group as any Finance Party (through the Agent) may reasonably request; 19.6.5. promptly, notice of any change in authorised signatories of it or any other Obligor signed by a director or company secretary of it or such other Obligor (as the case may be) accompanied by specimen signatures of any new authorised signatories; and 19.6.6. promptly upon request, such additional information or documentation as the Agent may require in order to verify that any signatory referred to in Clause 19.6.4 above has been duly authorised. 19.7. Notification of default 19.7.1. Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor). 19.7.2. Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). 19.8. Use of websites 19.8.1. The Borrower may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the "Website Lenders") who accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Agent (the "Designated Website") if: 19.8.1.1. the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; 19.8.1.2. both the Borrower and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and 19.8.1.3. the information is in a format previously agreed between the Borrower and the Agent. 19.8.2. If any Lender (a "Paper Form Lender") does not agree to the delivery of information electronically then the Agent shall notify the Borrower accordingly and the Borrower shall supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Borrower shall supply the Agent with at least one copy in paper form of any information required to be provided by it. 19.8.3. The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower and the Agent. 19.8.4. The Borrower shall promptly upon becoming aware of its occurrence notify the Agent if: 19.8.4.1. the Designated Website cannot be accessed due to technical failure;
60 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 19.8.4.2. the password specifications for the Designated Website change; 19.8.4.3. any new information which is required to be provided under this Agreement is posted onto the Designated Website; 19.8.4.4. any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or 19.8.4.5. the Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. 19.8.5. If the Borrower notifies the Agent under Clause 19.8.4.1 or Clause 19.8.4.5 above, all information to be provided by the Borrower under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing. 19.8.6. Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrower shall comply with any such request within 10 (ten) Business Days. 19.9. "Know your customer" checks 19.9.1. If: 19.9.1.1. the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the Signature Date; 19.9.1.2. any change in the status of an Obligor (or of a Holding Company of an Obligor) after the Signature Date; or 19.9.1.3. a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, obliges the Agent or any Lender (or, in the case of sub-clause 19.9.1.3 above, any prospective new Lender) to comply with "know your customer" or similar identification procedures (whether in terms of the Financial Intelligence Centre Act, 2001 or otherwise) in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in sub- clause 19.9.1.3, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in sub-clause 19.9.1.3, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
61 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 19.9.2. The Borrower shall, by not less than 10 (ten) Business Days' prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Guarantor pursuant to Clause 23 (Changes to the Obligors). 19.9.3. Following the giving of any notice pursuant to Clause 19.9.2 above, if the accession of such Additional Guarantor obliges the Agent or any Lender to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Clause 19.9.2 above, on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Guarantor. 19.10. Sustainability Compliance Certificate, Sustainability Report and Verification Report 19.10.1. The Borrower shall procure that the Agent receives, in sufficient copies for all the Lenders, as soon as the same becomes available but, subject to sub- clause 19.10.2, in any event within 180 (one hundred and eighty) days after the end of each SLL Reference Period, the Sustainability Compliance Certificate for that SLL Reference Period. 19.10.2. The Sustainability Compliance Certificate shall: 19.10.2.1. set out (in reasonable detail): 19.10.2.1.1. the Group's performance (in accordance with the relevant Calculation Methodology) in respect of each SPT for each KPI for the relevant SLL Reference Period, together with the relevant calculations; and 19.10.2.1.2. any Sustainability Margin Adjustment to be applied in accordance with Clause 8.5 (Sustainability Margin Adjustment) and the applicable Margin following application of such Sustainability Margin Adjustment (if any); 19.10.2.2. attaching the Group's sustainability-related information for each KPI for the relevant SLL Reference Period in sufficient detail for the Lenders to assess whether the SPTs have been met during that SLL Reference Period, which may comprise the Group's publicly available annual sustainability report (with or without additions and/or clarifications) (a "Sustainability Report"); 19.10.2.3. attach a correct and complete copy of the verification report prepared for that SLL Reference Period by an External Reviewer in respect of each KPI that such External Reviewer has been appointed to review which satisfies the requirements of sub-clause 19.10.3 below (a "Verification Report"); and 19.10.2.4. confirm that the Sustainability Report and the Verification Report relating to the relevant SLL Reference Period and attached to the Sustainability Compliance Certificate is a correct and complete copy of the original and has not been amended or superseded as at the date of the Sustainability Compliance Certificate.
62 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 19.10.3. The Borrower shall procure that each Verification Report: 19.10.3.1. measures, calculates and verifies each KPI (in accordance with the relevant Calculation Methodology) for the applicable SLL Reference Period and confirms whether or not the applicable SPT for that SLL Reference Period has been met; and 19.10.3.2. refers to any Sustainability Information and/or sets out details of any changes to the Calculation Methodology and/or any Applicable ESG Standard since delivery of the last Sustainability Compliance Certificate (or, in relation to the first Verification Report, since the date of this Agreement) which, in each case, could reasonably be expected to materially affect any KPI and/or any SPT. 19.10.4. Each Sustainability Compliance Certificate shall be signed by 2 (two) directors of the Borrower. 19.11. Sustainability Compliance Certificate Inaccuracy 19.11.1. The Borrower shall notify the Agent upon becoming aware of any inaccuracy in a Sustainability Compliance Certificate (a "Sustainability Compliance Certificate Inaccuracy"). Such notice shall be provided together with: 19.11.1.1. a description (in reasonable detail) of the relevant Sustainability Compliance Certificate Inaccuracy; and 19.11.1.2. a revised Sustainability Compliance Certificate which complies with the requirements of 19.10.2 (Sustainability Compliance Certificate, Sustainability Report and Verification Report) and which corrects the relevant Sustainability Compliance Certificate Inaccuracy. 19.11.2. Notwithstanding any other provision of this Clause 19.11, a Sustainability Compliance Certificate Inaccuracy shall not constitute a Sustainability Breach, a Default or an Event of Default. 19.12. Sustainability Information 19.12.1. The Borrower shall procure that the Agent receives, promptly upon request, any additional information which any Lender (through the Agent) may reasonably request in order to: 19.12.1.1. determine and confirm if any SPT has been met; or 19.12.1.2. otherwise determine a member of the Group's compliance with its obligations under any Sustainability Provision. 19.12.2. Each Obligor shall notify the Agent of any Sustainability Breach (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor). 19.12.3. The Borrower shall promptly notify the Agent: 19.12.3.1. upon becoming aware that an External Reviewer has threatened to terminate its appointment, or that an External Reviewer's appointment has been terminated; and 19.12.3.2. of the appointment of any successor External Reviewer.
63 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 19.12.4. The Parties acknowledge and agree that the Agent and the Lenders may rely, without independent verification, upon the accuracy, adequacy and completeness of the Sustainability Information, and that neither the Agent nor any Lender: 19.12.4.1. assumes any responsibility or has any liability for the Sustainability Information; or 19.12.4.2. has an obligation to conduct any appraisal of any Sustainability Information. 20. FINANCIAL COVENANTS 20.1. Financial definitions in this Agreement: 20.1.1. "Borrowings" means, in relation to any member of the Group at any time, the aggregate outstanding principal, capital or nominal amount (and any fixed or minimum premium payable on prepayment or redemption) of any indebtedness of that person for or in respect of: 20.1.1.1. moneys borrowed and debit balances at banks or other financial institutions; 20.1.1.2. any acceptances under any acceptance credit or bill discount facility (or dematerialised equivalent); 20.1.1.3. any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; 20.1.1.4. any Finance Lease; 20.1.1.5. receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); 20.1.1.6. any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Termination Date; 20.1.1.7. any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind the entry into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 90 (ninety) days after the date of supply; 20.1.1.8. any amount raised under any other transaction (including any forward sale or purchase agreement, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing; and 20.1.1.9. (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in Clauses 20.1.1.1 to 20.1.1.8 above. 20.1.2. "Cash" means in respect of any Measurement Period, cash as defined in accordance with IFRS, excluding restricted cash.
64 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 20.1.3. "EBITDA" means, in respect of any Measurement Period, the consolidated net operating profit of the Group (as determined in accordance with IFRS in each case during such Measurement Period) before taxation (excluding the results from discontinued operations): 20.1.3.1. before deducting any interest (including interest related to the unwinding of any provision), commission, fees, discounts, prepayment fees, premiums or charges and other finance payments whether paid, payable or capitalised by any member of the Group (calculated on a consolidated basis); 20.1.3.2. not including any accrued interest owing to any member of the Group; 20.1.3.3. before taking into account any Exceptional Items; 20.1.3.4. before deducting any acquisition costs; 20.1.3.5. before taking into account any unrealised gains or losses on any financial instrument (other than any derivative instrument which is accounted for on a hedge accounting basis); 20.1.3.6. after adding back any amount attributable to the amortisation, depreciation or impairment of assets of members of the Group (and taking no account of the reversal of any previous impairment charge made in that Measurement Period). 20.1.4. "Exceptional Items" means any exceptional, once-off, nonrecurring or extraordinary items. 20.1.5. "Finance Charges" means, for any Measurement Period, the aggregate amount of the accrued interest, commission, fees, discounts, prepayment fees, premiums or charges and other finance payments paid or payable by an Obligor in cash or capitalised in respect of that Measurement Period under the Finance Documents: 20.1.5.1. including any upfront fees or costs (including agreed legal fees); and 20.1.5.2. including the interest (but not the capital) element of payments in respect of Finance Leases, and so that no amount shall be added (or deducted) more than once. 20.1.6. "Finance Lease" means any lease or hire purchase contract, a liability under which would, in accordance with the IFRS, be treated as a balance sheet liability (other than a lease or hire purchase contract which would, in accordance with the Accounting Principles in force prior to 1 January 2019 (namely before implementation of IFRS16), have been treated as an operating lease); 20.1.7. "Interest Cover Ratio" means the ratio of EBITDA to Net Finance Charges in respect of any Measurement Period; 20.1.8. "Leverage Ratio" means the ratio of Total Net Debt to EBITDA in respect of any Measurement Period; 20.1.9. "Measurement Date" means the last day of each Measurement Period; 20.1.10. "Measurement Period" means each rolling period of 12 (twelve) Months ending on 30 June or 31 December;
65 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 20.1.11. "Net Finance Charge" means Finance Charges after deducting interest earned on Cash and cash equivalents; 20.1.12. "Total Debt" means the aggregate amount of all Borrowings (but excluding any Borrowings owed to any other member of the Group), provided that no amount shall be included more than once; and 20.1.13. "Total Net Debt" means Total Debt after deducting Cash and cash equivalents. 20.2. Financial condition The Borrower shall ensure that as at each Measurement Date and for the Measurement Period to which such Measurement Date relates: 20.2.1. the Interest Cover Ratio shall not be less than 4.00 x; and 20.2.2. the Leverage Ratio shall not exceed 2.00 x. 20.3. Financial testing 20.3.1. The financial covenants set out in Clause 20.3 (Financial condition) shall be calculated in accordance with IFRS and tested by reference to each of the financial statements delivered pursuant to Clauses 19.1.1 and 19.1.2 of Clause 19.1 (Financial Statements) and/or each Compliance Certificate delivered pursuant to Clause 19.2 (Compliance Certificate). 20.3.2. If the annual financial statements are not available when any covenant referred to in Clause 20.2 (Financial condition) is tested and where relevant information cannot be readily extracted when requested by the Agent, the Borrower shall with 5 (five) Business Days following a request by the Agent, provide additional supporting schedules signed by two directors of the Borrower, in order to verify the accuracy of the information thus provided. 21. GENERAL UNDERTAKINGS The undertakings in this Clause 21 remain in force from the Signature Date until the Final Discharge Date. 21.1. Authorisations Each Obligor shall promptly: 21.1.1. obtain, comply with and do all that is necessary to maintain in full force and effect; and 21.1.2. supply certified copies to the Agent of, any Authorisation required under any law or regulation of a Relevant Jurisdiction to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document. 21.2. Compliance with laws Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply in all respects with all laws that are material to which it may be subject.
66 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 21.3. Negative pledge 21.3.1. No Obligor shall (and the Borrower shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets. 21.3.2. No Obligor shall (and the Borrower shall ensure that no other member of the Group will): 21.3.2.1. sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group; 21.3.2.2. sell, transfer or otherwise dispose of any of its receivables on recourse terms; 21.3.2.3. enter into or permit to subsist any title retention arrangement; 21.3.2.4. enter into or permit to subsist any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or 21.3.2.5. enter into or permit to subsist any other preferential arrangement having a similar effect, in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset. 21.3.3. Clauses 21.3.1 and 21.3.2 above do not apply to any Permitted Security. 21.4. Disposals 21.4.1. No Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset. 21.4.2. Clause 21.4.1 above does not apply to any sale, lease, transfer or other disposal which is a Permitted Disposal. 21.5. Merger 21.5.1. No Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger or corporate reconstruction. 21.5.2. Clause 21.5.1 above does not apply to any sale, lease, transfer or other disposal permitted pursuant to Clause 21.4 (Disposals). 21.6. Acquisitions 21.6.1. No Obligor shall and the Borrower shall ensure that no other member of the Group will) acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them). 21.6.2. Clause 21.6.1 above does not apply to an acquisition of a company, of shares, securities or a business or undertaking (or, in each case, any interest in any of them) or the incorporation of a company which is pursuant to a Permitted Acquisition.
67 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 21.7. Change of business Each Obligor shall procure that no substantial change is made to the general nature of its business or to the general nature of the business of the Group taken as a whole from that carried on as at the Signature Date, without the prior written consent of the Majority Lenders. 21.8. Joint ventures 21.8.1. Except as permitted under clause 21.8.2, no Obligor shall (and the Borrower shall ensure that no other member of the Group will): 21.8.1.1. enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or 21.8.1.2. transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing). 21.8.2. Clause 21.8.1 does not apply to any acquisition of (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture if such transaction is a Permitted Acquisition, a Permitted Disposal, a Permitted Loan, a Permitted Guarantee or a Permitted Joint Venture. 21.9. Arm's length basis 21.9.1. Except as permitted by clause 21.9.2, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into any transaction with any person except on arm's length terms and for full market value. 21.9.2. Clause 21.10.1 above does not apply to any intra-Group loans permitted under clause 21.10 (Loans or credit). 21.10. Loans or credit 21.10.1. Except as permitted under Clause 21.10.2 below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) be a creditor in respect of any Financial Indebtedness. 21.10.2. Clause 21.10.1 above does not apply to any Permitted Loan. 21.11. No Guarantees or indemnities 21.11.1. Except as permitted under Clause 21.11.2 below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person. 21.11.2. Clause 21.11.1 does not apply to a guarantee which is a Permitted Guarantee. 21.12. Financial Indebtedness 21.12.1. Except as permitted under Clause 21.12.2 below, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.
68 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 21.12.2. Clause 21.12.1 above does not apply to Financial Indebtedness which is Permitted Financial Indebtedness. 21.13. Treasury Transactions 21.13.1. Except as permitted under Clause 21.13.2, no Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into a Treasury Transaction. 21.13.2. Clause 21.13.1 does not apply to a Treasury Transaction which is a Permitted Treasury Transaction 21.14. Environmental compliance Each Obligor (and the Borrower shall ensure that every other member of the Group will) shall: 21.14.1. comply with all Environmental Law; 21.14.2. obtain, maintain and ensure compliance with all requisite Environmental Permits; 21.14.3. implement procedures to monitor compliance with and to prevent liability under any Environmental Law, where failure to do so has or is reasonably likely to have a Material Adverse Effect. 21.15. Environmental claims Each Obligor shall (and the Borrower shall ensure that every other member of the Group will), promptly upon becoming aware of the same, inform the Agent in writing of: 21.15.1. any Environmental Claim against it or any other member of the Group which is current, pending or threatened; and 21.15.2. any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against it or any member of the Group, where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect. 21.16. Sanctions and Anti-corruption Laws 21.16.1. Each Obligor will (and the Borrower shall ensure that every other member of the Group will): 21.16.1.1. take all reasonable steps to ensure that appropriate controls and safeguards are in place, designed to prevent it from being or becoming involved in a Sanctioned Transaction; and 21.16.1.2. conduct its businesses in compliance with applicable Anti-Corruption Laws and maintain policies and procedures designed to promote and achieve compliance with such laws. 21.16.2. No Obligor shall (and the Borrower shall ensure that none of its Subsidiaries will) directly or indirectly use the proceeds of the Facility for any purpose which would constitute a breach any Anti-Corruption Law.
69 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 21.16.3. Each Obligor shall (and the Borrower shall ensure that none of its Subsidiaries will): 21.16.3.1. conduct its businesses in compliance with applicable Anti-Corruption Laws; and 21.16.3.2. maintain policies and procedures designed to promote and achieve compliance with such laws. 21.17. Guarantor Coverage 21.17.1. Each Obligor shall ensure that: 21.17.1.1. any member of the Group which is a Material Company as at the Effective Date, is a Guarantor; and 21.17.1.2. any member of the Group which becomes a Material Company after the Effective Date becomes a Guarantor in accordance with Clause 23.2 (Additional Guarantors). 21.17.2. Each Obligor shall ensure that: 21.17.2.1. the aggregate earnings before interest, tax, depreciation and amortisation (calculated on the same basis as EBITDA) of the Obligors and represents not less than 80% (eighty percent) of EBITDA; and 21.17.2.2. the aggregate gross tangible assets (calculated on an unconsolidated basis and excluding all intra-group items and investments in Subsidiaries of any member of the Group) of the Obligors represents not less than 80% (eighty percent) of consolidated gross tangible assets of the Group. 21.17.2.3. The Borrower shall measure and confirm its compliance with this Clause 21.16 whenever it delivers a Compliance Certificate. 21.18. Insurances Each Obligor shall maintain insurances in relation to its business and assets with reputable underwriters or insurance companies against those risks and to the extent as is usual for companies carrying on the same or substantially similar business. 21.19. Constitutional Documents Each Obligor shall procure that no change is made to its constitutional documents in a manner or to an extent which is reasonably likely to adversely affect the interests of the Lenders under the Finance Documents. 21.20. Taxation Each Obligor shall duly and punctually pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring material penalties, except to the extent: 21.20.1. that such payment is being contested in good faith; 21.20.2. adequate reserves are being maintained for those Taxes; and 21.20.3. where such payment can be lawfully withheld.
70 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 21.21. Assets 21.21.1. Each Obligor shall ensure that it has good title to, or validly leases or licences, all of the assets necessary to carry on its business. 21.21.2. Each Obligor shall maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business 21.22. Declassification Event and consequences 21.22.1. On and at any time after the occurrence of a Declassification Event the Agent may, and shall if so directed by the Majority Lenders, by no less than 30 (thirty) Business Days' notice to the Borrower, declassify the Facility as "sustainability- linked". 21.22.2. With effect from the Declassification Date: 21.22.2.1. Clause 8.5 (Sustainability Margin Adjustment) and each Sustainability Provision shall cease to apply; and 21.22.2.2. no Sustainability Margin Adjustment will apply to any Utilisation. 21.22.3. The Facility may not be re-classified as "sustainability-linked" on or after the Declassification Date. 21.22.4. No Obligor shall (and the Borrower shall ensure that no other member of the Group will) make any disclosure that references the Facility or any Utilisation as "sustainability-linked" at any time on or after the Declassification Date. 21.23. Sustainability Framework and publicity 21.23.1. The Borrower shall finalise, adopt and publish a Sustainability Framework by no later than the date that falls 18 (eighteen) Months after the Effective Date. 21.23.2. No Obligor shall (and the Borrower shall ensure that no other member of the Group will) make any disclosure that references the Facility or any Utilisation under the Facility as “sustainability-linked” at any time: 21.23.2.1. prior to the publication of the Sustainability Framework and the occurrence of the SLL Classification Date; or 21.23.2.2. after the Declassification Date. 21.24. Subordination by Obligors 21.24.1. Subject to clause 21.24.2, each Obligor unconditionally and irrevocably subordinates its claims against any other Obligor in favour of any claims of the Finance Parties under the Finance Documents. 21.24.2. Until the Final Discharge Date: 21.24.2.1. no Obligor shall call an event of default or redemption event (or other analogous event however described) against any other Obligor and/or accelerate any indebtedness or other amount owing by any other Obligor to it;
71 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 21.24.2.2. no payment (whether directly or indirectly) of any amount payable (whether it be in whole or in part) by an Obligor to any other Obligor in respect of or arising from any claims shall be made or accepted by the Obligors at any time following the occurrence of an Event of Default under the Finance Documents that is continuing; 21.24.2.3. the Obligors shall not take, accept or receive the benefit of any security from any other Obligor; 21.24.2.4. no Obligor shall dispose of or encumber its shares in or claims against any other Obligor; 21.24.2.5. no Obligor shall obtain or enforce any judgment against any other Obligor arising from or in connection with the Finance Parties’ claims; 21.24.2.6. no Obligor shall, in relation to any liability arising out of or in connection with the Finance Parties’ claims, petition or apply for or vote in favour of any resolution for the winding up, dissolution, sequestration or administration, or the commencement of business rescue proceedings, or any analogous or similar processes in relation to any other Obligor; 21.24.2.7. if an Obligor is placed in liquidation (whether provisional or final), or effects a composition, compromise, or rescheduling with any of its creditors or if a proposal and sanction of a scheme of arrangement in respect of an Obligor occurs or if an Obligor commences business rescue proceedings, then the other Obligors undertake in respect of any claim proved by any of them that they shall hold any money received by them in trust on behalf of and to the order of the Agent and shall pay any such amounts to the Agent immediately on written demand by the Agent to the extent required in order to pro tanto discharge the aforesaid claims in respect of the Finance Parties; 21.24.2.8. no Obligor shall be entitled to pledge, assign, cede or otherwise encumber or transfer its claims against any other Obligor to any person unless and until it has procured that the pledgee, assignee or cessionary (as applicable) subordinates such claims in writing in favour of the claims of the Finance Parties on the same terms and conditions as are contained in this Agreement and such person so subordinates such claims (in a form and substance acceptable to the Agent); 21.24.2.9. without limiting the Finance Parties’ rights in any way, any payment accepted by an Obligor from any other Obligor in contravention, whether intentional or unintentional, of the terms of the Finance Documents, shall be repaid by that Obligor to the other Obligor immediately on written demand by the Agent and until so repaid shall be held in trust for and to the order of the Agent; 21.24.2.10. no Obligor shall enforce any judgment against any other Obligor nor make any application for the liquidation, composition, compromise, administration, commencement of business rescue proceedings or any analogous or similar process or the proposal of a scheme of arrangement in respect of any other Obligor, or collaborate with any other creditors of any other Obligor in the making of such application; and
72 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 21.24.2.11. no Obligor shall, in the event that business rescue proceedings have commenced in relation to any other Obligor in accordance with the provisions of Chapter 6 of the Companies Act, (in its capacity as shareholder and/or creditor of the other Obligor (as the case may be)): 21.24.2.11.1. vote to approve or oppose a proposed business rescue plan in relation to such business rescue proceedings in the manner contemplated in section 152(3)(c) of the Companies Act; and/or 21.24.2.11.2. provide, or call for, a vote of approval for the preparation and publication of a revised business rescue plan as contemplated in section 153(1) of the Companies Act; and/or 21.24.2.11.3. make a binding offer to purchase the voting interests of one or more persons who opposed adoption of the business rescue plan in the manner contemplated in section 153(1)(b)(ii) of the Companies Act, if such vote, provision or offer would reduce the amounts payable to the Finance Parties under the Finance Documents, unless, in each case, it has obtained the prior written consent of the Agent. 21.25. Reciprocal undertaking The Parties shall amend the Overdraft Facility Letter in the manner required under Clause 3.1.2 of Schedule 1 (General Provisions) thereof (and the Borrower shall use its best endeavours to ensure that such amendments are effected) by no later than 8 August 2024 (or such later date as the lender under the Overdraft Facility Letter may permit in writing). 22. EVENTS OF DEFAULT Each of the events or circumstances set out in this Clause 21.25 is an Event of Default (save for Clause 22.16 (Acceleration)). 22.1. Non-payment An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless: 22.1.1. its failure to pay is caused by: 22.1.1.1. administrative or technical error; or 22.1.1.2. a Disruption Event; and 22.1.2. payment is made within 5 (five) Business Days of its due date. 22.2. Financial covenants Any requirement of Clause 20 (Financial covenants) is not satisfied.
73 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 22.3. Other obligations 22.3.1. An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 22.1 (Non-payment) and Clause 22.2 (Financial covenants)). 22.3.2. No Event of Default under Clause 22.3.1 above will occur if the failure to comply is capable of remedy and is remedied within 15 (fifteen) Business Days of the Agent giving notice to the Borrower. 22.3.3. No Event of Default will occur under this Clause 22.3 by reason only of an Obligor's failure to comply with a Sustainability Provision. 22.4. Misrepresentation 22.4.1. Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made, provided that if it is capable of remedy, no Event of Default will occur if the same is remedied within 10 (ten) Business Days of the Agent giving notice to the Borrower. 22.4.2. No Event of Default will occur under this Clause 22.4 to the extent that the representation or statement concerns, or the document consists of, Sustainability Information. 22.5. Cross default 22.5.1. Any Financial Indebtedness of an Obligor is not paid when due nor within any originally applicable grace period. 22.5.2. Any Financial Indebtedness of an Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). 22.5.3. Any commitment for any Financial Indebtedness of an Obligor is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described). 22.5.4. Any creditor of an Obligor becomes entitled to declare any Financial Indebtedness of an Obligor due and payable prior to its specified maturity as a result of an event of default (however described). 22.5.5. No Event of Default will occur under this Clause 22.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within Clauses 22.5.1 to 22.5.4 above is less than ZAR100,000,000 (one hundred million Rand) (or its equivalent in any other currency or currencies). 22.6. Insolvency 22.6.1. A member of the Group is or is deemed by any authority or legislation to be: 22.6.1.1. unable or admits inability to pay its debts as they fall due; 22.6.1.2. suspends making payments on any of its debts; or
74 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 22.6.1.3. by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness. 22.6.2. A member of the Group is or is deemed by any authority or legislation to be Financially Distressed (as defined in the Companies Act 2008). 22.6.3. The value of the assets of any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities). 22.6.4. A moratorium is declared in respect of any indebtedness of any member of the Group. 22.7. Insolvency and business rescue proceedings 22.7.1. Any corporate action, legal proceedings or other procedure or step is taken in relation to: 22.7.1.1. the suspension of payments, a moratorium of any indebtedness, liquidation, winding-up, dissolution, administration, judicial management, business rescue or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor; 22.7.1.2. a composition, compromise, assignment or arrangement with any creditor of any member of the Group; 22.7.1.3. the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrative receiver, administrator, compulsory manager, judicial manager, business rescue practitioner or other similar officer in respect of any member of the Group or any of its assets; or 22.7.1.4. enforcement of any Security over any assets of any member of the Group, or any analogous procedure or step is taken in any jurisdiction. This Clause 22.7 shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 60 (sixty) days of commencement. 22.7.2. A meeting is proposed or convened by the directors of any member of the Group, a resolution is proposed or passed, application is made or an order is applied for or granted, to authorise the entry into or implementation of any business rescue proceedings (or any similar proceedings) in respect of any member of the Group or any analogous procedure or step is taken in any jurisdiction. 22.8. Creditors' process Any expropriation, attachment, sequestration, implementation of any business rescue plan, distress or execution affects any asset or assets of a member of the Group having an aggregate value of in excess of ZAR100,000,000 (one hundred million Rand). 22.9. Ownership of the Obligors An Obligor (other than the Borrower) is not or ceases to be a Subsidiary of the Borrower
75 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 22.10. Unlawfulness It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents. 22.11. Cessation of business Any Obligor suspends or ceases to carry on all or a substantial part of its business or substantially changes the nature of the business undertaken by it as at the Signature Date, except pursuant to a Permitted Disposal. 22.12. Audit qualification 22.12.1. The Auditors of the Borrower qualify the audited annual consolidated financial statements of the Group in any material respect. 22.12.2. The Auditors of any Obligor qualifies the financial statements of that Obligor, with a negative opinion or a negative disclaimer, or withhold their opinion entirely. 22.13. Expropriation 22.13.1. The authority or ability of any Obligor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, compulsory acquisition, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person. 22.13.2. By the authority of any governmental, regulatory or other authority or other person: 22.13.2.1. the management of any Obligor is wholly or substantially replaced; or 22.13.2.2. all or a majority of the shares of an Obligor or the whole or any part of its assets or revenues is seized, expropriated or compulsorily acquired. 22.14. Repudiation An Obligor (or any other relevant party) repudiates a Finance Document or purports to repudiate a Finance Document or evidences an intention to repudiate a Finance Document. 22.15. Material adverse change Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect. 22.16. Acceleration On and at any time after the occurrence of an Event of Default the Agent may by notice to the Borrower: 22.16.1. cancel the entire Commitments whereupon they shall immediately be cancelled; 22.16.2. declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or 22.16.3. declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders.
76 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 23. CHANGES TO THE OBLIGORS 23.1. Cessions and delegations by Obligors No Obligor may cede any of its rights or delegate any of its obligations under the Finance Documents. 23.2. Additional Guarantors 23.2.1. Subject to sub-clauses 19.9.2 and 19.9.3 of Clause 19.9 ("Know your customer" checks), each Obligor shall procure that any member of the Group which becomes a Material Company after the Effective Date shall as soon as possible, but in any event within 20 (twenty) Business Days of becoming a Material Company, become an Additional Guarantor. 23.2.2. If a member of the Group is required to accede and become an Additional Guarantor in order in order to comply with Clause 21.17.2 of Clause 21.17 (Guarantor Coverage), that member shall do so by no later than 20 (twenty) Business Days after the Borrower or a Lender became aware that an accession was required to ensure compliance Clause 21.17.2 of Clause 21.17 (Guarantor Coverage). 23.2.3. Subject to compliance with the provisions of Clauses 19.9.2 and 19.9.3 of Clause 19.8 ("Know your customer" checks), the Borrower may request that any of its wholly owned Subsidiaries become an Additional Guarantor. 23.2.4. A member of the Group shall become an Additional Guarantor if: 23.2.4.1. the Borrower and the proposed Additional Guarantor deliver to the Agent a duly completed and executed Accession Letter; and 23.2.4.2. the Agent has received all of the documents and other evidence listed in Part II (Conditions Precedent to be delivered by an Additional Guarantor) of Schedule 2 (Conditions precedent) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent. 23.2.5. The Agent shall notify the Borrower promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II (Conditions Precedent to be delivered by an Additional Guarantor) of Schedule 2 (Conditions precedent). 23.3. Repetition of Representations Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing. 23.4. Resignation of a Guarantor 23.4.1. The Borrower may request that a Guarantor (other than the Borrower) ceases to be a Guarantor by delivering to the Agent a Resignation Letter.
77 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 23.4.2. The Agent shall (on the instructions of the Majority Lenders) accept a Resignation Letter and notify the Borrower and the Lenders of its acceptance if no Default is continuing or would result from the acceptance of the Resignation Letter (and the Borrower has confirmed this is the case). 24. CHANGES TO THE LENDERS 24.1. Cessions and delegations by the Lenders 24.1.1. Subject to the provisions of this Clause 24, a Lender (the "Existing Lender") may cede and/or delegate (a "Transfer") any or all of its rights and/or obligations under this Agreement to a Permitted Transferee (a "New Lender"). 24.1.2. The Borrower consents to any splitting of claims which may arise as a result of a Transfer implemented under this Agreement. 24.2. Conditions of Transfer 24.2.1. The consent of the Borrower is not required for a Transfer by an Existing Lender if: 24.2.1.1. the New Lender is any entity listed in Schedule 9 (Permitted Transferees) 24.2.1.2. the New Lender is another Lender or an Affiliate of a Lender; or 24.2.1.3. such Transfer is made at a time when a Default is continuing. 24.2.2. Except as detailed above and subject to Clause 24.2.3 below, the express consent of the Borrower is required for a Transfer to a prospective New Lender. 24.2.3. A Transfer of a part of its Commitment or part of its rights and obligations under this Agreement and the Finance Documents by an Existing Lender to a New Lender shall not be permitted if: 24.2.3.1. it results in more than 4 (four) Lenders holding Commitments under this Agreement at any time; or 24.2.3.2. the amount of the Commitment being transferred is less than ZAR250,000,000 (two hundred and fifty million Rand). 24.2.4. Except as detailed in Clause 24.2.1, the express consent of the Borrower is required for a Transfer to which the further restrictions in Clause 24.2.3 apply. If no express consent has been granted, the Borrower will be deemed to have refused its consent in respect of a Transfer to which the further restrictions in Clause 24.2.3 apply 7 (seven) Business Days after the Agent has requested such consent in writing. 24.2.5. A Transfer will only be effective if the procedure set out in Clause 24.4 is complied with. 24.3. Limitation of responsibility of Existing Lenders 24.3.1. Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: 24.3.1.1. the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents; 24.3.1.2. the financial condition of the Borrower;
78 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 24.3.1.3. the performance and observance by the Borrower of its obligations under the Finance Documents or any other documents; or 24.3.1.4. the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document, and any representations or warranties implied by law are excluded. 24.3.2. Each New Lender confirms to the Existing Lender and the other Finance Parties that it: 24.3.2.1. has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of the Borrower and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and 24.3.2.2. will continue to make its own independent appraisal of the creditworthiness of the Borrower and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force. 24.3.3. Nothing in any Finance Document obliges an Existing Lender to: 24.3.3.1. accept a re-Transfer from a New Lender of any of the rights and obligations Transferred under this Clause 24; or 24.3.3.2. support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by the Borrower of its obligations under the Finance Documents or otherwise. 24.3.4. If: 24.3.4.1. a Lender Transfers any of its rights or obligations under the Finance Documents; and 24.3.4.2. as a result of circumstances existing at the date the Transfer occurs, an Obligor would be obliged to make a payment to the New Lender under Clause 12 (Tax gross-up and indemnities) or Clause 13 (Increased Costs), then the New Lender is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the Transfer had not occurred. 24.4. Procedure for transfer 24.4.1. Subject to the conditions set out in Clause 24.2, a Transfer is effected in accordance with Clause 24.4.3 when the Agent execute an otherwise duly completed Transfer Certificate delivered to it by the Borrower and the New Lender. The Agent shall, subject to Clause 24.4.2, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate. 24.4.2. The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the New Lender once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations that apply to it (if any) in relation to the transfer to such New Lender.
79 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 24.4.3. On the Transfer Date: 24.4.3.1. the Transfer shall take effect under the Finance Documents so that the rights and/or obligations which are the subject of the Transfer shall be ceded and delegated by the Existing Lender to the New Lender (being the "Transferred Rights and Obligations"); 24.4.3.2. the Obligors shall perform their obligations and exercise their rights in relation to the Transferred Rights and Obligations in favour of or against the New Lender, as the case may be; 24.4.3.3. the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been a Lender from the Signature Date with the rights and/or obligations comprising the Transferred Rights and Obligations; 24.4.3.4. the Existing Lender shall be released from further obligations to each other Lender under the Finance Documents to the extent of the Transferred Rights and Obligations; and 24.4.3.5. the New Lender shall become a Party as a "Lender". 24.5. Costs resulting from a change of Lender If: 24.5.1. a Lender Transfers any of its rights or obligations under the Finance Documents; and 24.5.2. as a result of circumstances existing at the date the Transfer occurs, the Borrower would be obliged to make a payment to the New Lender under Clause 12 (Tax Gross-up and Indemnities)) or Clause 13 (Increased Costs), then, the New Lender is only entitled to receive payment under those clauses to the same extent as the Existing Lender would have been if the Transfer or change had not occurred. 24.6. Copy of Transfer Certificate to Company The Agent shall send to the Borrower a copy of each Transfer Certificate executed by it in accordance with Clause 24.4.1 as soon as reasonably practicable after it has executed any such Transfer Certificate. 25. ROLE OF THE AGENT 25.1. Appointment of the Agent 25.1.1. Each other Finance Party appoints the Agent to act as its agent under and in connection with the Finance Documents. 25.1.2. Each other Finance Party authorises the Agent to perform the duties, obligations and responsibilities and exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
80 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.2. Instructions 25.2.1. The Agent shall: 25.2.1.1. unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by: 25.2.1.1.1. all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and 25.2.1.1.2. in all other cases, the Majority Lenders; and 25.2.1.2. not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 25.2.1.1 above. 25.2.2. The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion. The Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested. 25.2.3. Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties. 25.2.4. The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions. 25.2.5. In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders. 25.2.6. The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. 25.3. Duties of the Agent 25.3.1. The Agent's duties under the Finance Documents are solely mechanical and administrative in nature. 25.3.2. Subject to Clause 25.3.3 below, the Agent shall forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party as soon as reasonably practicable after having received that original or copy document as the case may be. 25.3.3. Without prejudice to Clause 24.6 (Copy of Transfer Certificate to Company), Clause 25.3.2 above shall not apply to any Transfer Certificate.
81 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.3.4. Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. 25.3.5. If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties. 25.3.6. If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent) under this Agreement it shall promptly notify the other Finance Parties. 25.3.7. The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no other shall be implied). 25.4. No fiduciary duties 25.4.1. Nothing in any Finance Document constitutes the Agent as a trustee or fiduciary of any other person. 25.4.2. The Agent shall not be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account. 25.5. Business with the Group The Agent may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group. 25.6. Rights and discretions of the Agent 25.6.1. The Agent may: 25.6.1.1. rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised; 25.6.1.2. assume that: 25.6.1.2.1. any instructions received by it from the Majority Lenders, any Lender or any group of Lender are duly given in accordance with the terms of the Finance Documents; and 25.6.1.2.2. unless it has received notice of revocation, that those instructions have not been revoked; and 25.6.1.3. rely on a certificate from any person: 25.6.1.3.1. as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or 25.6.1.3.2. to the effect that such person approves of any particular dealing, transaction, step, action or thing, as sufficient evidence that that is the case and, in the case of Clause 25.6.1 above, may assume the truth and accuracy of that certificate.
82 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.6.2. The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that: 25.6.2.1. no Default has occurred (unless it has actual knowledge of a Default arising under Clause 22.1 (Non-payment)); 25.6.2.2. any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and 25.6.2.3. any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors. 25.6.3. The Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts. 25.6.4. Without prejudice to the generality of Clause 25.6.3 above or Clause 25.6.5 below, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be necessary. 25.6.5. The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying. 25.6.6. The Agent may act in relation to the Finance Documents through its officers, employees and agents. 25.6.7. Unless a Finance Document expressly provides otherwise, the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. 25.6.8. Notwithstanding any other provision of any Finance Document to the contrary, the Agent is not obliged to do or omit to do anything if it would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. 25.6.9. Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it. 25.7. Responsibility for documentation The Agent is not responsible or liable for: 25.7.1. the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, an Obligor or any other person in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
83 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.7.2. the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; 25.7.3. any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise; or 25.7.4. the adequacy, accuracy or completeness of any Sustainability Information (whether oral or written) supplied by (or on behalf of) the Borrower, any member of the Group, the External Reviewer or any other person in or in connection with any Sustainability Report, any Verification Report and/or any sustainability provisions contemplated in this Agreement or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the Facility. 25.8. No duty to monitor The Agent shall not be bound to enquire: 25.8.1. whether or not any Default has occurred; 25.8.2. as to the performance, default or any breach by any Party of its obligations under any Finance Document; 25.8.3. whether any other event specified in any Finance Document has occurred; or 25.8.4. whether or not any Declassification Event, Sustainability Breach, Sustainability Amendment Event or a Sustainability Compliance Certificate Inaccuracy has occurred; or 25.8.5. as to the performance, default or any breach by any Obligor of its obligations under any Sustainability Provision. 25.9. Exclusion of liability 25.9.1. Without limiting Clause 25.9.2 below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent), the Agent will not be liable for: 25.9.1.1. any damages, costs or losses to any person, any diminution in value, or any liability whatsoever or arising as a result of taking or not taking any action under or in connection with any Finance Document unless directly caused by its gross negligence or wilful misconduct; 25.9.1.2. exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document, other than by reason of its gross negligence or wilful misconduct; or 25.9.1.3. without prejudice to the generality of Clauses 25.9.1.1 and 25.9.1.2 above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation, for negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of:
84 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.9.1.3.1. any act, event or circumstance not reasonably within its control; or 25.9.1.3.2. the general risks of investment in, or the holding of assets in, any jurisdiction, including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action. 25.9.2. No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 1.3 (Third party rights). 25.9.3. The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose. 25.9.4. Nothing in this Agreement shall oblige the Agent to carry out: 25.9.4.1. any "know your customer" or other checks in relation to any person: or 25.9.4.2. any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender or for any Affiliate of any Lender, on behalf of any Lender and each Lender confirms to the Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent. 25.9.5. Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document shall be limited to the amount of actual loss which has been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages. 25.9.6. The Agent is not acting in an advisory capacity to any person in respect of the SLLP nor will the Agent be obliged to verify whether the Facility will comply with the SLLP on behalf of any of the Finance Parties and each Finance Party is solely responsible at all times for making its own independent appraisal of, and analysis in relation to, each KPI, each SPT, the Sustainability Information and any other sustainability-linked provision of this Agreement.
85 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.10. Lenders' indemnity to the Agent Each Lender shall (in proportion to its share of the Commitments or, if the Commitments are then zero, to its share of the Commitments immediately prior to their reduction to zero) indemnify the Agent, within 3 (three) Business Days of demand, against, and pay to the Agent, any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 28.9 (Disruption to Payment Systems etc.) notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document). 25.11. Resignation of the Agent 25.11.1. The Agent may resign and appoint one of its Affiliates acting through an office in South Africa as successor by giving notice to the Lenders and the Borrower. 25.11.2. Alternatively the Agent may resign by giving 30 (thirty) days' notice to the Lenders and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Agent. 25.11.3. If the Majority Lenders have not appointed a successor Agent in accordance with sub-clause 25.11.2 within 30 (thirty) days after notice of resignation was given, the retiring Agent (after consultation with the Borrower) may appoint a successor Agent (acting through an office in South Africa). 25.11.4. The retiring Agent shall, at its own cost make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. 25.11.5. The Agent's resignation notice shall only take effect upon the appointment of a successor. 25.11.6. Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under sub-clause 25.11.4) but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Agent) and this Clause 25 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. 25.11.7. After consultation with the Borrower, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with Clause 25.11.2 above. In this event, the Agent shall resign in accordance with Clause 25.11.2 above. 25.12. Confidentiality 25.12.1. In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments. 25.12.2. If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.
86 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.13. Relationship with the Lenders 25.13.1. The Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender: 25.13.1.1. entitled to or liable for any payment due under any Finance Document on that day; and 25.13.1.2. entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, unless it has received not less than 5 (five) Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement. 25.13.2. Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address and (where communication by electronic mail or other electronic means is permitted under Clause 30.6 (Electronic communication)) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, electronic mail address, department and officer by that Lender for the purposes of Clause 30.2 (Addresses) and sub- clause 30.6.1 of Clause 30.6 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender. 25.14. Credit appraisal by the Lenders Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to: 25.14.1. the financial condition, status and nature of each member of the Group; 25.14.2. the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; 25.14.3. whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and 25.14.4. the adequacy, accuracy or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.
87 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 25.15. Deduction from amounts payable by the Agent If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted. 26. CONDUCT OF BUSINESS BY THE FINANCE PARTIES No provision of this Agreement will: 26.1. interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; 26.2. oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or 26.3. oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. 27. SHARING AMONG THE FINANCE PARTIES 27.1. Payments to Finance Parties If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from an Obligor other than in accordance with Clause 27 (Payment mechanics) (a "Recovered Amount") and applies that amount to a payment due under the Finance Documents then: 27.1.1. the Recovering Finance Party shall, within 3 (three) Business Days, notify details of the receipt or recovery, to the Agent; 27.1.2. the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 27 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and 27.1.3. the Recovering Finance Party shall, within 3 (three) Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 28.4 (Partial payments). 27.2. Redistribution of payments The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 28.4 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties. 27.3. Recovering Finance Party's rights 27.3.1. On a distribution by the Agent under Clause 27.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
88 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 27.3.2. If and to the extent that the Recovering Finance Party is not able to rely on its rights under Clause 27.3.1 above, the relevant Obligor shall be liable to the Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable. 27.4. Reversal of redistribution If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then: 27.4.1. each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and 27.4.2. as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor. 27.5. Exceptions 27.5.1. This Clause 27 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor. 27.5.2. A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if: 27.5.2.1. it notified that other Finance Party of the legal or arbitration proceedings; and 27.5.2.2. that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings. 28. PAYMENT MECHANICS 28.1. Payments to the Agent 28.1.1. On each date on which an Obligor is required to make a payment under a Finance Document, that Obligor shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) in ZAR for value by no later than 12h00 (Johannesburg time) on the due date and in such funds specified by the Agent by way of a funds flow schedule or otherwise. 28.1.2. Payment shall be made to such account in South Africa with such bank as the Agent specifies. 28.2. Distributions by the Agent Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 28.3 (Distributions to an Obligor) and Clause 28.4 (Clawback and pre- funding) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement to such account as that Party may notify to the Agent by not less than 5 (five) Business Days' notice with a bank in South Africa in writing.
89 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 28.3. Distributions to an Obligor The Agent may (with the consent of the Obligor or in accordance with Clause 29 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied. 28.4. Clawback and pre-funding 28.4.1. Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum. 28.4.2. Unless sub-clause 28.4.1 applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds. 28.4.3. If the Agent is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower: 28.4.3.1. the Agent shall notify the Borrower of that Lender's identity and the Borrower to whom that sum was made available shall on demand refund it to the Agent; and 28.4.3.2. the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender. 28.5. Partial payments 28.5.1. If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order: 28.5.1.1. first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent under the Finance Documents; 28.5.1.2. secondly, in or towards payment pro rata of any accrued interest, fees or commission due but unpaid under this Agreement; 28.5.1.3. thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and 28.5.1.4. fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. 28.5.2. The Agent shall, if so directed by the Majority Lenders, vary the order set out in sub-clauses 28.5.1.1 to 28.5.1.4 above. 28.5.3. Clauses 28.5.1 and 28.5.2 above will override any appropriation made by an Obligor.
90 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 28.6. No set-off by Obligors All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim. 28.7. Business Days 28.7.1. Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). In the event that the day for performance of any obligation to be performed in terms of any Finance Document should fall on a day which is not a Business Day, the relevant day for performance shall be the succeeding Business Day. 28.7.2. During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date. 28.8. Currency of account 28.8.1. ZAR is the currency of account and payment for any sum due from an Obligor under any Finance Document. 28.8.2. Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred. 28.9. Disruption to payment systems etc. If either the Agent determines (in its discretion) that a Disruption Event has occurred or the Agent is notified by the Borrower that a Disruption Event has occurred: 28.9.1. the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances; 28.9.2. the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in Clause 28.9.1 above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; 28.9.3. the Agent may consult with the Finance Parties in relation to any changes mentioned in Clause 28.9.1 but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances; 28.9.4. any such changes agreed upon by the Agent (acting on the instruction of the Majority Lenders) and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 34 (Amendments and waivers);
91 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 28.9.5. the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 28.9; and 28.9.6. the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 28.9.3. 29. SET-OFF A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. 30. NOTICES 30.1. Communications in writing Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by letter. 30.2. Addresses The address (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is: 30.2.1. in the case of the Borrower: Address: Constantia Office Park Cycad House, Cnr 14th Avenue and Hendrik Potgieter, Weltevreden Park, Gauteng, 1709, South Africa; E-mail: mpho.mashatola@drdgold.com; Attention: Mpho Mashatola; 30.2.2. in the case of an Original Guarantor, the address and other details identified with its name in Schedule 1 (Original Guarantors); 30.2.3. in the case of the Original Lender: Address: 135 Rivonia Road, Sandown, Sandton, 2196; E-mail: miningfinance1@nedbank.co.za; Attention: Lending Middle Office; 30.2.4. in the case of the Agent: 30.2.4.1. until (and including) the date of the first Transfer (if applicable), the details in sub-clause 30.2.3; 30.2.4.2. thereafter: Address: 135 Rivonia Road, Sandown, Sandton, 2196;
92 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 E-mail: agencynedbank@nedbank.co.za; Attention: Facility Agent, or any substitute address or department or officer as a Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than 5 (five) Business Days' notice. 30.3. Domicilia 30.3.1. Each of the Parties chooses its physical address provided under or in connection with Clause 30.2 (Addresses) as its domicilium citandi et executandi at which documents in legal proceedings in connection with this Agreement or any other Finance Document may be served. 30.3.2. Any Party may by written notice to the other Parties change its domicilium from time to time to another address, not being a post office box or a poste restante, in South Africa, provided that any such change shall only be effective on the fourteenth day after deemed receipt of the notice by the other Parties pursuant to Clause 30.4 (Delivery). 30.4. Delivery 30.4.1. Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective when received by the recipient and, unless the contrary is proved, shall be deemed to be received: 30.4.1.1. if delivered by hand, be deemed to have been received at the time of delivery; and 30.4.1.2. if by way of courier service, be deemed to have been received on the seventh Business Day following the date of such sending, and if a particular department or officer is specified as part of its address details provided under Clause 30.2 (Addresses), if addressed to that department or officer. 30.4.2. Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's signature below (or any substitute department or officer as the Agent shall specify for this purpose). 30.4.3. All notices from or to an Obligor shall be sent through the Agent. 30.4.4. Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors. 30.4.5. Any communication or document which becomes effective, in accordance with Clauses 30.4.1 to 30.4.3 above, after 5pm in the place of receipt shall be deemed only to become effective on the following day. 30.5. Notification of address Promptly upon changing its address, the Agent shall notify the other Parties.
93 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 30.6. Electronic communication 30.6.1. Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including without limitation, by way of posting to a secure website) if those two Parties: 30.6.1.1. notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and 30.6.1.2. notify each other of any change to their address or any other such information supplied by them by not less than 5 (five) Business Days’ notice. 30.6.2. Any electronic communication as specified in Clause 30.6.1 above to be made between and Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication, 30.6.3. Any electronic communication as specified in Clause 30.6.1 above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose. 30.6.4. Any electronic communication which becomes effective, in accordance with Clause 30.6.3 above, after 5pm in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day. 30.6.5. Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 30.6. 30.7. English language Any notice or other document given under or in connection with any Finance Document must be in English. 31. CALCULATIONS AND CERTIFICATES 31.1. Accounts In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate. 31.2. Certificates and Determinations Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, prima facie evidence of the matters to which it relates. 31.3. Day count convention Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 365 (three hundred and sixty five) days (irrespective of whether the year in question is a leap year).
94 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 32. PARTIAL INVALIDITY If, at any time, any provision of a Finance Document is or becomes illegal, invalid, unenforceable or inoperable in any respect under any law of any jurisdiction, neither the legality, validity, enforceability or operation of the remaining provisions nor the legality, validity, enforceability or operation of such provision under the law of any other jurisdiction will in any way be affected or impaired. The term “inoperable” in this Clause 32 shall include, without limitation, inoperable by way of suspension or cancellation. 33. REMEDIES AND WAIVERS No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under a Finance Document or other document or other indulgence shall operate as a waiver, nor shall any single or partial exercise of any right or remedy otherwise affect any of that Party’s rights in terms of or arising from any Finance Document or estop such Party from enforcing, at any time and without notice, strict and punctual compliance with each and every provision or term of any Finance Document. No consent to any waiver or novation of a Party’s rights in terms of or arising from any Finance Document shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law. 34. AMENDMENTS AND WAIVERS 34.1. Required consents 34.1.1. Subject to Clause 34.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties. 34.1.2. The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause. 34.1.3. Save as otherwise provided in this Clause 34, no amendment or waiver contemplated by this Clause 34 shall be of any force or effect unless in writing and signed by or on behalf of the relevant Parties. 34.2. Exceptions 34.2.1. Subject to Clause 34.3 (Replacement of Screen Rate) an amendment or waiver of any term of any Finance Document that has the effect of changing or which relates to: 34.2.1.1. this Clause 34; 34.2.1.2. the definition of "Majority Lenders" in Clause 1.1 (Definitions); 34.2.1.3. a change to the date of payment of any amount under the Finance Documents; 34.2.1.4. a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable; 34.2.1.5. an increase in or an extension of any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility; 34.2.1.6. a change to the Borrower or Guarantors other than in accordance with Clause 23 (Changes to the Obligors);
95 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 34.2.1.7. any provision which expressly requires the consent of all the Lenders; 34.2.1.8. the nature and scope of Clause 2.5 (Finance Parties' rights and obligations), Clause 7.1 (Mandatory prepayment - Illegality), Clause 24 (Changes to the Lenders), Clause 23 (Changes to the Obligors), this Clause 34, the governing law of any Finance Document, Clause 40 (Governing Law), or Clause 41 (Jurisdiction); 34.2.1.9. the nature or scope of the guarantee and indemnity granted under Clause 17 (Guarantee and Indemnity), shall not be made without the prior consent of all the Lenders. 34.2.2. An amendment or waiver which relates to the rights or obligations of the Agent (in its capacity as such) may not be effected without the consent of the Agent. 34.3. Replacement of Screen Rate 34.3.1. Any amendment or waiver which relates to: 34.3.1.1. providing for the use of a Replacement Benchmark; and 34.3.1.2. aligning any provision of any Finance Document to the use of that Replacement Benchmark; 34.3.1.3. enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Benchmark to be used for the purposes of this Agreement); 34.3.1.4. implementing market conventions applicable to that Replacement Benchmark; 34.3.1.5. providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or 34.3.1.6. adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Benchmark (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation), may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Obligors. 34.3.2. If any event of circumstance in Clause 34.3.1 has occurred and there is no consensus between the Agent and the Obligors, as contemplated in this Clause 34.3.1 as to any matter set out in such Clause, the provisions of Clause 10.3 (Cost of funding) shall apply until such consensus is reached. 34.3.3. In this Clause 34.2 (Replacement of Screen Rate): 34.3.3.1. "Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them.
96 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 34.3.3.2. "Replacement Benchmark" means a benchmark rate which is: 34.3.3.2.1. formally designated, nominated or recommended as the replacement for a Screen Rate by: 34.3.3.2.1.1. the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or 34.3.3.2.1.2. any Relevant Nominating Body, and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Benchmark" will be the replacement under sub- clause 34.3.3.2.1.2 above; 34.3.3.2.2. in the opinion of the Majority Lenders and the Obligors, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Screen Rate; or 34.3.3.2.3. in the opinion of the Majority Lenders and the Obligors, an appropriate successor to a Screen Rate. 34.3.3.3. "Screen Rate Replacement Event" means, in relation to a Screen Rate: 34.3.3.3.1. the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders and the Obligors, materially changed; 34.3.3.3.2. the following has occurred: 34.3.3.3.2.1. either the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or 34.3.3.3.2.2. information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent, provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;
97 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 34.3.3.3.3. the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate; 34.3.3.3.4. the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; 34.3.3.3.5. the administrator of that Screen Rate or its supervisor or any relevant regulatory or legislative authority announces that that Screen Rate may no longer be used; 34.3.3.3.6. the supervisor of the administrator of that Screen Rate makes a public announcement or publishes information stating that that Screen Rate is no longer or, as of a specified future date will no longer be, representative of the underlying market or economic reality that it is intended to measure and that representativeness will not be restored (as determined by such supervisor); 34.3.3.3.7. the administrator of that Screen Rate determines that that Screen Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Agent and the Obligors) temporary; 34.3.3.3.8. any Relevant Nominating Body formally designates, nominates or recommends a replacement for a Screen Rate which has become available for general use; or 34.3.3.3.9. in the opinion of the Majority Lenders and the Obligors, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement. 34.4. Sustainability amendments 34.4.1. The Borrower shall, as soon as reasonably practicable after a Sustainability Amendment Event (and in any event within 10(ten) Business Days following the occurrence of that Sustainability Amendment Event), provide details to the Agent of the effect such event could reasonably be expected to have on any KPI, SPT and/or the Sustainability Information and, if relevant, propose amendments to any Calculation Methodology, KPI, SPT and/or to any related term of this Agreement, to eliminate, accommodate or otherwise take into account the effect of the relevant Sustainability Amendment Event on the terms of this Agreement.
98 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 34.4.2. If a Sustainability Amendment Event has occurred, the Borrower and the Agent (acting on the instructions of all the Lenders) shall enter into negotiations in good faith for a period of up to 30 (thirty) Business Days (a "Sustainability Amendment Event Consultation Period") with a view to agreeing such amendments to any Calculation Methodology, KPI, SPT and/or any related terms of this Agreement, as are necessary for the purposes of eliminating, accommodating or otherwise taking into account the effect of the relevant Sustainability Amendment Event on the terms of this Agreement. 34.4.3. Any amendment to this Agreement agreed during a Sustainability Amendment Event Consultation Period shall be made with the consent of the Agent (acting on the instructions of the Lenders) and the Borrower. 34.4.4. If no amendment is agreed during a Sustainability Amendment Event Consultation Period, a Declassification Event to which the provisions of Clause 21.22 (Declassification Event and consequences) applies, shall occur on the Business Day after the expiration of the Sustainability Amendment Event Consultation Period. 34.4.5. The occurrence of a Sustainability Amendment Event, a Declassification Event or any failure to comply with the provisions of this Clause 34.4 will not constitute an Event of Default. 35. CONFIDENTIAL INFORMATION 35.1. Confidential Information Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 35.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information. 35.2. Disclosure of Confidential Information Any Finance Party may disclose: 35.2.1. to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 35.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; 35.2.2. to any other person: 35.2.2.1. to (or through) whom it Transfers (or may potentially Transfer) all or any of its rights and obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent and in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
99 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 35.2.2.2. with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation or other credit participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; 35.2.2.3. appointed by any Finance Party or by a person to whom sub- clause 35.2.2.1 or 35.2.2.3 applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf, (including, without limitation, any person appointed under sub-clause 25.13.2 of Clause 25.13 (Relationship with the Lenders)); 35.2.2.4. who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-clause 35.2.2.1 or 35.2.2.3; 35.2.2.5. to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; 35.2.2.6. to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; 35.2.2.7. who is a Party; or 35.2.2.8. with the consent of the Borrower; in each case, such Confidential Information as that Finance Party shall consider appropriate if: 35.2.2.8.1. in relation to sub-clauses 35.2.2.1 and 35.2.2.3, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; 35.2.2.8.2. in relation to sub-clause 35.2.2.4, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
100 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 35.2.2.8.3. in relation to sub-clauses 35.2.2.5, 35.2.2.6 and 35.2.2.7, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; and 35.2.2.8.4. to any person appointed by that Finance Party or by a person to whom sub-clause 35.2.2.1 or 35.2.2.3 applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this sub-clause 35.2.2.8.4 if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrower and the relevant Finance Party. 35.3. Entire agreement This Clause 35 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information. 35.4. Inside information Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose. 35.5. Notification of disclosure Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower: 35.5.1. of the circumstances of any disclosure of Confidential Information made pursuant to sub-clause 35.2.2.5 of Clause 35.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that clause during the ordinary course of its supervisory or regulatory function; and 35.5.2. upon becoming aware that Confidential Information has been disclosed in breach of this Clause 35 (Confidentiality).
101 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 35.6. Continuing obligations The obligations in this Clause 35 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of: 35.6.1. the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and 35.6.2. the date on which such Finance Party otherwise ceases to be a Finance Party. 36. CONFIDENTIALITY OF FUNDING RATES 36.1. Confidentiality and disclosure 36.1.1. The Agent and each Obligor agree to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by Clause 36.1.2 and 36.1.3. 36.1.2. The Agent may disclose: 36.1.2.1. any Funding Rate to the Borrower pursuant to Clause 8.4 (Notification of rates of interest); and 36.1.2.2. any Funding Rate to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration /Settlement Service Provider or such other form of confidentiality undertaking agreed between the Agent, the relevant Lender and the Obligors. 36.1.3. The Agent may disclose any Funding Rate and each Obligor may disclose any Funding Rate, to: 36.1.3.1. any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate s to be given pursuant to this sub-clause 36.1.3.1 is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or is otherwise bound by requirements of confidentiality in relation to it; 36.1.3.2. any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;
102 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 36.1.3.3. any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigation, proceedings or disputes if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and 36.1.3.4. any person with the consent of the relevant Lender, as the case may be. 36.2. Related obligations 36.2.1. The Agent and each Obligor acknowledge that each Funding Rate is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including, securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate. 36.2.2. The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender: 36.2.2.1. of the circumstances of any disclosure made pursuant to sub- clause 36.1.3.1 of Clause 36.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that clause during the ordinary course of its supervisory or regulatory function; and 36.2.2.2. upon becoming aware that any information has been disclosed in breach of this Clause 36. 36.3. No Event of Default No Event of Default will occur under Clause 22.3 (Other obligations) by reason only of an Obligor’s failure to comply with this Clause 36. 37. COUNTERPARTS Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document. 38. WAIVER OF IMMUNITY Each Obligor waives generally all immunity it or its assets or revenues may otherwise have in any jurisdiction, including immunity in respect of: 38.1. the giving of any relief by way of an interdict or order for specific performance or for the recovery of assets or revenues; and 38.2. the issue of any process against its assets or revenues for the enforcement of a judgment or, in an action in rem, for the arrest, detention or sale of any of its assets and revenues. 39. SOLE AGREEMENT The Finance Documents constitute the sole record of the agreement between the Parties in regard to the subject matter thereof.
103 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 40. GOVERNING LAW This Agreement and any non-contractual obligations arising out of or in connection with it are governed by South African law. 41. JURISDICTION 41.1. The Parties hereby irrevocably and unconditionally consent to the non-exclusive jurisdiction of the High Court of South Africa, Gauteng Local Division, Johannesburg (or any successor to that division) in regard to all matters arising from the Finance Documents (including a dispute relating to the existence, validity or termination of this Agreement or any non- contractual obligation arising out of or in connection with this Agreement) (a "Dispute"). 41.2. The Parties agree that the courts of South Africa are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. 41.3. Notwithstanding Clause 41.1 above, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. [SIGNATURE PAGES FOLLOW AFTER SCHEDULES]
104 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 1 - Original Guarantors Name of Original Guarantor Registration No. Ergo Mining Proprietary Limited, a limited liability company incorporated and existing in accordance with the laws of South Africa Address: Constantia Office Park Cycad House, cnr 14th Avenue and Hendrik Potgieter, Weltevreden Park, Gauteng, 1709, south Africa E-mail: mpho.mashatola@drdgold.com Attention: Mpho Mashatola 2007/004886/07 Far West Gold Recoveries Proprietary Limited, a limited liability company incorporated and existing in accordance with the laws of South Africa Address: Constantia Office Park Cycad House, cnr 14th Avenue and Hendrik Potgieter, Weltevreden Park, Gauteng, 1709, south Africa E-mail: mpho.mashatola@drdgold.com Attention: Mpho Mashatola 2017/449061/07
105 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 2 - Conditions Precedent PART I Conditions Precedent to Initial Utilisation 1. Original Obligors 1.1. A copy of the constitutional documents of each Original Obligor. 1.2. A copy of a resolution of the board of directors of each Original Obligor: 1.2.1. approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party; 1.2.2. authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and 1.2.3. authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party. 1.3. A specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above. 1.4. To the extent required by the Companies Act 2008 or other applicable law, and with reference to the constitutional documents of an Obligor, a copy of a resolution duly passed by the holders of the issued shares of that Obligor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Obligor is a party. 1.5. A certificate of the Borrower and each other Original Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Commitment would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded. 1.6. A certified copy of the register of members/shareholders of each Original Obligor. 1.7. A certificate of an authorised signatory of the Borrower and each other Original Obligor certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the Signature Date. 2. Finance Documents 2.1. This Agreement duly executed by the members of the Group expressed to be a party to this Agreement. 2.2. The Overdraft Facility Letter, duly executed by the parties thereto. 2.3. A Fee Letter in relation to the upfront fee payable under Clause 11.2, duly executed by the parties thereto. 3. Legal opinions A legal opinion of Edward Nathan Sonnenbergs Inc. (t/a ENS), legal advisers to the Obligors in South Africa, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
106 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 4. Other documents and evidence 4.1. A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document. 4.2. The Original Financial Statements of each Original Obligor. 4.3. The Group Structure Chart. 4.4. Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 (Fees) and Clause 16 (Costs and expenses) have been paid or will be paid by the first Utilisation Date. 4.5. Such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any other Finance Party) in order for the Agent and each other Finance Party to carry out and be satisfied it has complied with all necessary "know your customer" or similar identification procedures under applicable laws and regulations (including the Financial Intelligence Centre Act, 2001) pursuant to the transactions contemplated in the Finance Documents.
107 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 PART II Conditions Precedent to be delivered by an Additional Guarantor 1. An Accession Letter, duly executed by the Additional Guarantor and the Borrower. 2. A copy of the constitutional documents of the Additional Guarantor. 3. A copy of a resolution of the board of directors of the Additional Guarantor: 3.1. approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter; 3.2. authorising a specified person or persons to execute the Accession Letter on its behalf; and 3.3. authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents. 4. A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above. 5. [To the extent required by the Companies Act 2008 or other applicable law, with reference to the constitutional documents of an Additional Guarantor, a copy of a resolution duly passed by the holders of the issued shares of that Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Additional Guarantor is a party.] 6. A certificate of the Additional Guarantor (signed by a director) confirming that guaranteeing the Commitment would not cause any guaranteeing or similar limit binding on it to be exceeded. 7. A certificate of an authorised signatory of the Additional Guarantor that each copy document listed in this Part II (Conditions Precedent to be delivered by an Additional Guarantor) of Schedule 2 (Conditions precedent) is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter. 8. A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document. 9. If available, the latest audited financial statements of the Additional Guarantor. 10. A legal opinion of the legal advisers to the Agent in South Africa. 11. A legal opinion of the legal advisers to the Obligors in South Africa. 12. If the Additional Guarantor is incorporated in a jurisdiction other than South Africa, a legal opinion of the legal advisers to the Agent in the jurisdiction in which the Additional Guarantor is incorporated.
108 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 3 - Utilisation Request From: DRDGOLD Limited, as Borrower and Obligors' Agent (the "Borrower") To: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated [] with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request. 2. We wish to borrow a Loan on the following terms: Proposed Utilisation Date: [] (or, if that is not a Business Day, the next Business Day) Amount: ZAR[] or, if less, the Available Facility Interest Period: [] 3. We confirm that each condition specified in Clause 4.2 (Further conditions precedent) of the Agreement is satisfied on the date of this Utilisation Request. 4. The proceeds of this Loan should, as to: 4.1. [an amount of ZAR[] be applied in direct settlement of the fees payable to each Finance Party under Clause 11.2 ( Upfront fee);]1 4.2. the balance, be credited to [insert Borrower account details]. 5. Subject to Clause 10.5 (Utilisation Requests) of the Agreement, this Utilisation Request is irrevocable. Yours faithfully ………………………………… authorised signatory for DRDGOLD Limited 1 Only include in first Utilsiation Request.
109 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 4 - Form of Accession Letter From: [Acceding Guarantor] (the "Acceding Guarantor") and DRDGOLD Limited, as Borrower and Obligors' Agent (the "Borrower") To: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated []with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter. 2. [Acceding Guarantor ] agrees to become an Additional Guarantor and to be bound by the terms of the Agreement as an Additional Guarantor pursuant to Clause 23.2 (Additional Guarantors) of the Agreement. [Acceding Guarantor ] is a company duly incorporated under the laws of [name of relevant jurisdiction]. 3. [Acceding Guarantor's] administrative details are as follows: Address: Email: Attention: 4. This Accession Letter and any non-contractual obligations arising out of or in connection with it are governed by South African law. DRDGOLD Limited [Acceding Guarantor] By: By:
110 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 5 - Form of Resignation Letter To: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") From: [Resigning Guarantor] and DRDGOLD Limited, as Borrower and Obligors' Agent (the "Borrower") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated []with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter. 2. Pursuant to [Clause 23.4 (Resignation of a Guarantor)] of the Agreement, we request that [resigning Guarantor] be released from its obligations as a Guarantor under the Agreement. 3. We confirm that no Default is continuing or would result from the acceptance of this request. 4. This Resignation Letter and any non-contractual obligations arising out of or in connection with it are governed by South African law . Signed for: …........................................................... …..................................................... DRDGOLD Limited [Subsidiary] Name: Name: Capacity: Capacity:
111 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 6 - Form of Compliance Certificate To: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") From: DRDGOLD Limited, as Borrower and Obligors' Agent (the "Borrower") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated [] with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate. 2. This Compliance Certificate is delivered in relation to the Measurement Period ended [] (the "Measurement Date") 3. We confirm that, as at the Measurement Date, the following Financial Covenants referred to in Clause 20.2 (Financial condition) of Clause 20 (Financial Covenants) of the Agreement were: Ratio description As calculated Required Compliance Y/N 3.1. Interest Cover Ratio > 4.00 times 3.2. Leverage Ratio < 2.00 times 4. We confirm that the, on the basis of the calculations annexed hereto as Annexure A, each Financial Covenants in Clause 20.2 (Financial condition) of Clause 20 (Financial Covenants) of the Agreement has been complied with.2 5. We further confirm that, as at the Measurement Date, the following Subsidiaries are Material Companies and we are in compliance with Clause 21.16 (Guarantor Coverage). 6. [We confirm that no Default is continuing.]3 Signed for: …........................................... …............................................ DRDGOLD Limited Name: Capacity: Director DRDGOLD Limited Name: Capacity: Director 2 If this statement cannot be made, the Compliance Certificate should identify any non compliance with any Financial Covenants and the steps, if any, being taken to remedy such non-compliance. 3 Note: If this statement cannot be made, the Compliance Certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it
112 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 7 - Accordion Increase Documents PART I - Form of Accordion Increase Request To: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") From: DRDGOLD Limited, as Borrower and Obligors' Agent (the "Borrower") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated [] with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Agreement. This is an Accordion Increase Request. Terms defined in the Agreement have the same meaning in this Accordion Increase Request unless given a different meaning in this Accordion Increase Request. 2. We refer to Clause 2.2 (Accordion increase option) of the Agreement. 3. The Borrower hereby requests an Increased Commitment in an amount of ZAR[] ([] Rand). 4. The Borrower confirms that the Increased Commitment, if confirmed by the Agent, will not result in the aggregate Increased Commitments confirmed under Clause 2.2 (Accordion increase option) of the Agreement exceeding the Aggregate Accordion Increase Amount. 5. The proposed date on which the Increased Commitment is to take effect is [] or such later date as the Agent may stipulate in an Accordion Increase Confirmation (the "Accordion Increase Effective Date"). 6. This Accordion Increase Request and any non-contractual obligations arising out of or in connection with it are governed by South African law . 7. This Accordion Increase Request has been entered into on the date stated at the beginning of this Increase Confirmation. Yours sincerely, Signed for: …................................................................. …............................................................... DRDGOLD Limited Name: Capacity: DRDGOLD Limited Name: Capacity:
113 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 PART II - Form of Accordion Increase Confirmation To: DRDGOLD Limited, as Borrower and Obligors' Agent (the "Borrower") From: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated [] with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Agreement. This is an Accordion Increase Confirmation. Terms defined in the Agreement have the same meaning in this Accordion Increase Confirmation unless given a different meaning in this Accordion Increase Confirmation. 2. We refer to Clause 2.2 (Accordion increase option) of the Agreement and to the Accordion Increase Request received from the Borrower on [] (the "Accordion Increase Request"). 3. The Lender: 3.1. confirms that it has obtained all internal approvals required in relation to the Accordion Increase Request; and 3.2. agrees to assume and will assume all of the obligations corresponding to the Commitment in an amount of ZAR[] ([] Rand) (the "Increased Commitment") as if it had been the Lender in respect thereof under the Agreement from the Signature Date. 4. The proposed date on which the Increased Commitment is to take effect is [the date of this Accordion Increase Confirmation / [increase later date, if applicable] (the "Accordion Increase Effective Date"). 5. This Increase Confirmation and any non-contractual obligations arising out of or in connection with it are governed by South African law . 6. This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation. Yours sincerely, Signed for: ….............................................................. …........................................................... Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) Name: Capacity: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) Name: Capacity:
114 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 8 - Form of Transfer Certificate To: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") From: [details of new Lender] (the "New Lender") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated [] with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate. 2. We refer to Clause 24.4 (Procedure for Transfer) of the Agreement. 2.1. The New Lender agrees to the Existing Lender transferring to the New Lender by cession and delegation all or part of the Existing Lender's Commitment, rights and obligations under the Agreement and other Finance Documents which relation to that that portion of the Existing Lender's Commitment and participations in Loans under the Agreement referred to in this Schedule in accordance with Clause 24.4 (Procedure for transfer). 2.2. The proposed Transfer Date is []. 3. The address of the New Lender and attention details for notices of the New Lender for the purposes of Clause 30.2 (Addresses) are set out in the Schedule. 4. On and with effect from the Transfer Date the New Lender: 4.1. becomes party to the Agreement as a Lender; 4.2. undertakes to perform all the obligations expressed in the Agreement and other applicable Finance Documents to be assumed by a Lender; and 4.3. agrees that it shall be bound by all the provisions of the Agreement and other applicable Finance Documents as if it had been an original party to those Finance Documents as a Lender. 5. The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 24.3 (Limitation of responsibility of Existing Lender). 6. The New Lender agrees that it shall assume the same obligations towards each other Finance Party under the Finance Documents as if it had been an Original Lender. 7. This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by South African law. 8. This Transfer Certificate has been entered into on the date stated at the beginning of this Increase Confirmation. 9. By counter-signing this Transfer Certificate, it is accepted by the Agent and the Transfer Date is confirmed as [].
115 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Yours sincerely, Signed for: …................................................................. …............................................................... DRDGOLD Limited Name: Capacity: [details of new Lender] Name: Capacity: Signed for: …................................................................. Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (as Agent Name: Capacity:
116 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 THE SCHEDULE Commitment/rights and obligations to be transferred [insert relevant details, including applicable Commitment (or part) and participation in Loan] Part 1 Commitment [●] Part 2 Participations In Loan [●] Part 3 Administrative Details of the New Lender [Insert details of address for notices and payment details, etc.]
117 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 9 - Permitted Transferees South African Banks Absa Bank Limited The Standard Bank of South Africa Limited Investec Bank Limited FirstRand Limited Nedbank Group Limited Non South African Banks Barclays plc Citibank, N.A. HSBC Bank plc Standard Chartered plc Affiliates Any affiliate, subsidiary or holding company of the banks and financial institutions listed in this Schedule 9, and any fund or entity managed by any of them or any of their affiliates
118 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Schedule 10 - Sustainability Schedule Part I - Sustainability Definitions 1. "Applicable ESG Standards" refer to the following: 1.1. in relation to KPI [1], the standards published by [●]; 1.2. in relation to KPI [2], the standards published by [●]; and 1.3. in relation to KPI [3], the standards published by [●]; and 2. "Sustainability Margin Adjustment" means, in relation to any SLL Reference Period, the adjustment to the Margin, if any, determined using the table below and the number of SPTs that the Sustainability Compliance Certificate for that SLL Reference Period certifies have been met in accordance with sub- clause 8.5.2 of Clause 8.5 (Sustainability Margin Adjustment): Number of SPTs met Revised Margin following Sustainability Margin Adjustment 3 The rate which is []% ([] percent). per annum lower than the rate which would otherwise have been applicable. 2 The rate which is []% ([] percent). per annum lower than the rate which would otherwise have been applicable. 1 The rate which is []% ([] percent). per annum lower than the rate which would otherwise have been applicable. 0 The rate which would otherwise have been applicable.
119 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Part II - Sustainability Calculations 1. KPI [1] [Description of KPI] 1.1. Applicable ESG Standards (if applicable) [] 1.2. Calculation Methodology []] 1.3. Baseline [] 1.4. SPTs SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SPTs [] [] [] [] [] 2. KPI [2] [Description of KPI] 2.1. Applicable ESG Standards (if applicable) [] 2.2. Calculation Methodology [] 2.3. Baseline [] 2.4. SPTs SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SPTs [] [] [] [] []
120 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 3. KPI [3] [Description of KPI] 3.1. Applicable ESG Standards (if applicable) [] 3.2. Calculation Methodology [] 3.3. Baseline [] 3.4. SPTs SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SLL Reference Period ending [] SPTs [] [] [] [] []
121 <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 Part III - -Form of Sustainability Compliance Certificate To: Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (the "Agent") From: DRDGOLD Limited (the "Borrower") Dated: [] Dear Sirs, DRDGOLD Limited – ZAR1,000,000,000 Revolving Credit Facility Agreement dated [] with ZAR500,000,000 Accordion (the "Agreement") 1. We refer to the Facility Agreement. This is a Sustainability Compliance Certificate. Terms defined in the Facility Agreement have the same meaning when used in this Sustainability Compliance Certificate unless given a different meaning in this Sustainability Compliance Certificate. 2. This Sustainability Compliance Certificate is delivered with respect to the SLL Reference Period ending [] (the "Relevant SLL Reference Period"). 3. We confirm that the results (in accordance with the applicable Calculation Methodology) for the SPT for each KPI for the Relevant SLL Reference Period as verified in [the]/[each] applicable Verification Report are as follows: KPI SPT Performance SPT met? KPI [1] [Yes]/[No] KPI [2] [Yes]/[No] KPI [3] [Yes]/[No] 4. As shown above, [] SPTs were met and [] were not met. Accordingly: 4.1 [the applicable Sustainability Margin Adjustment is an [increase]/[decrease] to the Margin of [] percent. per annum]/[there is no Sustainability Margin Adjustment]; 4.2 the Margin applicable to the Facility following the Sustainability Margin Adjustment is [] percent. per annum. [Set out relevant calculations in reasonable detail] 5. We confirm that the Sustainability Report and the Verification Report relating to the Relevant SLL Reference Period and attached hereto is a correct and complete copy of the original and has not been amended or superseded as at the date of this Sustainability Compliance Certificate. Yours sincerely, Signed for: …........................................... …............................................ DRDGOLD Limited (as Borrower) Name: Capacity: Director DRDGOLD Limited (as Borrower) Name: Capacity: Director
i <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 SIGNATURE PAGE (1/5) BORROWER For" DRDGOLD LIMITED Signature: /s/ Adriaan Jacobus Davel who warrants that he / she is duly authorised thereto Name: Adriaan Jacobus Davel Capacity: Director Date: July 31, 2024
ii <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 SIGNATURE PAGE (2/5) GUARANTOR For" ERGO MINING PROPRIETARY LIMITED Signature: /s/ Henry Gouws who warrants that he / she is duly authorised thereto Name: Henry Gouws Capacity: Director Date: July 31, 2024
iii <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 SIGNATURE PAGE (3/5) GUARANTOR For" FAR WEST GOLD RECOVERIES PROPRIETARY LIMITED Signature: /s/ Henriette Hooijer who warrants that he / she is duly authorised thereto Name: Henriette Hooijer Capacity: Director Date: July 31, 2024
iv <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 SIGNATURE PAGE (4/5) AGENT For: NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CORPORATE AND INVESTMENT BANKING DIVISION) NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CORPORATE AND INVESTMENT BANKING DIVISION) Signature: /s/ GL Webber /s/ NJ Singh who warrants that he / she is duly authorised thereto who warrants that he / she is duly authorised thereto Name: GL Webber NJ Singh Capacity: Authorised Signatory Authorised Signatory Date: July 31, 2024 July 31, 2024
v <ENS>#0537844 CP2.1 Facility Agreement - Nedbank – DRDGOLD EXT3 SIGNATURE PAGE (5/5) ORIGINAL LENDER For: NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CORPORATE AND INVESTMENT BANKING DIVISION) NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CORPORATE AND INVESTMENT BANKING DIVISION) Signature: /s/ GL Webber /s/ NJ Singh who warrants that he / she is duly authorised thereto who warrants that he / she is duly authorised thereto Name: GL Webber NJ Singh Capacity: Authorised Signatory Authorised Signatory Date: July 31, 2024 July 31, 2024
EX-8.1
7
exhibit81.htm
EX-8.1
Document
LIST OF MAIN SUBSIDIARIES AS AT JUNE 30, 2024
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| SUBSIDIARY NAME |
JURISDICTION OF INCORPORATION AND RESIDENCE |
PROPORTION OF OWNERSHIP INTEREST AND VOTING INTEREST |
| Ergo Mining Operations Proprietary Limited |
South Africa |
100 |
% |
| Crown Gold Recoveries Proprietary Limited |
South Africa |
100 |
% |
| East Rand Proprietary Mines Limited |
South Africa |
100 |
% |
| Ergo Mining Proprietary Limited |
South Africa |
100 |
% |
| Far West Gold Recoveries Proprietary Limited |
South Africa |
100 |
% |
| Stellar energy solutions Proprietary Limited |
South Africa |
50.25 |
% |
EX-11.1
8
exhibit111.htm
EX-11.1
Document
Exhibit 11.1
DIRECTORS’ & EMPLOYEES' DEALING POLICY AND PROCEDURES
1.INTRODUCTION
1.1.The JSE Limited’s (“JSE”) Listings Requirements, read with the Securities Services Act, 36 of 2004 (“SSA”) and the DRDGOLD Code of Ethics regulate dealings in securities for directors and employees of DRDGOLD Limited and its subsidiaries (“DRDGOLD” or “the Company”).
1.2.The JSE Listings Requirements are binding on directors and the company secretary of the listed company and of any major subsidiaries (defined in the JSE Listings Requirements as being a subsidiary that represents 25% or more of total assets or revenue of the consolidated group based on the latest published interim or year-end financial results) while the insider trading provisions under the SSA apply to all holders of unpublished, material price sensitive information.
1.3.The DRDGOLD Board views any breach of this policy in a serious light. All employees and directors must observe the laws and rules referred to under 1.1 above. A breach in the policy could result in a censure or fine being imposed on the directors or the Company by the JSE. If directors or employees do not-comply with the insider trading provisions of the SSA, they could be guilty of an offence.
2.PURPOSE
2.1.To reduce the risk of employees, particularly the directors and the company secretary contravening the laws which prohibit insider trading.
2.2.To promote the Company’s reporting obligations and prevent any individuals from unfairly deriving benefit by selling or buying shares to the disadvantage of the general body of shareholders
2.3.To give guidance to the directors and employees on their duty to comply with the relevant laws when trading in DRDGOLD securities, however every employee who deals in DRDGOLD securities must familiarise himself or herself with all the applicable legal provisions.
3.ESSENTIAL DEFINITIONS
DIRECTORS’ DEALING POLICY AND PROCEDURE
3.1.The following summarised terms are extracted from legislative provisions and the JSE Listings Requirements so that the context of this policy can be clarified.
(1)"Associate” means:
(1)a director’s spouse and children below the age of 18 years; and/or
(2)the trustees of any trust of which a director and/or his or her family are beneficiaries; and/or
(3)a trust of which a director and/or his or her family control 35% of its votes; and/or
(4)a close corporation or a company in which a director and/or his or her family control at least 35% of the voting rights at general and board meetings, or which has the right to appoint/remove 35% of directors.
(2)“Closed period” means the date from the end of a reporting period to the date of the earliest publication of results in respect of that reporting period (12-month period, 6-month period or quarterly reporting period) and any period when the securities of DRDGOLD are traded under a cautionary announcement.
(3)“Company Secretary” means the Company Secretary of DRDGOLD Limited.
(4)"Designated Director” means either the Chairman of the Board or the Chairman of the Audit Committee or the Chairman of the Remuneration Committee who are entitled to give clearance required in terms of paragraph 3.66 of the JSE Listings Requirements.
(5)“Director” means a director of DRDGOLD including its Company Secretary directors and company secretaries of DRDGOLD’s major subsidiaries as defined in the JSE Listings Requirements.
(6)“Price sensitive information” means unpublished information that, if it were made public, would be reasonably likely to have an effect on the price of DRDGOLD’s securities.
(7)“Prohibited period” means a closed period and any period when there exists any matter which constitutes unpublished price sensitive information in relation to DRDGOLD securities (whether or not the director has knowledge of such matter).
(8)“Securities“means DRDGOLD securities which include shares, stocks, debentures, specialist securities, notes, units of stock issued in place of shares, options on stocks, shares, debentures, notes or units and rights thereto, options on indices of information as issued by a stock exchange on prices of any of the aforementioned instruments, as well as any other instruments declared by the Registrar of Stock Exchanges by notice in the JSE Gazette.
DIRECTORS’ DEALING POLICY AND PROCEDURE
(9) “Transaction” includes,
(10)any sale, purchase or subscription (including a rights offer, capitalisation award or scrip dividend) of securities relating to the Issuer;
(ii) any agreement to sell, purchase or subscribe for securities relating to the issuer (irrespective of whether shares or cash flows);
(iii) any donations of securities relating to the Issuer;
(4)any dealings in warrants, single stock futures, contracts for difference or any other derivatives issued in respect of the Issuer’s securities. It should be noted that, if shares are sold and the equivalent exposure is purchased through a single stock future or any other derivative, both legs will be deemed to be transactions. The closing out of a single stock future or other derivative is also a transaction. The rolling-over of a single stock future that is merely the extension of an existing position is not a transaction;
(5)the acceptance, acquisition, disposal or exercise of any option (including but not limited to options in terms of a share incentive/option scheme) to acquire or dispose of securities;
(6)any purchase or sale of nil or fully paid letters;
(7)the acceptance, acquisition or disposal of any right or obligation, present or future, conditional or unconditional, to acquire or dispose of securities; or
(8)any other transaction that will provide direct or indirect exposure to the share (price of the Issuer. It must be noted that this does not include cash settled share appreciation rights granted to directors by the Issuer in the ordinary course of business.
3.2 The list of definitions set out under 3.1 (a) to (i) above is not exhaustive, directors and employees are required to gather sufficient information before engaging in any transaction or dealing in DRDGOLD securities.
4.DEALING IN SECURITIES
4.1.Directors and employees must not deal or enter into a transaction when they hold unpublished price sensitive information. They are also prohibited from communicating insider trading information to other persons who might use it to deal in DRDGOLD securities as they would be guilty of an offence in terms of the insider trading provisions of the SSA.
4.2.Directors and employees must not deal or enter into a transaction during a closed period or a prohibited period.
DIRECTORS’ DEALING POLICY AND PROCEDURE
4.3.A director must not deal in DRDGOLD securities without following the procedure outlined under paragraph 5 below.
4.4.A designated director defined under paragraph 3 above shall not grant clearance to deal in a closed or prohibited period even if the applicant director is not aware of the existence of price sensitive information.
4.5.A director must advise his/her associates and investment manager dealing on his/her behalf in writing of the names of the issuer(s) of which he/she is a director
4.6.Directors must advise their associates in writing that they must notify him or her immediately after entering into a transaction.
4.7.Directors must advise their investment managers in writing that they may not deal in securities unless they obtain his or her express consent in writing.
5.PROCEDURE FOR DIRECTORS DEALING IN SECURITIES.
Any director who intends to enter into a transaction or deal in securities must complete FORM DL 01 and send it to the office of the Company Secretary.
5.1.The office of the Company Secretary shall simultaneously transmit FORM DL 01 received from the applicant director to either the Chief Executive Officer (“CEO”) or the Chief Financial Officer (“the CFO”) so that they consider whether or not the company holds any price sensitive information at that stage. At the same time the Company Secretary’s office will also refer the application to DRDGOLD’s sponsor appointed in terms of the JSE Listings Requirements for comment and guidance.
5.2.If the CEO or the CFO are each satisfied that there is no price sensitive information in relation to DRDGOLD’s securities and there is no reason to refuse the applicant director's application for clearance to deal, the CEO or the CFO will sign off FORM DL 01 approving the application to deal.
5.3.Once the application has been granted by the CEO or CFO, he or she will return it to the Company Secretary for further attention.
5.4.The CEO or CFO must refuse the application contained in FORM DL 01 if DRDGOLD is in a closed period or he or she is aware of any price sensitive information even if the applicant director has no knowledge of such information.
5.5 In the event that the CEO or CFO intend to trade DRDGOLD securities their application will be considered by either the Chairman of the Board or the Audit Committee or the Remuneration Committee.
DIRECTORS’ DEALING POLICY AND PROCEDURE
5.5.A director must immediately disclose particulars of his or her dealing, failing which by no later than 24 hours after dealing in securities. The particulars referred to in this paragraph shall be contained in FORM DL 02 and must be sent to the office of the company secretary within 24 hours after dealing in DRDGOLD securities.
6.CONCLUSION
Each director and each employee has an individual responsibility to obtain all necessary information which will assist him or her to comply with the laws relating to insider trading and the JSE Listings Requirements.
FORM DL 01
DEALING IN SECURITIES BY DIRECTORS
APPLICATION FOR PERMISSION TO DEAL
(To be completed by Applicant Director)
I wish to apply for permission to deal in company shares.
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Name: |
Number of Shares: |
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Type of Transaction: (Please Tick)
Purchase Sale Option Exercise
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I have a direct/indirect interest in the transaction. (Please delete as applicable)
I declare that I am not in the possession of any price sensitive information.
I undertake to inform the Company Secretary as soon as possible once the transaction is completed, but no later than 24 hours afterwards.
DIRECTORS’ DEALING POLICY AND PROCEDURE
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| Applicant: |
Date |
Recommended/Not Recommended:
Chief Executive Officer |
Date
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Recommended/ Not Recommended:
Chief Financial Officer |
Date |
Approved/ Not Approved:
Chairman of the Board |
Date |
Approved/ Not Approved:
Chairman of the Audit Committee |
Date |
Approved/ Not Approved:
Chairman of Remuneration Committee |
Date |
| Received by Company Secretary: |
Date |
I understand that this permission is only valid for 30 days. If the above transaction has not been completed within this period then a re-application will be made.
SIGNATURES:
Please return this completed and signed form to The Company Secretary,
Quadrum Office Park, Building 1,50 Constantia Boulevard, Constantia Kloof ext.28,Roodepoort,1709
Fax: (011) 470 2626 or emails: themba.gwebu@za.drdgold.com & leonie.marupen@za.drdgold.com
FORM DL 02
(Listings Requirement 3.63 (b)
INFORMATION TO BE PROVIDED TO THE LISTING DIVISION
The following information is required:
The name of the company of which he/she is a director.
Date on which the transaction was effected.
DIRECTORS’ DEALING POLICY AND PROCEDURE
The price, number, total value and class of securities concerned.
In the case of options or any other similar right or obligation, the option strike price, strike dates and periods of exercise and /or vesting.
The nature of the transaction.
The nature and extent of the director’s interest in the transaction (e.g. direct beneficial/indirect
beneficial).
Confirmation as to whether the trades were done on-market or off-market.
Confirmation that clearance has been given (not required for dealings by associates).
EX-12.1
9
exhibit121.htm
EX-12.1
Document
Exhibit 12.1
CERTIFICATION
I, Daniel Johannes Pretorius, certify that:
1) I have reviewed this Annual Report on Form 20-F of DRDGOLD Limited.
2) Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report.
3) Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Annual Report.
4) The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
d) Disclosed in this Annual Report any change in the Company's internal control over financial reporting that occurred during the period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
5) The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
Date: October 30, 2024
/s/ Daniel Johannes Pretorius
Daniel Johannes Pretorius
Chief Executive Officer
EX-12.2
10
exhibit122.htm
EX-12.2
Document
Exhibit 12.2
CERTIFICATION
I, Adriaan Jacobus Davel, certify that:
1) I have reviewed this Annual Report on Form 20-F of DRDGOLD Limited.
2) Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report.
3) Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Annual Report.
4) The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
d) Disclosed in this Annual Report any change in the Company's internal control over financial reporting that occurred during the period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
5) The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
Date: October 30, 2024
/s/ Adriaan Jacobus Davel
Adriaan Jacobus Davel
Chief Financial Officer
EX-13.1
11
exhibit131.htm
EX-13.1
Document
Exhibit 13.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 20-F of DRDGOLD Limited (the "Company") for the fiscal year ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Daniel Johannes Pretorius, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 2002, that, to the best of his knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Daniel Johannes Pretorius
By: Daniel Johannes Pretorius
Title: Chief Executive Officer
Date: October 30, 2024
EX-13.2
12
exhibit132.htm
EX-13.2
Document
Exhibit 13.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 20-F of DRDGOLD Limited (the "Company") for the fiscal year ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Adriaan Jacobus Davel, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 2002, that, to the best of his knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Adriaan Jacobus Davel
By: Adriaan Jacobus Davel
Title: Chief Financial Officer
Date: October 30, 2024
EX-97.1
13
exhibit971.htm
EX-97.1
Document
NYSE EXECUTIVE REMUNERATION COMPENSATION CLAWBACK POLICY
1.PURPOSE
a.The purpose of this policy (this “NYSE Clawback Policy”) is to set out the basis for the mandatory recovery of erroneously awarded Incentive-Based Compensation (as defined below) from Executives (as defined below) of DRDGOLD LIMITED (the “Company”, together with its subsidiaries, the “Group”) in the event of a Restatement (as defined below).
b.The remuneration committee (the “Remuneration Committee”) of the board of directors of the Company (the “Board”) has adopted this NYSE Clawback Policy in accordance with the requirements of Section 303A.14 of the New York Stock Exchange (“NYSE”) Listed Company Manual, which was mandated by Rule 10D-1 of the Securities Exchange Act of 1934 (the “Exchange Act”).
c.This NYSE Clawback Policy may be amended from time to time by the Remuneration Committee pursuant to any laws, regulations or rules of the US Securities and Exchange Commission, the NYSE, any other stock exchange on which the Company’s securities are listed or other regulatory authority applicable to the Group or the Executive (“Applicable Law”). Applicable Law includes Section 304 of the US Sarbanes-Oxley Act of 2002. Executives will be notified of any significant amendments to this NYSE Clawback Policy and how such amendments may impact their remuneration.
2.APPLICABILITY
a.This NYSE Clawback Policy applies to the Company’s current and former executive directors or members of senior management of the Company (or its equivalent from time to time), as well as any other person(s) (if any) as the Company may determine also constitute “executive officers” as defined in Section 303A.14(e) of the NYSE Listing Company Manual (each an “Executive”). Executives of the Company’s parent(s) or subsidiaries are deemed to be Executives of the Company if they perform such policy making functions for the Company. Individuals will be notified as soon as practicable after becoming or being determined to be an Executive.
b.Remuneration shall be subject to recovery pursuant to this NYSE Clawback Policy where: (i) the Remuneration Committee determines that such remuneration constitutes Incentive-Based Compensation; and (ii) the remuneration was Received (as defined below) by an Executive:
i.after beginning their services as an Executive;
ii.who served as an Executive at any time during the performance period for that Incentive-Based Compensation;
iii.while the Company has a class of securities listed on the NYSE, another national securities exchange, or a national securities association in the United States; and
iv.during the Recovery Period (as defined below); provided that this NYSE Clawback Policy shall only apply to remuneration Received on or after 2 October 2023 (the “Effective Date”).
c.For the avoidance of doubt, this NYSE Clawback Policy continues to apply to an Executive following any termination of their office or employment.
d.This NYSE Clawback Policy will be notified to Executives through any means determined by the Remuneration Committee.
3.RECOVERY OF ERRONEOUSLY AWARDED INCENTIVE-BASED COMPENSATION
a.In the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under Applicable Law (a “Restatement”), including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Remuneration Committee shall recover the amount of Incentive-Based Compensation Received by an Executive in the Recovery Period that exceeds the amount of Incentive-Based Compensation that otherwise would have been Received by the Executive had such remuneration been determined based on the restated amounts, computed without regard to any taxes/duties/contributions/levies (“Taxes”) paid or payable (“Recoverable Amount”). The Recoverable Amount shall not exceed the differential between the amount of Incentive-Based Compensation paid to such Executive in connection with the Restatement and the amount of Incentive-Based Compensation that would have been paid to such Executive had the Restatement not occurred (in each case without regard to any Taxes paid or payable). Where Incentive-Based Compensation is based only in part on the achievement of a Financial Reporting Measure performance goal, the Remuneration Committee shall first determine the portion of the original Incentive-Based Compensation based on or derived from the Financial Reporting Measure that was restated. The Remuneration Committee shall then recalculate the affected portion based on the Financial Reporting Measure as restated, and recover the difference between the greater amount based on the original financial statements and the lesser amount that would have been received based on the restatement.
b.Whether a Restatement has occurred for the purposes of this NYSE Clawback Policy shall be confirmed by the Remuneration Committee, which shall rely on any decision in this respect of the audit committee of the Company (the “Audit Committee”).
c.The Recovery Period shall mean the period of three full financial years of the Company preceding the Restatement Date (as defined below) and any transition period that results from a change in the Company’s financial year within or immediately following such period.
d.For Incentive-Based Compensation based on share price or total shareholder return, where the Recoverable Amount is not subject to mathematical recalculation directly from the information in the Restatement, the Recoverable Amount will be determined by the
Remuneration Committee based on the Remuneration Committee’s reasonable estimate of
the effect of the Restatement on the share price or total shareholder return upon which the Incentive-Based Compensation was received. The Company must maintain documentation of the determination of that reasonable estimate and provide such documentation to the NYSE.
e.Following a Restatement, the Remuneration Committee shall:
i.determine the Recoverable Amount in accordance with Section 3.1 of this NYSE Clawback Policy; and
ii.to the extent the Recoverable Amount has been Received by an Executive, instruct the Company to recover reasonably promptly the full Recoverable Amount in accordance with Section 3.6 of this NYSE Clawback Policy; or
iii.to the extent the Recoverable Amount has not been Received, but is otherwise owed to an Executive, cancel the right of such Executive to receive the Recoverable Amount.
f.To the extent permitted by Applicable Law, the Remuneration Committee may seek to recoup Recoverable Amounts by all legal means available, including but not limited to, by requiring any affected Executive to repay such amount to the Company, by set-off, by reducing future remuneration of such affected Executive, or by such other means or combination of means as the Remuneration Committee, in its sole discretion, determines to be appropriate.
g.Recoupment of the Recoverable Amount under this NYSE Clawback Policy will be initiated by the Company as soon as practicable following the written request of the Remuneration Committee.
h.All amounts recoverable pursuant to this NYSE Clawback Policy shall be payable by the Executive to the Company (or as the Company directs) and shall be payable immediately on demand.
i.For purposes of this NYSE Clawback Policy:
i.“Incentive-Based Compensation” means any remuneration that is granted, earned, or vested/released based wholly or in part upon the attainment of a Financial Reporting Measure (as defined below). Incentive-Based Compensation is based in part upon the attainment of a Financial Reporting Measure if such compensation is subject to multiple conditions one or more, but not all, of which are Financial Reporting Measures.
1.Incentive-Based Compensation includes remuneration Received under the DRDGOLD Deferred Share Plan 2024 or any other variable remuneration structures operated by the Group from time to time under which awards are wholly or in part based upon the attainment of a Financial Reporting Measure.
ii.“Financial Reporting Measure” means any measure that is determined and presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) (or any other accounting principles used to prepare the Group’s financial statements from time to
time), and any measure derived wholly or in part from such measure, including non-IFRS financial measures (as well as other measures, metrics and ratios that are non-IFRS measures). The term Financial Reporting Measure includes stock price and total shareholder return. Financial Reporting Measures may be presented outside the Company’s financial statements.
iii.“Received”: Incentive-Based Compensation is deemed Received in the Company’s financial period during which the Financial Reporting Measure specified in the Incentive-Based Compensation award is attained, even if the payment or grant occurs after the end of the financial period in which the Financial Reporting Measure is attained. For the avoidance of doubt, an Executive receives the Incentive-Based Compensation even when the Executive has established only a contingent right to payment at that time. Ministerial acts or other conditions necessary to effect issuance or payment, such as calculating the amount earned or obtaining Remuneration Committee approval of payment do not affect the determination of the date Received. In the case of awards subject to multiple conditions, not all conditions must be satisfied for the Incentive-Based Compensation to be deemed Received. The Remuneration Committee shall have the discretion to determine when the Incentive-Based Compensation was Received, and such determination need not be uniform across the type of Incentive-Based Compensation or for all Executives.
iv.“Restatement Date” means the date on which the Company is required to prepare a Restatement, which is the earlier to occur of: (i) the date on which the Board, or the Audit Committee concludes, or reasonably should have concluded, that the Company is required to prepare a Restatement; or (ii) the date a court, regulator or other legal authorised body directs the Company to prepare a Restatement.
4.IMPRACTICABILITY EXCEPTION TO RECOVERY OBLIGATION
a.The Company must recover the Recoverable Amount in compliance with this NYSE Clawback Policy except to the extent that the conditions set out in 4.2.1, 4.2.2 or 4.2.3 of this NYSE Clawback Policy are met and the Remuneration Committee determines, in its sole discretion, that recovery would be impracticable.
b.The Remuneration Committee may determine that a recovery is impracticable only if:
i.following a reasonable attempt to recover the Recoverable Amount, the Remuneration Committee determines, in its sole discretion, that the direct expense that would need to be paid to a third party to assist in enforcing this NYSE Clawback Policy would exceed the Recoverable Amount. The Company must document such reasonable attempt(s) to recover and provide that documentation to the NYSE;
ii.recovery would violate a law of the Republic of South Africa, where such law was adopted prior to November 28, 2022. Before concluding that it would be impracticable to recover any Recoverable Amount based on a violation of the law of the Republic of South Africa, the Company must obtain an opinion of South African
counsel, acceptable to the NYSE that recovery would result in such a violation and provide such opinion to the NYSE; or
iii.if applicable, the Remuneration Committee determines that recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.
c.In determining whether a recovery would be impracticable due to costs in accordance with 4.2.1 above, the only criteria that the Remuneration Committee may consider is whether the direct costs, such as reasonable legal expense and consulting fees, amongst others, paid to a third party to assist in enforcing recovery would exceed the Recoverable Amount. Indirect costs, such as reputational concerns or the effect on hiring of new Executives, amongst others, may not be considered when determining whether recovery is impracticable.
5.INDEMNIFICATION AND INSURANCE
a.The Group is prohibited from insuring or indemnifying any Executive against the loss of erroneously awarded remuneration as set forth in this NYSE Clawback Policy. If an Executive purchases a third-party insurance policy to fund potential recovery obligations, the Company is prohibited from paying or reimbursing the Executive for premiums for such an insurance policy.
6.OTHER RECOVERY RIGHTS
a.Any right of recovery under this NYSE Clawback Policy applies in addition to (and without limiting) any other remedies and/or rights to reduce, cancel or recover any elements of remuneration (or similar) that may be available to any member of the Group pursuant to any remuneration policy (including any further malus and clawback policies) operated by any member of the Group, the terms of any incentive plans or awards operated by any member of the Group, any employment agreement, any other terms and conditions and/or Applicable Law applicable to any Executive, in each case from time to time in force, and/or pursuant to any other legal remedies available to any member of the Group. Recovery (or similar) may be applied pursuant to both this NYSE Clawback Policy and any such other policies, plans, awards, agreements, terms, conditions, Applicable Laws or similar in
respect of the same award of remuneration, provided that there shall be no duplication of recovery.
7.DISCLOSURE
a.In the event of any Restatement, the Company shall disclose certain information in its annual report on Form 20-F, as required by Form 20-F. This information shall include, without limitation:
i.the date on which the Company was required to prepare the Restatement;
ii.the aggregate Recoverable Amount (in US dollars), including an analysis of how the Recoverable Amount was calculated, or, if not determined, an explanation of the reasons;
iii.any estimates used to determine the Recoverable Amount for Financial Reporting Measures related to share price or total shareholder return and an explanation of the methodology used for such estimates;
iv.any required details of Recoverable Amounts that remain outstanding (on an aggregate, individual, group or other basis, as required) and for which recovery has been forgone due to impracticability and the reasons why, for the relevant annual report on Form 20-F and otherwise pursuant to the requirements of any other annual report or statement it is obligated to prepare and file under the Exchange Act.
b.This NYSE Clawback Policy shall be filed as an exhibit to the first annual report on Form 20-F that the Company is required to file under the Exchange Act after the adoption of this NYSE Clawback Policy. If this NYSE Clawback Policy is amended, the amended policy shall be filed as an exhibit to the first annual report on Form 20-F that the Company is required to file under the Exchange Act after such amendment.
8.ADMINISTRATION AND OPERATION
a.The Remuneration Committee has the exclusive power and full and final authority to: (i) administer this NYSE Clawback Policy, including, without limitation, the right and power to interpret the provisions of this NYSE Clawback Policy; (ii) make all determinations deemed necessary or advisable in applying this NYSE Clawback Policy (which in every case shall be made at the Remuneration Committee’s absolute discretion, without this being limited by references in certain clauses but not others to a discretion being absolute), including, without limitation, determinations as to: (a) what constitutes Incentive-Based Compensation, a Recoverable Amount or other remuneration; (b) that a Restatement has occurred (in reliance on any decision in this respect of the Audit Committee); and (c) whether a recovery is impracticable; and (iii) delegate any power or discretion under this NYSE Clawback Policy to such person or persons as it may determine (and in which case this NYSE Clawback Policy shall be applied accordingly). The Remuneration Committee
may delegate administrative duties with respect to this NYSE Clawback Policy to one or more officers or employees of the Company.
b.Any action, interpretation or determination taken or made by the Remuneration Committee pursuant to this NYSE Clawback Policy will be final, conclusive and binding.
c.From and after the adoption of this NYSE Clawback Policy, each award agreement or other document setting forth the terms and conditions of any annual incentive or other performance-based award granted to an Executive shall include a provision incorporating the requirements of this NYSE Clawback Policy.
9.GENERAL
a.Any provision in this NYSE Clawback Policy can apply even if the Executive was not responsible for the Restatement in question or if it took place before the grant and/or vesting/release of any remuneration which is subject to recovery.
b.The means of recovery can be different for different Executives in relation to the same or different events depending on the particular facts and circumstances of the Executive and their remuneration.
c.An Executive will not be entitled to any remuneration or compensation from the Group in respect of any application of this NYSE Clawback Policy.
d.The remedy specified in this NYSE Clawback Policy shall not be exclusive and shall be in addition to every other right or remedy at law or in equity that may be available to the Company or a member of the Group.
e.The terms of this NYSE Clawback Policy shall apply regardless of any agreement, undertaking or suggestion (or similar), whether or not contractual, that any remuneration shall not be subject to recovery.
f.The invalidity or unenforceability of any provision of this NYSE Clawback Policy shall not affect the validity or enforceability of any other provision.
g.South African law governs this NYSE Clawback Policy and its construction. The South African courts have non-exclusive jurisdiction in respect of disputes arising under or in connection with this NYSE Clawback Policy.
h.References in this NYSE Clawback Policy to the phrase “including” (or similar) shall not limit or prejudice the generality of the following words (without this being limited by such references in some clauses but not others).
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