Feasibility study reveals longer lifespan for DRD’s Ergo mine
DUAL-listed DRD Gold yesterday said results from a pre-feasibility study conducted in its Ergo plant reflected an operating life of 15 years at the end of December – slightly more than the 10 years the company had previously reported.
DRD Gold said this meant that the operating life of Ergo would increase to 2031, with gold reserves increasing to 3 million ounces from the 1.8 million ounces identified before the study. It said the revised estimates came after a drilling programme and pre-feasibility study that was started in September last year.
However, DRD Gold said it would need to invest more than R500 million to access additional mineral reserves identified in the new study on its surface gold tailings on the plant situated about 50km south east of Johannesburg.
“Capital expenditure of R507.7m will be needed to access these dumps and dams. Included is the cost of 162.4km of pipelines and new pump stations.
“All required permits are in place,” the company said.
The South African producer that recovers gold from the retreatment of surface tailings owns 100 percent of its holding company, Ergo Mining Operations, which in turn has full ownership of operating entity Ergo Mining Proprietary (Ergo).
The results of the study came four months after the company reported a dividend yield of 7.3 percent in the 2016 financial year.
Last year, DRD Gold said it had strengthened 153 percent on the JSE last year and had grown its market capitalisation to over R3 billion.
The group said results from the new Ergo study showed that its measured mineral resources increased by 52.6 percent from 161.9m tons to 261.5m tons.
It said the study also revealed that mineral reserves jumped by 66.6 percent from 179.9m tons to 312.6m tons.
DRD Gold said it would report on the results of its ore reserves estimates in its next annual report.
It said the estimates of its reserves should be considered best estimates at the time of reporting.