Niël Pretorius, Chief Executive Officer Investor presentation May … · First interim dividend declared December 2012 Long capital, steady yield Operating profit for year ending

Niël Pretorius, Chief Executive OfficerInvestor presentation

May 2013

Disclaimer

Many factors could cause the actual results, performance or achievements to be materially different from any futureresults, performance or achievements that may be expressed or implied by such forward-looking statements, including,among others, adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in thegold price, a sustained strengthening of the Rand against the Dollar, regulatory developments adverse to DRDGOLDor difficulties in maintaining necessary licenses or other governmental approvals, changes in DRDGOLD’s competitiveposition, changes in business strategy, any major disruption in production at key facilities or adverse changes inforeign exchange rates and various other factors. These risks include, without limitation, those described in the sectionentitled “Risk Factors” included in our annual report for the fiscal year ended 30 June 2012, which we filed with theUnited States Securities and Exchange Commission on 26 October 2012 on Form 20-F. You should not place unduereliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake anyobligation to publicly update or revise these forward-looking statements to reflect events or circumstances after thedate of this report or to the occurrence of unanticipated events. Any forward-looking statements included in this reporthave not been reviewed and reported on by DRDGOLD’s auditors.

May 2013 2Investor presentation

Introduction

Among largest surface tailings retreatment companies in the world

Retreating gold tailings from world’s single largest ‘stockpile’, established over 100+ years

Recovery sites and plants, covering West, Central and East Witwatersrand

Structure compliant with SA Mining Charter

May 2013Investor presentation 3

Introduction, cont’d

Listed on JSE and NYSE EuronextMarket capitalisation: three-month range from $275 million to $300 million10 biggest shareholders hold 41.9%

Liquidity as percentage of issued stock traded (March 2013 annualised)• JSE: 44%• NYSE: 75%

Coverage: JP Morgan; Edison; Cadiz; Merrill Lynch initiating soon


Investec JSE 41 246 984 10.7%

Skagen AS NYSE 37 247 010 9.7%

Soges Fiducem SA (Brussels) JSE 17 821 240 4.6%

Citibank JSE 10 655 867 2.8%

State Street Bank JSE 10 247 831 2.7%

GEPF Equity JSE 10 190 134 2.6%

Standard Bank JSE 9 627 833 2.5%

Van Eck Associates Corp. NYSE 9 319 700 2.4%

Clearstream Banking SA Luxembourg JSE 8 976 508 2.3%

Ergo Mining Operations (Pty) Limited JSE 6 205 559 1.6%

Structure

Simple

Compliant with South African legislation in terms of black economic empowerment (BEE)

• historically disadvantaged employees own 6% through trust

Compliant with Zimbabwean indigenisation legislation


How the business works

Up to 2Mtpm of slimes material recovered from mine dumps and tailings dams with high-pressure water jets

Slimes mixed with water, resulting slurry pumped to two CIL plants

Dissolved in cyanide, carbon loaded, eluted and recovered in electro-winning circuit

Residue disposal at large tailings deposition facility

Head-grade average: 0.38g/t

Recovery on average: 52% (0.197g/t)


Operational flow chart, Including proposed flotation/fine-grind circuit

Operational differentiators

Mechanised, 24/7/365 operationCompetitive advantage

• Ergo plant• tailings deposition facility• resource: on-surface stockpile, built up over 100+ years• land access infrastructure for pipelines and other installations

Established, experienced management team


Our operating footprint


Factory-like challenges

Sensitive to volume

Sensitive to grade

Extremely subtle metallurgical balance, with very long leads and lags

9May 2013Investor presentation

Strategy

Lower risk, lower cost, higher marginGrowth through:

• new technology• driven by ongoing research and development (R&D)

• R&D’s first delivery: new flotation/fine-grind circuit• cautious, low-capital diversification

• geographic • product


Delivery on strategy: lower risk

Operational risk:

• more mechanised – less volatile

• 24/7 process

• on-surface

• defined, visible resource

Strategic risk:

• long capital – significantly lower stay-in-business capital

• processing risk rather than underground mining risk

• greater degree of optionality – greater ‘switch on/switch off’ flexibility

• fewer hands involved in moving run of mine material

• lower safety interruption risk


Investment drivers FY 2012


Driver 2012 2011

Free cash flow margin 12% 0%

ROE 20% 9%

EBITDA R502.2 million R264.9 million

EBITDA margin 17% 10%

Production 232 353oz 265 179oz

Dividend yield 1.9% 2.3%

Share price R5.35 R3.27

PE ratio 6.2 11.7

Current ratio 1.8 1.2

Operating margin $583/oz $253/oz

Cash and cash equivalents R298.5 million R259.1 million

Cost breakdown

35%

30%

16%

4%

4%

11%

Labour and contractorsConsumablesElectricityWaterRehabilitationAdministration/other


Gold produced quarterly


0

200

400

600

800

1 000

1 200

1 400

Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun12 Sep-12 Dec-12 Mar-13

Gold production: deviation from average by quarter (kg)

15

-150

-100

-50

0

50

100

150

Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13

May 2013Investor presentation

Share price performance

16

750

725

700

675

650

625

600

575

550

525

500

475

450

425 01-03-12 01-05-12 01-07-12 01-09-12 01-11-12 01-01-13 01-03-13 10-04-13

Source: INet Bridge


Ergo performance Q3 FY2013

17

5 613

5 5255 598

6 066

5 766

5 200

5 300

5 400

5 500

5 600

5 700

5 800

5 900

6 000

6 100

6 200

Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

Volume (000t)

0.194

0.181

0.199 0.200

0.194

0.17

0.18

0.19

0.20

0.21

Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

Yield (g/t)

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

0

200

400

600

800

1 000

1 200

1 400

Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

Gold - kg Gold - oz


34.8

154.7

73.7

263.2

-53.3

111.685.7

144.0

-100

-50

0

50

100

150

200

250

300

Q1 Q2 Q3 YTD

Free cash flow (Rm)

FY2012 FY2013

Group performance, Q3 FY2013

18

108.9141.0

105.6

355.5

114.7

171.9

114.7

401.3

0

50

100

150

200

250

300

350

400

450

Q1 Q2 Q3 YTD

EBITDA (Rm)

FY2012 FY2013

1215

12

39

2025

14

59

0

10

20

30

40

50

60

70

Q1 Q2 Q3 YTD

HEPS (SA cents)

FY2012 FY2013

34

4037 37

32

41

3335

0

5

10

15

20

25

30

35

40

45

Q1 Q2 Q3 YTD

Operating margin (%)

FY2012 FY2013


Financial review: income statement for the quarter ended 31 March 2013 (Q3 FY2013)

19

Q3 2013 Q3 2012 CommentsRm Rm

Continuing operationsRevenue 531.0 458.3 Up 16%; higher gold price and gold production

Net operating costs (360.3) (296.1) Up 22% due to 3% increase in volumes, annual price increases

Operating profit 170.7 162.2 Up 5%

Depreciation (34.7) (31.7) Up 9%; new infrastructure being depreciated

Movement in provision for environmental rehab (19.1) (9.8)

Environmental rehab costs (11.5) (13.5)

Other income and costs (25.4) (33.3)

Net finance income 13.3 3.1 Dividend received from Rand Refinery of R6.8 million

Profit before tax 93.3 77.0 Up 20%

Taxation (12.4) (19.5)

Profit after tax 80.9 57.5 Up 41%

Discontinued operation – 6.9

Net profit 80.9 64.4

HEPS from continuing operations (cents) 14 12 Up 17%

HEPS from total operations (cents) 14 13


Financial review: balance sheet at 31 March 2013 (Q3 FY2013)

20

Q3 2013 Q2 2013 CommentsRm Rm

Property, plant and equipment 1 838.4 1 767.9

Non-current investments and other assets 141.0 141.7 Includes Village shares of R91.2 million

Environmental rehabilitation trust funds and guarantees 181.8 182.0

Deferred tax asset 19.1 14.0

Cash and cash equivalents 410.3 398.4 Positive free cash flow offset by dividend paid

Other current assets 248.0 266.4

Total assets 2 838.6 2 770.4

Equity 1 765.8 1 755.2

Long-term liabilities 151.9 152.4 Total borrowings of R165 million

Provision for environmental rehabilitation 546.1 527.1

Deferred tax liability 112.0 98.6

Current liabilities 262.8 237.1

Total equity and liabilities 2 838.6 2 770.4

Current ratio 2.5 2.8 Good liquidity


Delivery on strategy: technology growth

New flotation/fine-grind circuit

• objective: optimise 11Moz resource

• 16-20% increase in extraction efficiency

• capex: R250 million (US$32 million)

• Total cost increase (real terms): R52/t (from R45/t) over LOM

• uranium upside potential (bolt-on, resin-in-pulp technology)

• feasibility study in progress

21

Total slimes feed to Ergo plant

4% mass pullto fine grind

Flotation

CIL

Milling

96% to conventional

CIL


Flotation/fine-grind project – progress

All four mills delivered, unpacked and mounted on basesMills installed – final pipe work and electrical installation to be completed in April 2013Water commissioning began February 2013Full production on track for Q1 FY2014±R55 million to be spent over next two quarters

22

Activity Feb2012

Mar2012

Apr2012

May2012

Jun2012

Jul2012

Aug2012

Sep2012

Oct2012

Nov2012

Dec2012

Jan2013

Feb2013

Mar2013

Apr2013

May2013

Jun2013

Jul2013

Aug2013

Project approval

Strip and clear redundant plant

Order/delivery of new plant

Refurbish existing plant

Shipping of mills from Canada

Install equipment

Plant commissioning

Tonnage build-up

Full tonnage

100%100%

95%95%

100%95%

20%

Completed

Shows % complete

0%0%


Looking ahead

Maintain tonnage volumes to plantStart commissioning of flotation/fine-grind circuitZimbabwe clean-up Move on ERPMSupport TCTA re AMDSecure additional water supplyExtend EBDA footprintLaunch Best Life

• employee personal development programme


Key targets

Production – between 135 000 and 140 000 ounces per year

Monthly throughput: ~2.0-2.1Mtpm

Cash costs ($/oz): ~US$1 000-US$1 100

Maintenance capex: ~R11 000/kg; US$42/oz


Investment case

5th consecutive annual dividend

First interim dividend declared December 2012

Long capital, steady yield

Operating profit for year ending June 2012: R622 million (U$75m)* – at the time ~30% of market cap

Top performer, benchmarked against other major SA producers: cash cost (R/kg), operating margin, free cash flow margin, NCE margin, share price performance, dividend yield

Conservative approach to capital management – 9 852 800 shares bought back to offset stock-option dilution

25

*At an exchange rate of 0.121 US cents per rand


Registered office 1st Floor, Quadrum 1Quadrum Office Park50 Constantia BoulevardConstantia Kloof Ext 28RoodepoortSouth Africa

PO Box 390 Maraisburg 1700 South Africa

Contact details Tel: +27 (0) 11 470 2600 Fax: +27 (0) 11 470 2618 Email: Craig Barnes, CFO: [email protected]

James Duncan, Investor Relations: [email protected]

Website: www.drdgold.com

Shareholder data (Incorporated in the Republic of South Africa) Registration No.1895/000926/06 JSE share code: DRDISIN: ZAE 000058723 Issuer code: DUSM NYSE trading symbol: DRD


Niël Pretorius, Chief Executive Officer Investor presentation May … · First interim dividend declared December 2012 Long capital, steady yield Operating profit for year ending

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