DRDGOLD Limited Q4 FY2021 earnings call

• Strong financial performance: Revenue up 26% to over R5.2 billion, operating profit up 39%, production up 6% to just shy of 5.75 million tons. Headline earnings up 127% due to high gold prices and performance. • Sustainable development focus: 50% increase in socioeconomic spend, 23% female staff (double the mining industry average), 38% female board members. Focus on inclusive environment and social economic development. • ESG initiatives: Environmental spend doubled year-on-year, 115 hectares of additional vegetation established, tailings management with independent authorities and technology like satellite imagery and drone surveillance. • Operational trends: Ergo saw good volume throughput but slightly lower yield, with focus on high volume, lower grade scenario. Falls has simpler operations with response to gold price changes and milling costs impact. • Capital projects: Plan to spend ~R600 million on capital, including green energy (solar power generation and storage), optimization of resource policing, and details on solar plant to be presented later in the year.

The company has two main segments: Ergo and Falls. For Ergo, revenue was up 29% year-on-year, volume throughput increased by 30%, and operating profit surged by 57%. For Falls, revenue was down 14% between periods but up 18% year-on-year in response to the gold price increase. Operating costs for Falls increased by 15% due to milling costs coming into effect for the first full year. Ergo's volume throughput was up 30% with operating profit up 57%, showing resilience despite challenges like load shading. Falls saw a 13% decrease in volume, responding to a 14% revenue decrease between periods, but year-on-year revenue was up 18% due to the gold price increase.

• Plan to spend ~R600 million on capital in the next year, focusing on green energy (solar power generation and storage) and resource optimization. • Solar plant details to be presented later in the year, with size and cost of the project to be fully detailed. The project is ready to go but awaits regulatory approvals, with potential to be large depending on regulator support. • Aim to plan big but implement carefully to maintain production rate and resource optionality, ensuring not to close doors on business potential.

• Regulatory challenges: Delays in getting approvals for solar projects from municipalities and regulators, which could impact execution of capital projects. • Execution ability: Concerns about having the capacity to execute multiple projects in a short time due to resource and strategic focus balance. • Lower yield periods: Managing operations through periods of lower yield and ensuring sustainable profitability while adapting to lower grade, high volume scenarios.

Q: How is the dividend decision related to cash flow and future projects?

A: Dividends are based on application of funds. While cash flow is strong, dividends are managed to create a buffer, with funds potentially used for projects like Falls Call Phase 2 and resource optimization.

Q: Do you foresee a change in the production split between Ergo and Falls?

A: Currently, the split is similar to previous years, but with the kick-in of Falls Call Phase 2, the split is expected to change favorably towards Falls, though details will be based on budget and project execution.

Q: What are challenges in executing multiple capital projects quickly?

A: Concerns about balancing strategic focus and day-to-day operations, with a need to bring in more senior team members to handle strategic aspects while others manage day-to-day chores, ensuring quality execution of projects.