1
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, 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 R14.27 per $1.00, the year end exchange
rate on June 30, 2021.
In this Annual Report, we present certain non-IFRS financial
measures such as the financial items “cash operating costs
per
kilogram”, “all-in sustaining costs per kilogram” and “all-in costs
per kilogram” which have been determined using industry
guidelines
promulgated by the World Gold Council, which we use to determine
costs associated with producing gold, cash generating capacities of
the
mines and to monitor performance of our mining operations. An
investor should not consider these items in isolation or as
alternatives to,
operating costs, 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 cash operating costs, 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.
Acquisition
of gold assets
from Sibanye-Stillwater
and subsequent
exercise of
option to purchase
shares
On July 31, 2018, we completed the acquisition of the gold assets
associated with Sibanye Gold Limited, trading as Sibanye-
Stillwater’s (“
Sibanye-Stillwater
”) West Rand Tailings
Retreatment Project (“
WRTRP
”), subsequently renamed Far West Gold Recoveries
Proprietary Limited (“
FWGR
”).
This acquisition significantly increased our assets and revenues
and added 2.72 million ounces to our Ore
Reserves.
In connection with the acquisition, we issued to Sibanye-Stillwater
new shares in the Company 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 (the “
Option
”). On January 8, 2020, Sibanye-Stillwater exercised the
Option. On January 22, 2020 Sibanye-Stillwater subscribed for
168,158,944 DRDGOLD shares at an aggregate subscription price of
R1,086
million. These shares were issued at a price of R6.46 per share,
being a 10% discount to the 30-day volume weighted average traded
price.
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;
●
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 2022;
●
statements with respect to agreements with unions;
●
our prospects in litigation and disputes;