There's nothing different to the format this time. We'll be using very similar information or a very similar format to that which we used in the past. There are a number of themes that will emerge, though, that we'll pay some additional attention to. And those themes are going to be volume throughput. It's quite a lot that we wanna say about that. Our cost makeup for the six months, what's happening to electricity now and going forward, the social dynamic that is starting to also have its impact or that had an impact and how that's being managed. And then also one or two things maybe about the political and regulatory reality within which we function. But let's jump into the presentation itself and go to the key features for the six months.
So the gold price has been very, very good, and that, I think, has brought some welcome coloring to these results. It's enabled us to, for the 17th consecutive year, pay an interim dividend. This dividend matches the one of last year's half-year dividend, ZAR 0.20. That's on the back of strong revenues of just under ZAR 3 billion, 12% increase. Operating profit increase of 15% of ZAR 909 million. I would have loved to be in a position to say around about ZAR 1 billion. So, I think that is a number where internally we're thinking what may have been, what could have been. Production was down by roughly 7%, and I'll elaborate on that as I go through the segmental analysis. Headline earnings on the back of both revenues and the increase in operating profit have gone up by 10%.
I think because of positive, headline earnings, it's just all the more compelling to, to again, declare that dividend. It informs it to an extent, it's one of the considerations when it comes to the decision whether or not to, to declare a dividend. We again played our part into the, the fiscus with ZAR 127 million going in revenue to SARS, i.e., PAYE. You'll also see in the, the detailed analysis, the, the tax position. We are paying income tax. All-in Sustaining Cost margin of, of roughly 19.4%, so the gold price did help us there.
And then and pretty much right in the middle of the page, the main feature is being in a position to take advantage not to the full extent of, of the potential advantage, but being in a position to take advantage of a very attractive gold price with a 22% increase in the gold price received, just under ZAR 1.2 million per kilogram. This year or last year, rather, was my 20th year with DRDGOLD, and I remember when I joined DRDGOLD, gold price was hovering around ZAR 60,000 a kilogram. So it's a long time since then. Lots of things have changed. I think the gold price is definitely now rebased and recoupled, relative to a number of different dynamics that inform it. And we'll talk a little bit about that as well later on if there's time.
Because our operations are by and large in the city, the amount of dust that comes off our various reclamation and deposition sites are important. We measure those very, very closely, with, if I'm not mistaken, just over 290 monitoring sites. And the exceedances that we saw there, and those are exceedances in terms of the stipulated regulatory thresholds, those exceedances came down to 0.6% of the number of samples taken. So less than 1% of the samples that we took registered an exceedance of the dust standard and by and large a relatively marginal exceedance as well. So the fact of the matter is that DRD is putting very little dust into its surrounding communities.
You no longer if you live next to one of our tailings dams, you no longer have to wash your curtains twice a month as was the case 10, 15 years ago when we, we started these, programs to, to vegetate, the, permanent tailings deposition facilities and so forth and so forth. So it's an important, parameter for us as well. Looking at the operating trends and, and here, we'll elaborate a little bit more on, on some of the impacts that we dealt with, during the course of the half-year. So as you could see, just looking at Ergo's operating volume trend from, half-year 2023 to half-year 2024, see that volumes are quite a bit down.
And that's by and large a function of the fact that two large sites that we, that wanted to commission, during the course of last year already were delayed for a variety of reasons, and those only started early this year. Now, in the past, including second part of 2023, we were in a position in fact, the bulk of half-year one as well, we were in a position to make up tons from a number of legacy and cleanup sites. We spoke about that in the past where we had between six and seven legacy and cleanup sites at any given point in time where we systematically started working through those sites, to take them to a point where they could be handed back for use, so where they were restored, cleared of all remaining mine waste.
Now that process had to be accelerated when it became apparent that the overlap between sites that had become depleted and new sites that were supposed to come online at Ergo, where that time schedule had become distorted because of these delays. So up until roughly October of last year, we were in a position to source quite a lot of material to make up for the lost tons from those two sites. And the shortfall, or the call from those two sites, roughly 500,000 tons a month, which we couldn't source. So there was a quite big gap to fill with mechanical lifting and transportation and so forth. All of that ran out by the end of October. Those sites are clean. They're down to what was referred to in the past as down to Transvaal.
Now we just scale down to Ergo. There was a two-month gap while we were waiting for two sites in particular to come online before we could resume full-volume production. We were in the process of ramping up production from these two new sites. Those two months were November and December. You'll see in the letter that I wrote, we talk about how we managed to sort of keep up and do quite well up until early in November when those sites had just been cleaned up. Now, of course, the advantage is that cleanup work with the earth-moving equipment that was due next year and the year after, that's all now been brought forward.
The other advantage, I suppose, if one wants to see the silver lining here, the other advantage is that quite a lot of ounces that form part of our resource, our mineral resource, have simply not been mined because these ounces do not form part of that resource, and they certainly didn't feature in our life of mine plan. So you sort of had substitute ounces that were unplanned that's now filled the place of ounces that were supposed to have come in earlier. And that would then have the effect that they are going to be mined later. They're not lost. They're just going to be mined later. And they're going to be hopefully sold at a time when the gold price is even more favorable.
So, huge frustration not being able to sort of stick to the plan, but then at the same time, it's not all bad. These aren't perishable goods. Gold doesn't weather, so if you don't mine it now, you're gonna mine it at some point in the future. And that will also obviously play a bit of an impact or have a role on our [PRS] and we'll update that as we go along. But just to illustrate the stark difference in how high-grade material from cleanup sites had offset the lower volume. So while gold production is down 7%, the volume throughput numbers were down by 13%.
So there's a bit of a disproportionality in the two, which indicates to you the extent to which there was reliance on sites that didn't form part of the life-of-mine plan. But we're through that, and we're very, very relieved that we are, and we can now look forward to stabilizing these new sites. And you'll also see that the guidance on cost, for example, is slightly lower than what the unit cost per kilogram were for the half-year. So we do believe that there's going to be a slight softening and impact. So, moving on—sorry, that was a bit of a mouthful—but moving on, yield was also slightly down. The reason being that we did start mining one of the high-volume sites. So there were four sites that were supposed to come online as part of this transition.
Sorry, this one is now skipped forward. There we go. There were four sites that were supposed to have come online as part of this transition. The first one did come online in November of 2022. The second in July of 2023. That was a very high-volume site. That's Rooikraal, and the other two only later on. The slight difference in recovered grade was the impact of the high-volume, lower grade coming in from Rooikraal. Also, obviously, the mix and match from these various sites, but still a fairly good yield, slightly higher than planned. And that helped to offset the lower tons as I spoke about earlier. Production over the last three periods illustrated there relatively flat. This is where what could have been comes into the equation. We weren't far away from matching last year.
If either the sites had come online or if we didn't run out when we did in October, we would have been within spitting distance of half-year 2023. But it is what it is. And, as I said earlier, the gold price has been very good to help sort of close that gap that had opened up in that regard. For Far West Gold had now also mined through the first of its mine dumps, the number five dam, which was the first of the dams that had started mining, a stone's throw away from the plant. That dam's been substantially depleted. That's the correct term. And there's only a bit of floor cleanup that's taking place there as well. Obviously, that adds to the cost, but these aren't loss-making tons. They still make a contribution.
But that obviously has had the impact that its cost per ton has gone up slightly. But Driefontein Number 3 Dam, which is the new site that it's mining, and it's a high-volume site, that one is coming along quite well. It's achieving throughput with relative ease. The plant is running slightly below full throughput capacity because we don't wanna put more than 500,000 tons of material onto the number four tailings deposition facility, in order to just make sure that we have deposition space for as long as we require before RTSF comes online. So, the volume trend there is encouraging, and it's going along nicely. The initial recoveries from Drie fontaine with slightly lower head grades, as the topper sections were being opened up and face established in those sections, were slightly lower.
You would have seen in earlier communications, though, that we talk about the high-shear agitator that's now been launched, or commissioned, rather. It uses a bit of power, which also contributes to cost. But the impact of that, we believe, and based on early results, it's actually quite good. We're seeing some very nice improvements in recovery efficiency there. And the word basically means it's introducing a lot of energy into the slurry mix during cyanidation. It improves cyanidation leaching. Jaco has an explanation for those of you that are technical that goes into the kinetics of the whole process and so forth. You're more than welcome to ask him about that. Basically, what it means is that more of the gold that's in the mix now gets released, finds its way into solution and ultimately onto carbon.
So production there was good, back to 663 kg for the half-year up from the previous six months. So then looking at the group operating trends, a sharp dip in volume between the first six months of the calendar year and the period preceding that, and then a slight recovery with, as I said earlier, two of the sites coming on stream at Ergo. Also the yield, I think, has been explained. Still pretty good, the fact that we can get that sort of recovery out. And that's testimony both to the high-grade head grades from these reclamation sites, these cleanup sites, but also plants that are running. Our plants are being managed really well. Their efficiency factors are good.
I think the way that information is being managed is also assisting to keep them relatively stable state. So looking at production, pretty flat half-year on half-year, but as I said earlier, 7% down relative to the comparative period of 2023. That will now be the financial review, and I'll hand you over to Riaan to take you through some of the numbers. Thank you.
Thank you very much, Niël. Good morning, everyone. As always, my privilege to take you through the financial numbers. Just to provide some, again, context from my side, it's really an exciting period for DRD as we're building our gold growth story.
And always when I talk about DRD, I, I get excited because we, we're very sure of, of what we want to achieve in the long run, with our purpose being reversing the environmental legacy of mining. And every time I look at the results and every period that passes, I can see a little bit more of that. And for me, that is the, the theme. And you'll see it through in the property plant equipment numbers. You'll see it in the cash flow, and I'll, I'll emphasize that, in the presentation. And then while we do that, while we're setting up for the future, we're also operating. And Niël provided that, that context.
And just a big thank you from my side to an exceptional operational team that runs the business 24 hours a day, 365 days a year. That's amazing to see, when there's challenges, how the team reacts. And that's become part of the DRD story, which I'm very proud of. And also ably assisted on the financial reporting side by an exceptional team. So thank you very much for that. As Niël has mentioned, we always present these results, taking the first six months of our financial year in comparison to the first six months of last year 'cause, as everyone knows, we do have seasonal changes, well, seasonal rain and no rain in the winter, but also, for example, around a winter tariff that we pay in the winter months for electricity.
So we always use that as a base, but it's good to look through all the various periods to understand it. Niël alluded to our booklet. Just always prepared with great care. So I encourage you, other than just this presentation, to have a look. Then looking at the DRDGOLD financial results, with the context that Niël provided, and again, I'm generally comparing the first six months of our financial year 2023 with the period that's just passed, so 31 December 2023. If you look at revenue, up 12%, assisted, as Niël mentioned, by a 22% increase in the average rand gold price to ZAR 1.173 million per kilogram. And in the context of the DRDGOLD results, with tonnages down, gold sold was 8% lower than the comparable period in 2023.
Cash operating costs, as Niël alluded, and just to recap, so continued reclamation of legacy and cleanup sites, together with double-digit increases in machine hire and contract reclamation costs, resulted in a period-on-period increase of 12% in costs. Then with some gold inventory adjustments, leaves us with an operating profit up 29% period-on-period to just over ZAR 431 million, which, again, is as a very solid contribution. And as Niël put it, and more and more we look at it this way, this is just the financial profit number, which is very important. But together with that, we saw massive environmental cleanup. So if the environment had a profit number or a value number, that's definitely a tick, or a green block in that vast areas were cleaned to redo as Niël mentioned, which is a great win.
solid results from Ergo with the six months looking ahead, as we communicated, large-volume sites up and running, which is our sustainable business, large volume that we wanna process. On the Far West, the gold recovery side, very similar revenue numbers, in that gold sold was down by 8% period-on-period, and also assisted by the same rand gold price increase of 22% leaves revenue up 12% period-on-period for Far West Gold Recoveries. Cash operating costs looks more severe at face value, but very good reasons for it. So up 24% period-on-period with specific increase in reagent use, particularly slime and steel balls, dealing with the increased acidity and coarser material coming from the Driefontein 3 site. And then obviously, the electricity costs relating to Driefontein 3 is more than in comparison to Driefontein 5 in the comparative period.
Niël mentioned the installation of the high-shear agitators, adding to costs, but in a good way, that it will look to release more gold for us, which is why we're after that kind of technology. Then also for Far West, similar to Ergo, still continuous cleanup of the Gryfontaine 5 site, with machine hire and diesel, also, contributing to that increase. So then looking at the operating profit, obviously, with that higher cash operating cost increase, the operating profit up just 4% period-on-period, still very impressive, for the size of the operation, and what the team is busy doing there, still to contribute just under ZAR 500,000,000 very impressive, result overall.
Then, looking at the group financial trends, yes, operating margin, do you see margin creep there, which is something that we manage on a daily basis and also in our long-term model is something that we look at closely. Obviously, we're a we're a price taker. We don't generally hedge. We fix the price of, of gold. So this is something that we continuously manage. But to have the margin still above 30% is very healthy. And then the operating margin flows into the all-in sustaining cost margin, with our sustaining CapEx down 14% period-on-period, with that margin close to 20%, which is still very healthy for us.
Then the highlight for me, as I've mentioned at the start of the presentation, and it may look negative, the free cash flow that we've generated for this six months ending that ended December 2023, there's such a good and exciting story behind it. And the main reason for that, and we'll obviously talk to the cash flow in a while, was our capital expenditure, our increase in property, plant and equipment up by ZAR 687 million or 177% to almost ZAR 1.1 billion. So what we're doing with our cash, both the ZAR 2.5 billion that we had at the start of this period, but also cash that we generate, is to set up that growth capex.
And at the moment, that's very exciting for us, daunting at the same time, but really exciting to see the business set up for decades to come. And then headline earnings per share, obviously, we still operate while we're building our future business, still a very solid $0.68 per share and very much comparable to the six-month period ending December 2022. And moving on to the income statement or statement of profit or loss as it's called. Hopefully, all of this will make sense now in the context that Niël sketched around operations and also the financial trends for both Ergo and Far West.
So yes, obviously, revenue follows that trend up by 12%, gold price up 22%, gold sold down 8%, cost of sales, with the cost increases, as we explained, up 11% period-on-period, giving us a gross profit from operating activities of just of ZAR 762 million. Admin costs, some increases there and, and human capital spend and also IT expenditures, finance income in line with, with the previous six months, still high cash balances, that we carry, and also growth in our environmental funds and some dividends received making up that balance. And then income tax, Niël alluded to it, although this wasn't a high, cash paying period for us from an income tax point of view based on the profit that the six months generated, there's definitely an income tax number. Obviously, changes in deferred tax as well going through that line.
And there's also an income tax payable on our balance sheet, leaving us with profit for the period up 10% to ZAR 589.3 million. Moving on to the balance sheet or the statement of financial position as it is now called. Again, I wanna emphasize that first line. So from a sustainability and, and long-term, business planning point of view, for me, that is that is excellent reading. So more than half a more than ZAR 1 billion increase period-on-period to that ZAR 4.4 billion as presented there. And that's, that's really encouraging to see. Non-current investments and other assets, next line, just shows our contribution still in the rehabilitation growth and also mainly our investment in Rand Refinery, reflected at, at fair value. Cash and cash equivalents, yes, we're, we're using our cash, which is which is part of the plan.
So that's down period-on-period, but I'll color that in with the cash flow statement on the next slide. And other current assets, just to explain that big increase, so that includes a ZAR 610 million repayment towards our solar project. And obviously, as we order that, and it's being manufactured specifically on the battery side, obviously, as soon as we commission those and bring them into use, that will move up to the property, plant and equipment line. But it's all part of our capital expansion that we execute. Equity, nice increase period-on-period. Provision for rehab, obviously, we don't go through full rehabilitation re-estimates at half years. It's very much the unwinding. It sits there. The deferred tax liability will grow as we claim capital allowances. So it creates that temporary difference.
Then current liabilities, the increase is increasing trading on the payables. As I've mentioned, a current tax liability also recorded. So current ratio, so yes, not at the 5.4 as previously, but still a very, very, very healthy 3.7, as you can see on the slide. Then the statement of cash flows, I always say, for me, the most relevant, because ultimately, we need cash to pay our employees, to pay taxes, to add to our property, plant and equipment, to pay dividends, to share all this, and very much forms the backbone of our reward structure, on a short-term basis at DRDGOLD as well. So, it is the most relevant for me and the one that is what it is, if I can put it like that, where other measures sometimes in accounting may be criticized.
Cash flow is, I believe, as pure as you can get. Just briefly talking through that then, cash generated from operations, stable period-on-period at ZAR 600 million. Finance income received, yes, we still do carry large cash balance. So that's the finance income on our own cash, dividends, as I've mentioned, mostly from Rand Refinery, very small finance expense paid, the bigger finance expense in the income statement relates to the unwinding of the discount on our rehab liabilities mostly. And then, as I've mentioned, not a big income tax paying period from a provisional tax point of view. Obviously, that's based on our 12-month full cost. We obviously look towards the end of June to revisit that position.
Then, again, to emphasize from my point of view, one of the highlights, so that we added to property, plant and equipment in this period more than ZAR 1 billion, setting up around our major projects, mostly that relating to the solar. Then other big line item there is dividends, that is reflected there as our final dividend of ZAR 0.65 that we paid in September as part of this period. Yes, so an overall net decrease in cash with most of that being contributed to property, plant and equipment, or a big part of that as you can see. Leaving us with our closing cash and cash equivalents still very healthy, ZAR 1.5 billion at 31 December 2023.
So, yes, moving on to the handover slide, before I hand over to Niël, share price, we had an exceptional six months of the calendar year last year, so up until May- June, with a not as impressive second six months of the calendar year, very much reacting to trends that we see in the gold index. But at this point, Niël, I'm gonna hand over to you to please take us through the rest of the presentation.
So thanks, Riaan. Yes, not as impressive as a market way of putting it, but then, I think that was pretty much the same for all of the gold producers. The markets were not kind to the gold stocks in the last six months of 2023.
Interestingly, that notwithstanding the fact that the gold price held up quite nicely, and it was suggested to me during conversation that, that there's this new dynamic, a different dynamic that impacts these, firstly, the gold price and secondly, the share price. In the past, when the West lost interest in gold because of higher interest rates and they started selling gold, there was no safety in it. Nobody bought it, and it was in free fall. Now, whenever the West does that, there are a whole lot of institutions, there are several governments, outside of, of that trading block, so to speak, or that alliance, so to speak, that that are keen to reduce their, foreign currency holdings, in dollar, their dollar position in their foreign currency holdings. And they've been accumulating gold at a steady state.
So gold price is determined by and large by or influenced to a very large degree by appetite for gold outside of the West, outside of London and New York, whereas the price of commodity or the price of stocks, the gold shares, is very much determined by market sentiment in the West. And perhaps that the reason for the very significant disparity between what gold companies are producing in terms of profits and revenue and margin and so forth, and their share price. Compare that to some of the technology stocks because that's where appetite now lies in the West, especially with the seven large companies, Amazon, Tesla, Google, Meta, NVIDIA, and so forth. They've gobbled up a big chunk of investor capital. And as a consequence, because sentiment with regards to gold is bearish in the West, those shares are traded.
Their shares are disposed of, they're dumped. Notwithstanding the fact that they are trading at significantly better multiples to earnings, to EBITDA, to all the earnings that you can think of compared to the technology stocks. We're not complaining, though. We think that that's probably a barrier for accumulation at some point or another. It's gonna turn. I don't think there's gonna be a massive collapse. Sorry, I'm not the expert, but sort of just my own opinion. You know, we go to these gold conferences, and you listen to these prophets of doom and prophets of gold, and they always talk about this massive inflation and fiat currencies collapsing and so forth. Maybe, maybe not. The fact of the matter is, it doesn't really have to be a significant swing. It'll be a relatively marginal swing in market sentiment.
And then you start seeing some of the outcomes that we saw in the first six months of 2023 where DRDGOLD was not just the best-performing stock on the Johannesburg Stock Exchange between January and June, but also came second over five years, losing out to Gold Fields, which makes it bearable. It's another gold producer that is a very well-run company. And I think Martin and his team did exceptionally well and it's well deserved. The price that they got has been nice. To see Harmony in third and fourth and maybe next year. I think we offer very, very good value as a gold industry in South Africa.
Depending on what sort of risk appetite you have, what your expectations are from your investment, you could really pick any one of those four stocks, and they won't disappoint, not with the quality of management that they offer that they present. So, moving on to the next slide, to our environmental, social, and governance slide, it is a big part of our makeup. It's a big part of how we think strategically. Some have said this 100 times in the past: you cannot do business in South Africa without being very aware of your environment, but being very aware of society. And, you know, we've been dealing with a whole host of issues in the last few years, including security, including logistics, including electricity, and so forth and so forth.
I think what the private sector has done exceptionally well is close the gap where services started failing or collapsing in many instances. We see the private sector now also stepping into the Transnet logistics gap, and hopefully, we'll have a solution for that. A very, very significant contribution in terms of renewable power, over the last few years while government acted only towards its own convenience, not adding 1 MW of power to the national grid. I don't think I would be wrong in suggesting that the only development in that regard was generators at the House of the Ministers. The private sector added 4 GW of renewable power that is now systematically also being introduced into the grid. So that's how the private sector has responded to the situation.
Now, the next big challenge for South Africa, I believe, is it's going to be water. I think we are one drought away from a very serious issue with regards to drinking water, with regards to potable water. And in that situation or against that premise, I'm really, really pleased to see that we managed to decrease our potable water consumption by close to 60%. It will be a little bit higher this period. I mean, there are reasons for that. But we had set out quite a number of years ago to systematically reduce our usage of potable water, setting the not particularly scientific goal of reducing it by 10% every year to the point now where more than 95% of all of our water and most of our processed water, even our whole processed water, is in fact recycled and grey.
We need to look after the sources of that gray water, that potable water. There might be some competition in that regard going forward when Gauteng, the taps in Gauteng, start running dry. So that's very much part of our, let's call it, our broader value pursuit and our interpretation of our risk environment and their initiatives in that regard as well. Spoke about dust emissions earlier on, also, rehabilitation. We mine. Our mining is rehabilitation. So this sort of rehabilitation is really to do with final stages of rehabilitation. A big chunk of future rehabilitation, as I mentioned earlier, is now being taken care of with the lifting of the floor cleaning of a number of legacy sites that are now clean. The vegetation of tailings deposition sites is also going on, going along.
Brakpan in particular, which is the larger one, with an approaching urban sprawl. So there's a lot of attention going into making sure that we contain dust, that the dam's also lifting as we speak. It's an active dam. So obviously, quite a bit of attention there. In and around the West or Central Rand, we think we've got dust under control. It's been a long, long time since we've had a complaint in that regard. And if we do, it's typically because of either an open road or because of a construction site nearby, something to that effect. So compared to where we were a decade ago, that's been a massive change. And in terms of quality of life, one which I do believe, the outcome has been very, very favorable, and in line with what we had set out to achieve.
So moving on to the next slide in terms of environmental value add, it's gonna be interesting to see where that second line is going to be. Obviously, the consumption will remain pretty flat, but the carbon emission component is likely to start coming down, over the next few months, to the point where it could potentially almost half, with the solar plant coming on, systematically. We've been pulling 14 MW off that plant as we speak. We are throttling back a little bit because we're not in a position yet to feed back into the grid. There's an 88 kV line that will link up the solar plant with the Brakpan Tailings and then going into a series of substations, and from there, into the Eskom grid. So we'll have the full advantage of the 60 MW of solar power.
We will be in a position to start taking full advantage of that from roughly the end of March when we anticipate the construction of the solar plant will be done. And then, as I say, if the line is up and running at that station, we can get the wheeling sorted out, then we'll have the full benefit of the 60 MW. The battery energy storage system, BESS system, that is also now going to come in systematically, a bit by bit. It should be finished by the end of October, but it's not waiting till the end of October and then we switch it on. It is also a modular system, and it gets installed in chunks of a third each. So we'll keep the market informed in that regard as well.
But this slide is going to be an interesting slide, and its significance will not only be the consumption patterns but also the impact that it's having on both the environment and on the financial bottom line. So in terms of the safety performance and social performance, which includes safety, obviously, once again, we are very grateful that we managed to avoid serious injury and that nobody died in the performance of his or her duties. Also very, very thankful that there weren't any instances of violent crime. Security is from time to time...t hey're getting shot at by gangs, especially in the Far West Rand. Hopefully, one day, we will, as a nation, start taking measures against that and eradicate crime in that area.
But for the time being, our stance is one of taking all reasonable measures to protect our staff and, but for the fact that they were driving in armored vehicles, this could have been a serious incident. So this is the life of a security officer in the mining industry in South Africa today dealing with illegal miners and with copper thieves that are having to be protected at a level that none of us envisaged a few years ago. Quite a bit of money still going into employee training. Women in mining stayed at 24% and HDSA in management 74%. A lot of clever young people coming through the ranks. So exciting times ahead as we start moving, redefining the extent and scope of various senior positions and starting to bring some of our young talent into strategic decision-making and senior managerial roles.
So moving on to the next slide, water shortage solutions. Now, this is something that we've been talking about now for quite some time, and it's lovely to see how our Broad-Based Livelihoods program is still continuing to grow. It's a process that's intuitive. It's very easy to scale. It grows exponentially. And the interesting part of this and this is how one brings, let's call it, the sort of overlapping broader value pursuit into these endeavors is that finally, this is now also starting to play a role in our operational community interface where an established relationship with a community is assisting in community interface. And I'll talk a little bit about that in the looking forward slide on some of the social dynamics that we experienced in the last six months.
You know, I think finally, we could now demonstrate with reference to what we see here, how social investment impacts the financial bottom line as well, where in fact, there's a compelling commercial rationale. If your key driver in terms of business is commercial rationale and commercial outcomes, and you're looking for a reason why you would want to invest in social capital and assist communities becoming increasingly self-sustainable and take that first step out of abject poverty and become more independent, along the some of the programs that we've been launching. If you're wanting to find that argument, here it is.
It's that network that assists you and that facilitates consultation going forward when you need it most, that you're not just a face showing up and wanting to impress, not really understanding what the social dynamic is for the community that you're interfacing with. So on the next slide then, the looking ahead slide. So based on the outcomes of the first six months and particularly the last two months of those six months, we've deemed it fit to not adjust our guidance but to, at the very least, qualify it and say that we seem to be trending even with a recovery towards the end of the year, we seem to be trending towards the lower end of guidance. The sites that were delayed are in the process of ramping up.
They're in the process of being taken to steady state. And typically, it's between six and 12 weeks that it takes to really get all systems going. But they are running. They're contributing, and we're seeing the effect already as we speak. And as a consequence, we've also deemed fit to guide our cash operating costs down from what the average cost per kilogram were for the six months, down from ZAR 814,000 to ZAR 800,000. So we expect to be producing at lower than ZAR 800,000 per kilogram for the remaining six months and then also revised capital investment for the remainder of the year of ZAR 3 billion. So we are about halfway through CapEx for the solar.
There's about ZAR 1 million or ZAR 1 billion left, rather, in that regard, a big chunk of which is being committed. Then, of course, we're also hoping to start at Far West with the RTSF anytime soon now. At Ergo, looking forward to the commissioning of the solar plant. As I said earlier, construction of the solar plant itself should be done by the end of March, the BESS by the end of October. And as and when the system gets linked into the national grid, that 88 kV line is incorporated into the national grid. We'll have the full benefit of that. The ramping up of those tons I referred to so 4L3 is the site where a water usage license that we had hoped to secure, late in 2022 or at least early in 2023 only, came about in January of 2024.
I just reiterated once again the fact that this is an exceptionally complex regime that these officials are having to deal with. It's a regime that's been. It's not necessarily proportionate to the site. It's not site-specific or it doesn't discriminate between sites. It's a. T here's a general set of rules that is applied in respect of all sites. And the consequence being that, you've got to jump through so many different groups. The amount of paperwork that needs to get compiled and submitted in order to get finalization. And every time that there is one little thing wrong, then you basically add six months to the process. So we've had to cut our game fairly significantly in terms of the amount of detail that we submit upfront.
Fortunately, the environment has become between 2018 when this process started until during the course of last year, the environment in which the function has definitely also improved. In 2018, you wouldn't get a meeting with an official before submitting an application for a water usage license. The position of the stance was, "Submit your license, and we'll tell you as we go along what you've got wrong and what we need in addition to what you submitted." And then, you sort of happily cut through along for the next two and a half years answering questions and doing it one at a time, adding six months every time. That's changed. That's definitely changed, without a doubt.
We saw in our interactions with the department on the RTSF in the Far West Rand that very senior officials are quite prepared to engage with our teams early on, give them a sense of what it is that they expect to see, give them a sense of indication, obviously a non-binding indication of whether we're on the right track. All in all, while that hasn't detracted from the complexity of the process, I think the relationship, the working dynamic is definitely completely different compared to what we saw in 2018.
Sort of moving on to the next topic of Far West Gold Recoveries, it is as a result of that because of ongoing and recent conversations with the regulator that we do believe that we should be able to stick to our timelines, that we should be able to get going on construction anytime soon, both dam safety is involved as well as the licensing part. Yeah, we're not applying for a license. We're applying for an amendment to the license. But dam safety really is the catalyst to give us the go-ahead to start construction.
We do believe, based on the latest conversation that we've had with them, that we've ticked all of their boxes, literally, boxes, that get amongst other things, plus submit very substantial evidence and material on the construction, the design, the safety parameters, etc., and that we should get the go-ahead there anytime soon, well, anything unexpected. In terms of the longer-term looking ahead, so obviously, we don't want to have another situation, like the one that we had in 2023 where we were delayed between 6-8 months in the commissioning of sites, and then delayed basically from when we really need that site, not delayed from when we initially targeted to have the sites online. So it's obviously important that we take a look into that we learn from the experiences of the past.
Something that is a bit of a concern, and it's the first time that we've really had this to the extent that we did, was the social dynamic. Now, you would say, "But you just said that, you have these wonderful relations with communities, and you have, and you, and that is a basis for your consultation." And that is indeed the fact. I don't know what the situation would have been but for the fact that we had these relations because the stark reality for many of these communities is that they've been let down to the point where they don't really have anything. They don't have services. They don't have jobs. They have very poor healthcare. Their schools are a shambles. Their infrastructure and logistics are a shambles. They're no trains.
So for those lucky enough to have a job, you'll see a third of your income getting eaten by taxi fares and so forth and so forth. So when they do see any sort of development, when they do see any kind of, you know, opportunity for economic involvement, then, everybody wants to be involved. And it's, I don't know if it's sad, or what it is that one's supposed to experience when this happens, but if you have social unrest and people are saying, "We will not let you do anything unless you give us a job," so writing in order to get a job, that's desperate. That is desperation. And of course, you combine that with criminal opportunism, sometimes with very strategic relationships.
Suddenly, so-called community representatives and councillors for that matter, from time to time, they step into the fray, and they just make it very hard for you to go ahead, especially when there are representatives involved. I want to make it very clear that I'm not talking about the construction of a pipeline. This has got nothing to do with a licensing list. There's not even a suggestion of what I'm about to say when it comes to the licensing process. That I believe, the standards of governance that we're witnessing are beyond reproach. At this local level, and at this community so-called representation, there's always sort of an indication that maybe there's a way that we could solve this problem. This problem can go away, and you've just got to bat through that innings.
Ultimately, I think the realization sets in that there's not going to be anything funny here. This thing's going to go its course. There won't be any departures from corporate governance. So we need to anticipate those going forward. We need to engage early on. That means that, you you'll the makeup of your senior management is now also different. This is not sort of a side issue that you know, somebody can go and deal with from time to time. You really have the community engagement by prominent dynamic members of staff that have gravitas to deal with these situations and to convey our message into these communities. We will never, for as long as we can, stop investing in our corporate social programs. And we'll always invest towards sustainability.
We will always invest away from creating a culture of dependence, of creating more dependence, and always towards becoming more and more independent and self-sustainable. But it's a it's a program that's become sophisticated, complex, and we need to keep a tab on that. So lots to do. We are very pleased that we are positioned the way that we are in terms of volume throughput capacity that's been restored, in terms of where our cost profile is likely to go now, not having to rely as much as we did in the past on these machines. We are excited about the impacts that our solar plant is potentially going to have on our production going forward. We have a vision that we're going to be driving with a very specific future date about, two years into the future, three years into the future.
We're going to be bringing some of the more senior members of management and experienced members of management to drive that process at the same time, as I said earlier, creating some opportunity for upcoming talent. But we want to make sure that we deliver into the next round of major capital projects. We want to make sure that we build this RTSF and have it up and running when it's due. We want to increase the plant size of Far West Gold Recoveries with Driefontein 2. We want to double the size there, link up that entire infrastructure, commission our solar as and when at Ergo. There's a cluster of dams that need to come online in roughly three years from now. That's going to be up and running. At the same time, we need to increase the size of the Brakpan tailings dam.
We'll get that commissioned. So, lots to do. And with the platform that we've established now, albeit a little bit behind time in the bigger scheme of things, it's really not going to make that much of a difference over five or 10 or 15 years. But with that behind us and with this as a very, very solid platform, it's go time to make sure that we get those things put in place and that we set ourselves up for the next phase for this business and that we do not leave any value behind, if it is preventable. I think that is the presentation. Yes, that's everything. So, there'll be an opportunity to ask questions, and that will be both myself, Riaan, and Jaco who'd be happy to take your questions. Thank you for dialing in, and thank you for listening.
Riaan, are you guys able to log back on? I just see you. I've been talking. I was a little bit worried now that I was talking to myself.
No, no, no. We're all good. I see there are currently no questions that have been posted.
Okay. Well, then that must be the the quality of the presentation, Riaan. Well done to you and the team.
Thank you.
Any final comments from either you or from from Jaco?
Sorry, Niël. There there is there is one. If you ever ever look there, that has just come through. Let's see. Oh, yes. So I I I did say in the letter that we'll elaborate on that, by the end of financial 2024. All I want to say at this stage is just that we we are looking.
If there is something to report, then it will be around about the end of financial 2024, end of July. If there's anything before that, then obviously, we will. But we do want to see if we could take this methodology, this intellectual capital that's been established over time, if we can apply it a little bit wider than what we currently have. That seems to be it. There's another one.
Okay.
There's another one. There's Danair. "Please share more details about lodging and appeal proceedings by community forum."
Okay. So basically, Danair, what that involved was when a license was issued in 2022 to start, that would enable us to start mining a particular site. There were a number of mostly commercial demands, by what we believe was inspired maybe not by the community but by an influencer over that community. So an appeal was lodged, which would suspend the license until after the appeal has been heard. The Minister of Water Affairs has the authority to lift the suspension if you could submit compelling reasons. And we've submitted that request, and the minister did indeed then lift the suspension. So that maybe I could just comment on that. So, you know, water usage license is not there.
You don't just show up and say, "I want a license," and they hand it over at the table. You know, it's not like taking out a dog license. But once they've issued it, they've gone through such an extensive process of checking and double-checking and that they have confidence in the integrity of that license. So when an appeal is lodged and unless there are compelling reasons for that license to remain suspended, they would lift the suspension. And this is what we saw here. So very pleased about that. And then in terms of the community concerns that prevented construction of the pipeline, so there are two sets of concerns. On the one hand, there are the genuine concerns of community members who are pleading for a job. And then there are other concerns which aren't really concerns.
They're really just threats that are addressed like concerns. On the one hand, the latter you get from so-called representatives. And the former, you get from community members. And what you would have seen, what was done in terms of this pipeline construction is there was a little forum established. In fact, we've got several of these. With the solar farm, I think there were about 250 community members who in some way or another participated in the construction, ongoing maintenance, and also in terms of the cables that were erected, about 250 community members. And obviously, you want to now also with going forward. You know, somebody's got to look after the solar farm, so there's ongoing opportunity in that regard.
But here, the former concern of, "Please just is there an opportunity for us to earn some sort of an income?" there was an initiative established involving earth moving, because this pipeline had to be buried during certain sections, where it of area where it was better to have it as underground. So that was accommodated. We didn't accommodate any of the other concerns, though. The other sort of extensive concerns weren't accommodated. And then that's what added time to the whole process. Yes. So Nick, your question, it looks like you're going into debt soon. Well, hopefully not.
But obviously, we do envisage taking out some cover, in the event that we need to draw down to maintain to hit the targets, Nick, that I think you understand better than most. And we want to see if we can hit those targets. That's it features prominently in our conversations. So this is how we feel about dividends during periods where there's debt. If we make a loss, we won't borrow money to pay a dividend.
But if we make a profit, if we're generating good cash flows and if we make a profit because of the quality of these projects and because of the short time horizon before we start seeing upside and benefit from that, if we do take about a project-associated debt, then that won't get in the way of a dividend if we are at the same time also generating healthy profits. And if we're cash positive, we would have been cash positive but for the fact that we have project strategic capital expenditure. So we do want to maintain this runway. So 17 years is a long time. And, you know, with every year, it becomes more and more important that you want to maintain that. We'd love to get to 20 years.
But as I say, if we make operating losses, we won't borrow money to pay a dividend. We've got to make profits to pay a dividend. So Yuan Lindgren, you're asking, "Can you give an estimate of cost savings?" That's all we can do at this stage, an estimate. What we'd rather do is there are going to be a series of webinars over the next few months. The first one is on the 7th of March, and then we'll be discussing the changeover of the five sites that closed or the three clusters that closed and then the new sites that came on board and how that's repositioned us and just give you a little bit more detail and color on that.
There'll be a second and third webinar if the first one is a success where we really want to go into some detail discussing the effects of the solar plant, and how that's positioning us now with respect to our cost profile but also how it's setting us up for the future. So it's a solar plant. And then we also want to do a deep dive with the RTSF or with Far West Gold, phase two. It's a lot of capital that we're going to be spending there, investing there. And the TRS paints the entire picture. So we really also want to get into some detail there. So, look out roundabout, let's call it June, July, for the first and then the second one a few months later.
Then we'll be in the position to say to you exactly how much. I don't really want to give estimates because, you know, at the moment, for six hours a day, if you factor out the capital that we've invested, it's really just the R&M costs associated with a solar plant. And that 14 MW is what the plant needs. So for six hours, the plant's running off the sun. It's got to have an impact, and a fairly significant one. Once the BESS is up and running, you know, then there's a very real chance that we pass peak tariffs because we'd be able to charge using both solar and off-peak and then discharge during peak. So it's going to be a complex cost dynamic.
Rather than give you estimates, we'll rather give you the actual numbers once we've run a few months on full capacity. Jaco, are you comfortable with that answer, or do you want to add anything to it?
Good answer at this point in time. Thank you.
Thanks. Salma Khan is asking if a transcript of the session's provided. Not a transcript, but I think it is recorded, so you'll be able to listen to it. And then the presentation is on our website. So Brandon is asking, "What do you mean by operational and corporate complexities delaying your plants to diversify to Sibanye?" So Brandon, what it basically means is that chrome and ownership of chrome in that area is extremely complex.
I think there are three different companies that own different percentages of the same ore body. And, you know, so your mine and ore body, it's got EGEs in it, and it's got chrome in it. And then different companies own different parts of the upside. And exactly how they divide that up, I don't quite know. So it's very difficult if you're building a project that spans over several kilometers, and there are dumps from different sites that originate from different Sibanye subsidiaries where there are different associations and relationships both in terms of minorities and also with regards to other companies, it's very, very difficult to say, "Well, this is how this cookie's going to be divided up." That's the first instance.
Then the second instance, which is closely related, if you're dealing with three or four different sets of minorities and other interest groups, what does your corporate structure look like? What does your corporate structure look like? It is, it's not an imagined complexity. It's really something that we're trying hard to sort of decipher and land on a solution. But, you know, you've got several people around the table. And, you know, not everybody is willing to wait and to take the benefit of a long-term relationship. Sometimes premium upfront also sort of pops up in the conversation. And we're not premium upfront people, not when it comes to waste treatment.
So, I can tell you that both us and Sibanye are working hard and in good faith towards finding a solution for this, and it's going to get done. There's no doubt. It's going to get done. It's just when, because this is also a very busy time. And, you know, you've got to understand also where projects feature in terms of priorities and so forth. But it's a good project. And it will work provided that we can sort all of those out and provided we don't distort the market. Yes. Yuan, the other two, I'm not going to be able to give you comments on how savings on costs have been factored in at this stage. Solar has been very little that I can tell you, and trucks also. So we're hoping to sort of see how that pans out.
And then that will feature more prominently. The only real dynamics that we've considered up until now really is the higher tons and the effect that that has on diluting the fixed overhead and the unit costs. Nick is asking that CapEx spend target has reduced by nearly 20% in less than six months. Is this an indicator of how the really large CapEx targets you've set will go? I hope not, Nick. I really hope not. I'm hoping that, and I know that we can spend more time, and if I say more time, sort of at the right level of management dedicating more of their time towards these things, I'm hoping that that won't be the case both internally, but then also externally. Remember, there's been a massive logistics issue at our harbors and our ports.
A very, very large component part of the material, the equipment that we source in, has to come through harbors. So our management and our engineers have had their hands full to get stuff through harbor. So yes, I'm hoping that there's not an indicator. Look, some of the work that's going to be happening going forward also, when you talk about construction, you're not waiting for something to come through a harbor in order to move on construction. You move. It's something that you do physically. You're just going to maintain the rate. The supplier of our liner, which is a very, very major item for the construction of the RTSF that's a local supplier.
Not quite sure what the position is with regards to the resins and other components, but I do know that supplier is local. But I think a big chunk of the lag in capital spent up until now, considering that the biggest part of our capital spent up until now has been on the solar, a big part of that lag is because of clearing stuff through Durban and East London and Maputo and Walvis Bay. And heaven only knows where if there's a harbour any week getting something through it and then on a truck and then to Jo'burg. Yeah. Nick, your second question also, it's at this stage, we're expecting that there should be a reduction, but we'll know when we know.
You know, it's very hard to make an absolute prediction on what the absolute reduction in costs are going to be. We can estimate it, but, you know, to take a guess, I'm just going to have to explain it afterwards why we got it wrong. Riaan, you're going to have to help me on Yuan's question, the next one. To clarify, does it mean your cost estimate does not consider any positive effects from the solar plant? I don't think we factored in much in terms of the solar plant. I think it's really based on volume throughput and the fact that it's that we back to sort of high-volume sites, if I'm not mistaken.
That's right, Yuan. And as we're commissioning now various parts of the solar, it's very difficult to factor the saving into account.
But I do recognise Yuan's comment, and we've discussed it and you elaborated on that, is that at some point, when everything is set up and running, we need to provide that detail to the market. That is really important. We're investing significant capital. We believe it's a very good project, but we haven't distilled all that detail, which is important. And we will at the right time do that. So we definitely take Yuan's comment seriously. And as you've said, we've set that up, and we will provide that detail in due course.
Yes. Yeah. So Yuan, I want to echo that we, I mean, we, it's not as if we haven't done the work with that we that we're not sensitive to the legitimate expectations of our investors.
We just want to make sure that when we do give you the numbers, that they are the numbers. As I said earlier, you know, I'm not quite sure the extent to which, for example, how effective the avoidance of peaks going to be, what the real impact of that's going to be, the extent to which we'll be able to start wheeling back into the grid because there's a third party involved here as well, the extent to which that is facilitated. What we do know, though, is the solar plant's working. When we started that plant, that is running at design capacity, maybe even a little bit better, Jaco, when that first line or that first bank came on board, we were hoping for 6 MW, and I think it was sort of registering just under 7 MW.
We are now pulling 14 MW off that system, which is way beyond what it's capable of delivering. But that is how much we can feed into the project as we speed. So we know it's working. We have confidence in the team that's constructed it, the technology that they're using to monitor its operation. It's good technology. It goes into very, very intricate detail to give them proper analysis. So we're very keen to give you these numbers, but we do want to make sure that we give you the actual numbers. And it will be interesting to do that also in terms of the cash flow statement. Obviously, you know, you've got your balance sheet where the sunk capital plays a role.
It'll be interesting to see just how much less do we spend on a month-to-month basis now that now that the sun is providing most of our power or half of our power. Sorry, I skipped over one. Are there any regulatory changes that potentially have an impact on the operations? Not that I'm aware of. I know that there was talk a while back, with regards to provision for rehabilitation, but I think that's been I think that's been deferred. So there's nothing that we're factoring at this stage, Salma. We're planning to the regulations as they currently are. Yeah. Brandon, we're all looking at other opportunities where we can leverage existing infrastructure, and then also, looking further than that into sites that are beyond our existing infrastructure. Not massive, but we're sort of poking around a bit. Yes.
Yuan, I'm really going to try and sort of just, you know, when in terms of the numbers that we offer, really give you sort of numbers where I don't run the risk of having to explain afterwards why we got it wrong. So we've planned the project. The project has a very interesting and robust NPV. If you look at the way that the NPV is calculated, though, then there's one portion that is attributed to the subsidiary that's generating the power. And then another portion of the NPV that's attributed to the company actually using the power based on its savings. So these are calculations based on accepted theory.
You know, to release those numbers will mean that it's a few months from now. We will explain to you why the methodologies that are used for valuation and why the actual numbers, why they differ. Please, if you'll indulge us and just be a little bit more patient with us so that we can give you the actual performance numbers. What we'll do, and this is the undertaking that I give, is we'll take one month. We'll take, let's say, the first month that this thing is fully up and running. We can do it sort of in two. We could do one before basis up and running to the full potential and then one after basis up and running to the full potential because I know this is important for you to do your calculation.
We'll say, for argument's sake, and I'm sort of now creating an implied expectation, but let's say July. We'll take July of 2024 and compare the actual amount spent on electricity with July 2023. And that'll be an apples-for-apples calculation. But no balance sheet movements, no provisions, no deferred anything. Just, this is how much. This is the size of the check in July of 2023. This is the size of the check in July 2024. And this is the number of units that we actually consume. And this is the number of units that we consume back in because there are always these little bit of interruptions as well. So I do ask you if you could be a little bit patient with us and ask for your indulgence. Yes. Yeah. So the answer to your second question is yes.
We are scheduling a solar plant webinar without a doubt. Yeah. That's one of the things.
And Yuan, I just say that sorry, Niël, the one number we mentioned in our integrated report that gives a very high-level estimate is ZAR 9,000 per tonne saving over the current life of mine, approximately. But I mean, we need to build out on that. And as you indicated, we will do that.
And hopefully, when we do this presentation, we'll be explaining why it's ZAR 10,000 a tonne and not ZAR 6,000 a tonne. Hopefully. Hopefully. But that is always the, yeah, the challenge. That's right. Yes. But yeah, we'll have an extensive webinar on that, or a detailed webinar on that, Yuan. So thank you for indulging us. All right.
That we seem to have reached the end of the questions. Thank you very much for your patience. Thank you for dialing in. Thank you for your support. Hopefully, next time we come together, we're in a position to give you an account of how we have delivered on the expectations that we create for the forthcoming period. So thank you very much.