I'm ready. Hi, everyone. Thank you for coming. I'd like to introduce Niël Pretorius, CEO of DRDGOLD.
Hi. Thank you, Natasha. Good afternoon. Thank you very much for the opportunity to present, and thank you for attending. I'm going to give you a brief update, both in terms of our more recent performance, and then also talk a little bit about what we're going to be doing over the next few months to build out the business. DRDGOLD is a South African-based gold producer. We produce gold exclusively by reclaiming and reprocessing mine tailings. The company is listed on both the Johannesburg Stock Exchange as well as the New York Stock Exchange. It has, or it had as on 9th September, a market capitalization of $2.4 billion.
I think it's come back a little bit since then, like most other gold equities over the last few days, which is not surprising. We do track the industry. The company has two operations, both of which are situated in South Africa, and both of those have fairly long lives, 21 and 20 years respectively. Our mothership, the first of our operations, is called Ergo. A more recently acquired asset is Far West Gold Recoveries. That's an asset that we acquired from Sibanye-Stillwater, and Sibanye-Stillwater holds 50.1% of the issued shares in DRDGOLD. A very brief summary of what we do. This is what reclaiming and retreating mine tailings or historic residue deposits, what it looks like. You'll see that the material is dislodged using a high-pressure water jet. From there, it's pumped through a network of pipelines to a very large production works or a plant.
A very large percentage of our power, roughly 50%, is from solar. Most of the processed water, about 95% of our processed water is recycled gray water or industrial water. At the plant, the slurry is then mixed through a normal CIL process or treated through a normal CIL process, a Carbon-in-Leach. The gold is extracted and then the tailings don't go back to where it was reclaimed. It actually gets deposited onto a large central tailings storage facility, and that is key in our operations. We refer to that tailings facility, the storage facility, as the exhaust, and the exhaust determines the rate at which you can process and also for how long you can process.
The net effect of our business is the rehabilitation or the restoration of land, and we sometimes say that rolling back the environmental legacy of mining and restoring ecosystems is how we make a profit, which distinguishes DRDGOLD from many other companies in primary mining or operations in primary mining. Here is a snapshot of production for the 12 months ending June 2026. You see that the company produced just over 155,000 ounces of gold or just under 4.9 tons of gold, and that was from a throughput of 25.1 million tons of slurry that was processed during the course of the year. Yield is roughly 193 parts per billion. Cash operating cost, you can see, is pretty much in the middle, $1,780 per ounce. Our all-in sustaining costs, you can see is roughly, one would say, between 10% and 15% of cash operating costs.
Whilst cash operating costs is certainly not the lowest, I think in the industry, our sustaining CapEx is by far the lowest, and that's the sustained business CapEx. All-in sustaining margin for the year off the back of steady production and a very significantly higher gold price was 53% up, just over 14% year-on-year. Production was steady year-on-year. Snapshot for our financial performance over that same period. Revenues of just over $660 million. It's the highest revenue over a year ever. I've been the CEO of the company since 2008. We've never seen these numbers, and as I say, that's off steady performance. It's testimony to where the gold price has taken us, and we're very fortunate that we actually produced the gold to be able to generate these revenues and take advantage of that gold price.
Operating profit was up almost 100% to $382 million. Cash and cash equivalents increased. That's notwithstanding the fact that we spent the better part of $180 million in capital reinvestment, was up 128%. Undrawn security. It's a security or a facility that we put in place a few years back to fund our capital reinvestment, that remains undrawn. And we've declared our highest dividends also in the last, well, since we restarted paying dividends 19 years ago, it's been our highest dividend. It was 60% of earnings, 35% of free cash. So it was a healthy dividend, and as I say, during a time of very significant capital expenditure. I said $181 million. It was closer to $209 million for the year, up 68%. And we'll talk a little bit about that capital reinvestment program and what it's all about.
These graphs show you the financial trends, and this is what steady performance and steady costs look like when the gold price goes up. You can see all of those graphs are very favorably trending. In terms of operating margin, in terms of free cash flow, all-in sustaining margin per ounce, and also headline earnings. As I said earlier, a big chunk of those earnings were redistributed or divvied out as a final dividend. The narrative at the bottom of the slide there says that as an unhedged producer, DRDGOLD retains full exposure to gold price upside, and that is deliberate. We're not fixed income. We're a gold producer. We believe that investors invest in the company because they want to have exposure to the gold price.
What we say is, for the astute investor, there's potential to generate a return on either side of the cycle, depending on where you believe it's going to go to. We remain very focused on costs. Our costs are well managed, well within industry inflation. At these margins, therefore, every additional ounce that we produce goes directly to the bottom line. With all of these cash flows, you see that we generated just on $80 million in net free cash. You need to have a clear capital allocation strategy. Obviously, sustaining CapEx is your first priority. Sustaining CapEx is the oxygen of any operation. You don't spend your sustaining CapEx, you're going to run out of breath. It's like doing scuba diving and not filling your tank. You're going to die. So sustaining CapEx is a priority.
Growth CapEx has become a big thing for us, and we call it growth CapEx, but it is really organic growth CapEx. It is making sure that our entire resource, which is just over 6 million ounces, is optimized, that we take full advantage of that, and that we do not leave value on the table over time. Gold price has been behaving differently since roughly 2018.
It seems to have rebased at higher levels on the downside, and that is really enabled us to spend the money and to invest in capital infrastructure to take advantage of our entire resource in dumps that maybe 10 years ago we were not considering as part of our life of mine plan. Those have now very much become part of the life of mine plan. The advantage being that we already have very large capital infrastructure, so those ounces do not have to pay for new infrastructure.
They just have to pay for the added capacity that is required in order to bring them into the equation. Optionality remains preserved. So there you could see what the cash flow numbers look like, and also the fact that we still have as a fallback, the roughly ZAR 2 billion, $120 million in undrawn facilities that we have not touched and that we have not had to touch. So the company remains debt-free. What remains, that goes to shareholders. So there is not a fixed dividend policy, but the dividend policy is the money that we make and that we do not allocate to any one of those other three allocations, capital allocations, those we distribute. So what does it look like then if you have this free cash, if you have this resource and you want to optimize it?
You apply it towards the business and you grow the capacity of the business in order to both grow output, to grow added throughput, and also extend the life of your operation so that you can mine your entire resource. We call this Vision 2028. It was conceptualized probably in the years following 2020, but we really put firm numbers down after we had constructed an important catalyst in enacting Vision 2028, and that was to build a very large solar plant and a large battery energy storage system. A 60 MW solar plant and 185 MWh battery energy storage system. That was necessary to ensure that Ergo, in particular, had the benefit of a reset cost profile going forward.
We needed to make sure that an operation that was going to be processing this much material at such low grades, that it had the benefit of own power and that it took control of some of the very steep increases in power costs that we have been experiencing in South Africa since 2008. So having done that, we focused on the two operations and what this project would entail. At Ergo, because it already had the volume capacity, it meant creating additional tailings storage facility. The exhaust had to be made larger. We had to add 430 million tons of new tailings storage capacity in order for us to mine the rest of its resource. At Far West Gold Recoveries, it meant that we actually had to increase the size of the reduction works of the plant.
We had to double the capacity of that plant to 1.2 million tons per month. Building a new regional tailings storage facility, probably one of the largest in the world, that is fully lined and that is built to GISTM standards. We call it the RTSF or Regional Tailings Storage Facility, very original. A series of pipelines that connected it all, including the resources that we needed to mine in order to get to that 1.2 million tons. If you put all of this on one slide, what it looked like, these are the five main projects. The first project, Daggafontein at Ergo, that contributes towards Ergo's quest to add 430 million tons of tailings storage facility. This particular facility, the Daggafontein TSF, adds 120 million of those 430 million tons.
It takes huge amount of pressure off the existing tailings facility, the Brakpan facility, which has been around since the 1980s and which is now rapidly maturing and reaching the end of its life. The last project here also is the Withok TSF. The Withok TSF is a new facility on an old footprint. This one still needs to be, or is in the process of being licensed. All the applications have been made. Those applications need to be approved before construction can commence, and that will then add the other 310 million tons of tailings storage capacity to Ergo. Those are the two that deliver into Ergo's part of Vision 2028.
The three in the middle, the DP2, that is the Driefontein number 2 plant expansion, the pipeline project, and the RTSF, those are the ones aimed at adding volume throughput capacity to Far West Gold Recoveries, doubling basically its capacity and also adding 20 years to its life of mine. Those are underway. They have been underway since 2025, and they are now slowly but surely starting to come to fruition. At Ergo, the Driefontein facility is in fact operational as we speak. We started depositing at a rate of 25,000 tons a day at Driefontein since the 6th of July 2026. That is the target date there.
Which means that the split between the existing or the old tailings facility in Driefontein is now 750,000 tons per month on Driefontein, 900,000 tons on Ergo, so 1.65 million tons per month, which is Ergo's run rate, and it will remain its run rate until the Withok facility is commissioned. Then that run rate is increased by 150,000 tons per month. The Withok project, that is the one project where we are not going to actually achieve commissioning within the initial or the original Vision 2028 timeline. We anticipate that this facility will only be ready by the end of 2029. We will have the full benefit of the Withok facility from 2030 onwards, provided that all of those items that I list there, the approvals and the construction and the commissioning, that those are all finalized by the end of 2029.
If it is not finalized by 2029, then for at least another year beyond that, Ergo can maintain its throughput rate of 1.65 million tons per month. If it is not done by the end of 2030, then Ergo will have to start cutting back on its throughput rate. There is a fairly wide window during which this could be achieved before there is going to be a significant cutback in Ergo's tons. We will keep the market fully appraised of those developments.
At Far West Gold Recoveries, this one is going along quite nicely. The DP2, that is the plant itself. That plant is now double the size that it was before construction commenced. Its smelt house, it has got its own smelt house, beautiful, very modern, very secure smelt house that was commissioned on July 14. It also had a very successful smelt on that day. I was present.
We did a 17-kilo gold bar with a purity of just over 80%. It works really well. The plant itself is also been completed, all the work is in literally the final days of completion. What we will be doing at this plant now, pending the commissioning of everything else that forms part of this project, is the new section of the plant will be commissioned, whilst the old section will be serviced. It will get a major service over the next few months, so that as and when we start up in financial 2028 or work towards or ramp up towards financial 2028 to get to the 1.2 million tons that both those circuits are pretty much, well, one brand new and the other one refurbished and properly serviced. Pipeline project, the pipelines are 95% complete.
There was one license that was delayed, which we finally obtained in July 2026. Construction of the pump station that forms part of this project is date of license plus nine m onths. We are busy with that pump station now. We are hoping to have that completed by April of next year, which means from April onwards, this company will be in a position to at least start sourcing up to 1.2 million tons per month from its various or ramp up towards 1.6 million tons from its various reclamation sites. The final and main requirement for it to achieve that throughput rate would be the commissioning or the early commissioning of the RTSF. In order to do that, it needs to be approximately 70% complete in terms of construction. We hope to be there by the end of October.
Then there is a 60-day approvals period where the Dam Safety Office, which is the main regulator, they get to do their final inspection and see whether the dam was built to that point, or to the point where it is in accordance with its design. They would then hopefully give us permission to start impounding. As I say, the dam does not have to be completed. It needs to be completed to a particular stage, and then we will be in a position to submit that application. We believe that technically the work has been done to that standard and that the system that is in place will facilitate that timeline. Another very important requirement, though, is that as and when we start impounding, as and when we start depositing material onto this dam, it needs to be dry.
It cannot rain, because if it rains, fines will wash into those filters and they could blind those filters. We're hoping for, we need a few dry months from the date on which commissioning starts in order to actually do that commissioning. There's a very significant El Niño being forecast for South Africa from November onwards, so I'm a farmer and a miner, so the farmer in me, for once, is not praying for too much rain. The miner in me is praying that the rain stays away for just a little bit so we can actually get this thing commissioned. We hope that we would. As I say, we do have a fair amount of headroom to get to the target date of July 2028 to have it commissioned. We'll have to keep at it and maintain current work rate.
This is a picture of what the dam looks like. Once it's there, once it's up and running, minus Withok, this company will have the ability to do 2.85 million tons of throughput per month, with annual output of between 185,000 and 195,000 ounces per year. That's what this project's all about. It's a 40% increase in throughput, 25% increase in output. It's organic growth in its purest form, and it's also consistent with our philosophy of optimizing our resource and not leaving any value behind. I explained what happens with Withok and the timelines around that, so this is just to give you some sort of an indication as to what the capital forecast is looking like for the next few years to get us to the end game. This one actually includes some additional work that we're doing.
We're also building an upflow reactor to further enhance recoveries. But there you could see the one right in the middle, that was this year's CapEx, the $206 million, and then it tapers down to about just over ZAR 60 million in 2029. From that point onwards, most of the big capital is something of the past. The window for us now with this very favorable gold price has been to actually spend the CapEx to get to that post-Vision 2028 target, 2.85 million tons as I just described. Then, beyond that point, growth CapEx falls away. If you want to do the numbers to see what net cash flows could look like at that time, keeping in mind that sustaining CapEx is, as I said earlier, about 10% of cash operating costs.
Gold price doesn't weaken if it stays sort of around about the ZAR 4,000s, with cash operating costs, all-in sustaining costs of below $2,000, the margins could be fairly significant. Beyond 2028, we obviously want to take full advantage of this infrastructure that we're building. 1.2 million tons a month is not the RTSF's full capacity. It can actually take 2.4 million tons a month, but we'll see whether they are in that region. Something else that one could maybe add over time. In the meantime, focus is to get this done and to get it done properly. You've been tracking our share price. You know that it's steeply geared to movements in the gold price. What is encouraging is from about 2024 onwards, after the successful commissioning of the solar farm, we could see that we started tracking the industry locally in South Africa again.
We were lagging them a bit at the time, but I think confidence is coming back because of the successful execution of that project, and hopefully also now as we start hitting the milestones on Vision 2028. I think that was the second last slide. There is an appendix as well with some other interesting material. That is just a picture of the RTSF to give you some sort of an idea as to its size. It is much larger than Central Park, and it is big enough to take all of the tailings in that entire region, all 800 million tons of it. It could definitely be a catalyst for some form of regional consolidation. That is it. Thank you very much. Thanks for the opportunity.