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DRDGOLD LIMITED - Update on commissioning of fine grind and flotation circuit

Release Date: 04/04/2014 13:00
Code(s): DRD     PDF:  
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Update on commissioning of fine grind and flotation circuit

DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE share code: DRD
ISIN: ZAE000058723
Issuer code: DUSM
NYSE trading symbol: DRD
("DRDGOLD" or the "Company")


UPDATE ON COMMISSIONING OF FINE GRIND AND FLOTATION CIRCUIT (“FFG”)

DRDGOLD shareholders are referred to previous announcements published by the Company
regarding the construction and commissioning of its new FFG. The FFG has been installed at the
Company’s Ergo operation and involves the introduction of a flotation circuit, a set of fine grind mills
and a cyanide leach and carbon in pulp (“CIP”) circuit, the new “High Grade Section”.

Whilst the FFG has achieved positive float and grinding results, the CIP section has as yet not
stabilised and appears to have also contributed to metallurgical instability encountered downstream in
the existing carbon in leach (“CIL”) circuit, “Low Grade Section”.

Incessant rains during February and March and surges, dips and interruptions in the power supply
during this period have negatively impacted both the High Grade and Low Grade Sections,
contributing to the metallurgical instability of both sections.

Summary of Process

For ease of reference, a very basic summary of the FFG process flow, and its interaction with the Low
Grade Section is provided.

Slurry is sourced from various reclamation sites into the Ergo plant. This slurry (the “Feed”) is pumped
through three banks of flotation cells to create a concentrate (the “Concentrate”) that contains gold
bearing pyrites. The Concentrate enters a set of fine grind mills to break down the pyrites and free up
gold which would otherwise have remained shielded from the metallurgical extraction process to
follow. (Gold trapped in these pyrites is the main target of the FFG and the reason for its
construction).

This fine pulp then enters a high grade leach circuit, where cyanide is added to dissolve the gold in
the pulp. From here the concentrate is pumped to the CIP section where activated carbon is added
and the dissolved gold is absorbed onto the carbon. The “loaded” carbon is processed through an
elution circuit, where the gold is stripped off the carbon into solution. This solution then flows through
a series of electro-winning cells where the gold is electroplated onto electrodes. Periodically the gold
is washed off the electrodes, calcined and smelted into dore bars.

The remaining 96% of the Feed leaves the flotation circuit and enters the Low Grade Section. It first
enters a series of three thickeners to increase its density before it is pumped into the main CIL tanks.
It is essential that the thickeners are in good working order and stable, because the high grade tail
can only enter the Low Grade Section once it has been “thickened”. Their purpose is to increase the
density of the Feed, failing which the carbon that is introduced later in the process will sink to the
bottom of the CIL tanks, and not remain in suspension.

A similar process as that described above then follows – cyanide and carbon are introduced to first
dissolve and then load the gold onto carbon before it enters the elution circuit.

Update on Commissioning

The FFG and CIP circuit came into full operation during mid-January 2014 following the
commissioning of a third thickener and, with the exception of late February to mid-March when
incessant rains interrupted reclamation activities and caused a number of electricity supply
interruptions, utilisation was generally good. Flotation efficiency was consistent with the target range
as was the performance of the fine grind mills. Sampling results show that the amount of gold
remaining in solids (the so-called “washed residue grade”) reduced to within target range suggesting
that gold that previously remained inert within the pyrites was now driven off and became soluble.

Loaded carbon values remained well below target range in both the higher grade CIP and the main
lower grade CIL circuit, though, indicating that the gold remained in solution and did not adsorb onto
carbon. This may to some extent be attributable to poor carbon efficiency caused by volatile density
levels in the Feed at various stages in the process as well as excessive rain and ongoing reliability
issues with the thickeners that manage the flow of Feed into the main CIL. Reagents used in the
flotation cells may also be a contributing factor, however, this needs to be determined.

At this point in time, both carbon circuits of the plant, the High Grade Section and the Low Grade
Section are unstable and are operating well below target range.

Remedial Measures

The challenges faced during the commissioning of the FFG are metallurgical as opposed to technical.
The mills continue to operate efficiently but gold continues to stay in solution resulting in low carbon
efficiency in both circuits.

In order to isolate the cause of the low carbon efficiency, the high level of dissolved losses and lower
than expected gold production, the Company has decided to temporarily suspend the High Grade
Section, stabilise the main CIL circuit and isolate and measure each dynamic that could impact on the
carbon efficiency of this circuit. This will allow the main CIL circuit, being the original circuit with which
DRDGOLD is highly familiar, to return to target levels whilst metallurgical challenges are resolved.
Ergo will further use this opportunity to address design risks and counteract the effects of irregular
power supply.
Stabilisation of the main CIL circuit could take up to a month and completion of the required test work,
a further three to four months.

The development and installation of a number of measures to counteract dips, surges and
interruptions in electricity supply is also required. The flotation circuit is automated and trips whenever
the electric current dips or surges. In order to prevent silting up of the float cells in future, drain valves
will also be installed during this period.

Diesel generators drive the rakes in the thickeners in the event of a power interruption but not the
thickener underflow-pumps. Accordingly, Ergo will install circulating pipe-lines and auxiliary power
supply to the underflow pumps so as to continue the circulation of material in the thickeners during
trip-outs and to prevent them from silting down.

Impact on Operations

As a result of the problems experienced in recent months, gold production has decreased by up to
14% together and operating unit costs have increased by up to 24% during the quarter ended 31
March 2014. Management’s concerted effort to decrease operational and capital expenditure and a
higher gold price, have prevented cash outflows and maintained the Company’s net cash position
during this period.

Roodepoort

4 April 2014

JSE sponsor and debt sponsor:

One Capital

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